7th Posting

When building expensive, world-class resort areas, the danger and pressure to make short-term profit often hides long-term ramifications and eventually puts countries in a bad economic state. Some of those ramifications can range from, retaining workers, and maintaining a clean and luxurious area, to making sure there is enough money to operate the resort and pay their bills and taxes. Also, making a profit from tourist income is an issue because most country’s goals are to create cash flow, and make more money than they spent building the resort. This can be a challenge especially for third world countries since it is costly to bring in materials and they are dependant on the tourist as a commodity. Nowadays, the average tourist needs to come from all over the world in order to keep the reservations coming in. For example, the money it takes to build the resort and the cash flow it takes to keep the place running like paying the workers, cleaners, and cooks, will affect their profit in the long run if tourists are only coming from one location. The development costs of a resort are also difficult to plan for when you depend on many other countries for building materials, supplies and more. This is why it is dangerous to build expensive resorts without first thinking and planning for the future.

            When building a sizeable resort there is many intangible issues that you have to take into account. Travel cost is an important factor in making a profit; it must be affordable for the tourist to reach the destination and have enough money left over to spend while they are there. “The direct income for an area is the amount of tourist expenditure that remains locally after taxes, profits, and wages are paid outside the area and after imports are purchased; these subtracted amounts are called leakage (http://www.unep.fr/scp/tourism/sustain/impacts/economic/negative.htm, Economic Impacts of Tourism)”. A portion of the money that is spent by the tourists actually goes to companies that are not located within that country, like “A study of tourism 'leakage' in Thailand estimated that 70% of all money spent by tourists ended up leaving Thailand (via foreign-owned tour operators, airlines, hotels, imported drinks and food, etc.). Estimates for other Third World countries range from 80% in the Caribbean to 40% in India (http://www.publicsector.org)”. So, even though people are spending money to go to a certain resort, all of that money does not calculate into a profit for the country. Developers have to do methodical research in order to make a business plan that considers all these complex details.

            The tourism industry is causing resorts to lose part of the local economy. The big businesses that assail the country’s income are taking an essential part of their economic income. “Economic recession and the impacts of changing tourism patterns can have a devastating effect on the local tourism sector (http://www.unep.fr/scp/tourism/sustain/impacts/economic/negative.htm, Economic Impacts of Tourism)”. One of the risks involved in these world class resorts is the fact that you have to make sure people are able to vacation there. In other words, if people, for some economic reason, cannot visit the resort anymore, there is a huge issue for the country that relies on that income. The resort also must make sure that they are able to meet their operating costs and build in a profit margin allowing for fluctuations in the market. If tourism stops in that resort area, the country is lacking economic stability and therefore will not be able to pay for all of these costs. 

            The local resort needs to appeal to a global population and economy because “Of each US $100 spent on a vacation tour by a tourist from a developed country, only around US $5 actually stays in a developing-country destination's economy. http://www.unep.fr/scp/tourism/sustain/impacts/economic/negative.htm, Economic Impacts of Tourism)”. For example, if you take a look at the historical development of the Aspen area as a world-class resort you can see how it has changed to keep up with the economic times. In the 1960’s Aspen was mainly a winter ski resort. Over the years, Aspen continued to expand the mountain terrain to include Aspen Highlands, Aspen Mountain, Snowmass and Buttermilk. Aspen has even grown to include such things as the X Games, music festivals of all kinds, and fall and summer times of year for tourism. It shows how the resort has had to evolve in order to keep people coming.

             Clearly the ramifications are more long term than short term when building and maintaining a resort area.  Also, there are clear and present risks involved in making a world-class resort, which makes the process and development more complicated. It is not worth building if you do not have a business plan for all the expenses and operations that have to maintain themselves as long as the resort is functioning.

Works Sited

"UNEP DTIE SCP Branch: Tourism." UNEP Division of Technology, Industry, and Economics. Web. 14 Nov. 2010. <http://www.unep.fr/scp/tourism/sustain/impacts/economic/negative.htm>.

"Agenda 21." While Travelling 5 - Questions for Your Travel Agent. Web. 14 Nov. 2010. <http://www.publicsector.org/local_agenda_21and_you/WhileTravelling/5Questions.html>.

"What We Do." Tourism Concern. Web. 14 Nov. 2010. <http://www.tourismconcern.org.uk/>.