Coastal Tourism in the Wider Caribbean Region: Impacts and Best Management Practices	Report Contents Report in Word Format
	CEP Technical Report No. 38 1997	All CEP Technical Reports

4. COSTS AND BENEFITS OF TOURISM USE OF COASTAL RESOURCES

Though the review thus far has concentrated on the detrimental impacts of tourism on coastal resources, it is quite obvious that there are significant benefits being reaped by countries that operate a tourist industry. In fact, tourism is often touted as being the main foreign exchange earner for many countries of the insular Caribbean.

The direct and indirect costs and benefits of tourism use of coastal resources are significant throughout the Wider Caribbean. While the detrimental impacts have been expounded at length, the full cost of that development has never been quantified. In contrast, the benefits of tourism to national economies have been quantified in terms of contribution to national income, employment, and so on. Both the positive uses and impacts (Figure 2), and the cost and benefits (Tables 5-7) are examined below.

Figure 2: Positive Impacts of Tourism

Source: Modified from Caribbean Conservation Association, 1991

Table 5: Benefits and Costs of Tourism

Benefits

Costs

Improved port facilities Improved road networks Better communications Increased revenues Improved recreation facilities Preservation of historic sites Increased cultural offerings Stimulation of crafts Improved social infrastructure Employment and business opportunities Capacity building for some sectors

Exhaustion of water resources Pollution of coastal areas Beach erosion Damage to corals and other coastal systems Loss of important land and marine habitats Overfishing Decreased aesthetic value Noise pollution Increased social conflicts Erosion of traditional values High land costs Loss of agricultural productivity Capital transfer to metropoles Increased consumption of foreign products Shifting investments in infrastructure from more populated areas Conversion to mono-sector economy largely dependent on external inputs.

 

4.1 Contribution of Tourism to Caribbean Economies

Though it is well recognised that tourism has played an increasingly vital role in the economies of Caribbean economies, the existing information on the economic impacts of tourism does not provide a comprehensive view of the full costs and benefits (CDB, 1996). This is due primarily to the lack of reliable data, and a system to adequately measure the benefits of tourism to a country’s economy. However, using aggregate measures and assumptions based on multiplier effects, estimates of economic impact are usually derived.

This issue of defining the tourism sector and measuring its full contribution to a country’s economy was the focus of a seminar held in Kingston, Jamaica on July 7-9, 1997. The seminar, reported to be the first of its kind in the Region, was attended by delegates from 23 countries of Latin America and the Caribbean, along with participants from regional tourism organisations, the World Tourism Organization, and the Inter-American Statistical Institute.

 

Foreign Exchange Earnings

Data published by the Caribbean Tourism Organization (CTO) for 32 countries of the region showed that visitor arrivals for 1995 amounted to 14.7 million stopover visitors and 9.7 million cruise ship passengers (CTO, 1996). This resulted in expenditure estimated at US$12.7 billion (Table 6), an increase of 8.3% over 1994 expenditures.

 

Table 6: Estimates of Visitor Expenditure* (US$millions)

Country	1994	1995
Anguilla Antigua and Barbuda Aruba Bahamas Barbados	51.0 394.0 450.7 1,332.6 597.6	48.7 328.5 521.2 1,346.2 679.5
Belize Bermuda Bonaire British Virgin Islands Cayman Islands	71.4 525.3 32.4 188.1 334.1	77.6 487.9 37.0 191.4 375.5
Cuba Curacao Dominica Dominican Republic Grenada	850.0 240.2 30.6 1,147.5 59.3	1,100.0 232.7 32.5 1,568.4 58.2
Guadeloupe Guyana Haiti Jamaica Martinique	389.3 47.0 27.0 973.0 378.9	458.3 46.5 56.0 1,068.5 414.8
Montserrat Puerto Rico St. Kitts and Nevis St. Lucia St. Maarten	18.5 1,728.3 76.9 224.1 419.8	15.5 1,826.1 65.1 267.8 348.7
St. Vincent and Grenadines Suriname Trinidad and Tobago Turks and Caicos Islands U.S. Virgin Islands	50.5 13.5 85.4 56.5 919.1	56.0 13.5 78.1 62.0 820.5
Total	11,712.9	12,682.5
* A number of the figures are provisional Source: CTO, 1996

Revenue from the tourism sector is vital to the economies of these Caribbean states, as not only does it help to pay for the region’s import bill, it also makes up for an increasing percentage of the balance of payment budget (Table 7). Data from 1985/86 indicates that tourism earnings paid for approximately 40% of the Caribbean’s total imports of approximately US$4 billion/year from the United States of America (CTRC, 1987). While there is no data for 1995/96, the increase in visitor arrivals and expenditure, and the shortfall in earnings from other sectors, suggest that the region’s dependence on tourism has increased.

Table 7: Contribution of Tourism Receipts (Visitor Expenditure) to the Balance of Payments in 1985 in Selected Countries

Country	Export of Goods & Services (US$ million)			Tourism Receipts as % of Total Exports
	Tourism Receipts	Other	Total
Antigua & Barbuda Bahamas Dominica Grenada Montserrat (1994) Anguilla Barbados St. Kitts & Nevis St. Lucia St. Vincent & the Gred. Belize British Virgin Is. Cayman Islands Guyana Jamaica Dominican Republic Haiti Trinidad & Tobago Turks & Caicos Is.	83.6 995.0 8.7 32.4 9.8 14.6 309.0 31.0 55.7 23.0   11.1 97.3 85.5 22.0 406.8   368.0 69.0 197.3 12.2	40.4 402.0 25.3 19.6 3.1 N/A 490.0 18.0 37.3 57.0   119.9 2.7 68.5 223.0 754.7   367.0 161.0 2,448.7 N/A	124.0 1,397.0 34.0 52.0 12.9 N/A 799.0 49.0 93.0 80.0   131.0 100.0 154.0 245.0 1,093.0   735.0 230.0 2,646.0 N/A	67.4 71.2 25.6 62.3 68.4 N/A 38.7 63.3 59.9 28.8   8.5 97.3 55.5 9.0 37.2   50.0 30.0 7.5 N/A

Source: CTRC, 1987

 

Employment

Employment statistics are inadequate, as it covers mainly the employment in the accommodation establishments. Even with this limitation, employment in accommodations for 1995 was estimated at 192,500 persons. Based on the assumption that indirect employment is three times employment in the accommodation sub-sector, jobs generated were estimated at 578,000 persons.

 

Projected Growth in Caribbean Tourism

The region has experienced steady growth in tourism during the past two decades, moving from earnings of US$3.5 billion in 1980 (CTRC, 1987) to US$12.7 billion in 1995 (CTO, 1996).

Estimates for 1996 by the World Travel & Tourism Council for Caribbean travel and tourism gross outputs are US$25.4 billion (25.5% of GDP), and employment of 2.37 million persons (22% of total employment). Projected growth for Caribbean tourism over the next decade is estimated at 34.6% (WTTC, 1996).

The data given above for tourism expenditure is obviously an underestimation of actual expenditures. Sub-sectors such as the restaurant and bar and recreation are not totally tourism oriented. Similarly, the contribution from sub-sectors such as the yachting/sailing sub-sector is difficult to calculate.

To further complicate the above problem, the full cost of tourism to the Caribbean is unknown, and extremely difficult to determine. This is due mainly to the fact that such costs include the consumption of imported goods and services by the sector, leakage in earnings (for the period 1980-1986, it was estimated that only 42% of each dollar earned was retained within the Caribbean as local value added (CTRC, 1987), infrastructure costs, pollution problems, and the deterioration of the natural resource base on which tourism and other sectors depend.

 

Implication of Coastal Resources Degradation to Caribbean Tourism

The links between a pristine environment and tourism have long been established. However, tourism continues to create severe stresses in the system on which it depends. The issues of overuse of resources, damage to natural resources and ecosystems, increased conversion of coastal zone space to more stressful uses, and increased social tensions, all create major imbalances wherein the development path and the development goals are incompatible.

It has been suggested (McElroy and Albuquerque, 1991; Aniyar, 1994; IRF, 1996a) that the present approaches to tourism development are not sustainable; that is, if tourism-dependent economies suffer environmental degradation, tourism could decline. Added to this is the tendency of the tourist to avoid destinations where social dislocations are perceived to be generally high.

The different sub-sectors within tourism obviously contribute to the deterioration of the resource base to different degrees; not only in terms of the level of impact, but also in the location where the impact takes place. Conversely, the impact on the tourism industry will affect the sub-sectors differently. Insofar as different countries depend on different sub-sectors (boating, water-sports, hotels, restaurants, attractions, etc.) to different degrees, the potential losses will affect them differently. What is obvious is that loss of natural resources or continuing deterioration of environmental quality will result in loss of jobs, reduction in private sector and government revenues, and worsening balance of payment problems.

Given the projections for increased tourism travel in the coming decade, it is imperative that steps be taken immediately to protect the natural resources on which tourism depends and without overlooking the cultural and architectural heritage. Maintaining the balance between resource use and good environmental quality require political commitment to undertake forceful policy intervention, improved planning and management systems, immediate remedial action, and a base of knowledge from which to operate.

 

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List of Tables and Figures, Foreword, Acknowledgements | Section 1. | Section 2. | Section 3. | Section 4. | Section 5. | Section 6. | Section 7. | List of Acronyms  | References  | Appendix 1. | Appendix 2. | Appendix 3.