The disadvantages of Tourism

7 July 2016

Successfully operating a business in an ever changing world requires vision on the part of the entrepreneur; this means being able to predict future trends and prepare the company for forecasted changes in the economic system. In truth, commanding a country is no different than that of a business as it too should be able to adapt to global changes in the economy. Machiavelli, the esteemed Italian writer once said, “The one who adapts his policy to the times prospers, and likewise that the one whose policy clashes with the demands of the times does not.

” It is fact that the survival and success of anything, whether it is a species, company, business or country, in a constantly evolving world is contingent on the ability to adapt to universal changes. However, in that respect, The Bahamas has failed to adjust to change in economic conditions on a global scale due to its great reliance on an antiquated tourism model. Over five decades ago The Bahamas adopted a model of tourism proposed by Sir Stafford Sands, the former finance minister of The Bahamas, and has religiously subscribed to it with minimum modifications to date.

The disadvantages of Tourism Essay Example

As a result of its reliance on an outdated model, the Bahamas’ economy has become more and more unstable. Moreover, chatter in the global market has pointed to diversification as the solution to the nation’s problem. As this may be the case, many Bahamians are fearful of change because tourism has been The Bahamas’ bread and butter since time immemorial. But should the blame be placed on the Bahamian people’s dread, the vulnerability of the Tourism industry or the get-money-quick schemes of the Ministry of Tourism?

While the blame can be shared equally amongst the three, the problem lies with over-dependence on one industry that is susceptible to a variety of factors. According to the Barcelona Field Studies Centre (2014), a diversified economy displays health. Moreover, sole economic dependence on one industry can lead to social consequences if the industry fails (Barcelona Field Studies Centre, 2014). The Barcelona Field Studies Centre (2014) continued to assert that, “Overdependence on one or two industries is also often accompanied by underdevelopment within other

sectors of the economy such as education, health, and the manufacturing and agricultural industries. ” Although it may be true that tourism is still beneficial to The Bahamas, a closer examination of this industry will reveal that it is also crippling The Bahamas’ progression as an archipelago. In likeness of these views, The Bahamas should diversify its economy for it is unwise to solely depend on the Tourism industry, which is vulnerable to external forces and unreliable because of its dependency on foreign investment.

It is time that Bahamians take charge of the nation and explore alternative industries that promote self-sufficiency, as it will lessen the risk of exposure to the ill effects of a decline in tourism. According to the Central Intelligence Agency (2014), the Tourism industry, coupled with the construction of hotels, resorts, residences, and roads as well as manufacturing aimed at the continued development of tourism, accounts for an estimated 60% of gross domestic product (GDP) and in one way or another employs approximately 50% of the Bahamian labor force.

This depicts how heavily reliant The Bahamas is on tourism in terms of jobs and revenue, and also conveys the fact that tourism can essentially be seen as the only productive industry in The Bahamas. The money, jobs and prestige tourism generates has given Bahamians a false sense of security, but growth of the industry has slowed down considerably in spite of tourism’s significant contributions to the Bahamian economy.

Chiefly, The Sir Stafford Sands model, often referred to as a two sector economy, places the Bahamian economy in the high risk category because it relies on two sectors, tourism and banking, where tourism is the primary source of income (Agenor & Montiel, 1999). The problem lies with the vulnerability of the Tourism industry, which is susceptible to a variety of global external forces. The Bahamas, like many other Caribbean nations, has characteristics which classify it as a developing nation. J.

Kevin Higgins (1994) reveals one such characteristic is the economy’s ability to be either negatively or positively impacted by forces in the global market (as cited in Saunders, 2007). This trait is undeniably detrimental when combined with The Bahamas’ dependency on the Tourism industry because tourism is primarily concerned with attracting international guests interested in the “Bahamas experience”. Furthermore, whenever there is a catastrophe or unforeseen event in the global market, tourism is usually the first industry declining with the most

impact, because traveling abroad is considered a leisure activity and not a necessity. Hence, the less people travel, the greater the impact is on The Bahamas’ economy. On that same token, in accordance with Shigetomi et al. (2007), “Overall growth prospects in the short run rest heavily on the fortunes of the tourism sector, which depends on growth in the US, the source of more than 80 percent of the visitors. ” Considering the September 11th attacks on the United States of America, which caused a slowdown in the US economy, the Bahamian economy suffered a great deal as a result of the tourist-resource freeze (Shigetomi et al.

, 2007). The Bahamas lost an estimated $200 million in tourism revenue because of the attacks on September 11th coupled with the effects that stemmed from hurricanes (Strachan, 2002). In essence, if there is not an influx of tourists entering the country, no revenue would be made from the industry of tourism. This example alone shows just how unstable the Tourism industry is, and it illustrates that the Bahamas would face grave danger economically if it continues to rely heavily on tourism.

Another depiction of this would be the American recession of 2007, which single handedly crippled the tourism industry leaving in its wake over 1,000 jobless Bahamians and numerous hotels suffering from low occupancy rates (Nicolls, 2010). Additionally, a more recent external force that has negatively impacted tourism in The Bahamas is the United States’ warning against traveling to the Bahamas in the midst of a dengue fever pandemic as well as the increase in the crime rate.

As recently as 2012, hurricane Sandy disrupted the peak of the Tourism industry, cutting tourism activity by “some 45-50 percent” (McKenzie, 2012). The uncertainty of the weather, especially in The Bahamas in which hurricanes occur during the summer and fall months, plays a major role in whether or not the Tourism industry generates the necessary income required for that economic year. Fraser (2001) asserted that the impact of these external forces would lead to fewer stopover visitors, reduced hotel occupancy and power room revenues.

There is also the risk of 75% reduction in employment and deterioration of business profits and incomes in hotel and related sectors (Fraser, 2001). To boot, there would be a significant decline in government revenue, which will induce a need to spend more money in the promotion of tourism in order to counteract these negative effects (Fraser, 2001). Nevertheless, there will be arguments which will claim that when the country needed revenue, tourism was the only legal and legitimate source in which The Bahamas could rely on, but that argument will never negate the fact tourism is indeed vulnerable.

However, the “skittish-ness” of the Tourism industry is absolutely unacceptable in the 21st century Bahamian economy. The Bahamas cannot continue to foolishly allocate resources such as money, manpower and time to an industry that deeply relies on global interactions for survival and could collapse because of murmurs in the market. Therefore, Bahamians must dispense with the archaic notion that tourism is protected from externalities, and move to minimize the emphasis placed on the industry by actively diversifying the Bahamian economy.

Another economic issue that stems from tourism is the fact that most seasonal jobs are created in the industry, which offers little room for advancement. This can lead to a cycle in poverty, where skilled workers can be found in short supply compared to the number of unskilled workers. Even though over the years The Bahamas has benefited considerably from tourism, which has given way to large-scale real property investments and to a great extent provided most the country’s high-end salaried jobs, if the industry starts to decline, by direct proportion, the unemployment rate will increase (Fraser, 2001).

As tourism is the major employer in The Bahamas, indirectly and directly employing persons in the hotel sector and other divisions that are tourism-driven (such as construction, retail and restaurants), one can only imagine the number of persons who will be without jobs if the industry collapses. Moreover, a high percentage of the unemployed will more than likely consist of unskilled workers, and this would perpetuate a weak economic system if these unskilled workers cannot find jobs. Due to the fact that the Tourism industry is seasonal, one can assume that persons who work in tourism sectors do not have a stable income all year long.

As stated by the General Secretariat for Development Planning in Qatar (GSDP 2011: 10), “A more diversified economy is inherently more stable, more capable of creating jobs and opportunities for the next generation and less vulnerable to the boom and bust cycles of oil and natural gas prices. ” Zappino (2005) asserted that the majority of the developing countries in the early 1970s supported the idea of tourism as it was an immediate source of income and development. There was also the premise that tourism would provide jobs for unskilled workers, and also become a resource for possible investors who

would assist in developing their economies (Zappino, 2005). (Fraser, 2001) proclaimed that, “A general consensus among residents was the “economic” and “financial” gains hotels and tourism have brought to the nation. ” Bahamians would be persuaded into believing this wonderful fairytale that describes how the Tourism industry, as fairy god-mother, has employed a large number of disadvantaged Bahamians, but what is to be said of the seasonal workers or those who were laid off due to a slow period in the industry? According to Ms.

Arthurita Butler, General Manager of Comfort Suites, the hotel “waited until the last possible moment to [lay off workers], hoping for an upturn in business, which unfortunately has not occurred” (P. I. Layoffs, 2009). In the words of Todd (2013), “What is 60 seconds worth? For the Ministry of Tourism, the price is almost $200,000. ” In the 2013 Super Bowl commercial lineup, the advertisement that was created to lure tourists to the Bahamas’ sandy shores and clear blue waters included superstars Rick Fox, Shakara Ledard and David Copperfield.

The Minister of Tourism reported that the Government would “spend $15 million on its 2013 advertising,” he also went on to say that, “It will be one of the most expensive campaign efforts in the country’s history; The Bahamas is trying to attract around 400,000 additional airlift arrivals by the time the $3. 5 billion Baha Mar mega resort opens in December 2014” (Todd, 2013). In the article, Student Union ‘Not Satisfied’ After Meeting with Minister, it was stated that the College of The Bahamas had been asked to cut around $2.

5 million from its budget in 2013, while other ministries were expected to cut 10 percent from their 2013 budget and 25 percent in their 2014 budget (Brown, 2013). It is evident that the present Government believes that the Tourism industry will be the “saving grace” of the Bahamian economy, and is willing to invest millions of dollars in “tithes” to ensure that the god of tourism sheweth favor on the industry. While investing millions of dollars into tourism, the other ministries, such as education, are at risk of becoming underdeveloped as hypothesized by The Barcelona Field Studies Centre (2014).

In The Bahamas, agriculture has not made a significant contribution to the gross national product in decades, and it is apparent that the need for food security is at the forefront for government officials in the Agriculture industry. Yet, the Government has not made extreme efforts to promote the development of the Ministry of Agriculture & Fisheries as it has done for the Ministry of Tourism. The country’s policies are all reliant on tourism, and if an external negative force impacts the industry, all of the money, time and man power that was pumped into tourism would be a waste and the economy would have much to fall back on.

The Bahamas has already established itself as a tourist destination, but without a diversification policy, The Bahamas is placing too heavy reliance on one industry. The continued reliance already has The Bahamas faced with the realities of dependent independence, which, according to Cabinet Minister Darrell Rolle (2013), “is where you are politically independent, but not economically sustainable on your own as a people or as a nation.

” It is abundantly clear that change is needed as tourism can no longer sustain The Bahamas; consequently, Bahamians must begin exploring alternative industries. For example, the exporting of aragonite (sand) can generate billions of dollars for the Bahamian economy, provide job stimulus and satisfy the country’s need for diversification. Similarly, agriculture also encourages self-sufficiency and supports The Bahamas’ need for diversification.

If Bahamians begin production of essential foods like ground provisions and fruits, it will reduce reliance on imported American goods and foster more food security (BAIC Builds, 2010). This can’t be achieved if Bahamians continue to ignore change and labor under an outdated tourism model. Bahamians must strive for independence and self-sufficiency; for they are once again on the brink of a new era within the economy. The time has come for The Bahamas to break the mold of the stereotypical Caribbean nation that relies on one industry for survival, and diversify its economy!

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