Page 143 - Tourism The International Business

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8. Developing tourism

Learning objectives

At the end of this chapter the reader will be able to:
• Identify the relationship between the private and public sectors in the development of tourism.
• Identify the information that must be collected in order to prepare a tourism development plan.
• Develop statements from the collected data reflecting present and desired positions.
• Describe the important elements of an area-wide master plan.

• Understand how the principles of tourism planning act as guidelines in tourism development.
• Be able to define and correctly use the following terms: core attraction, market segmentation, geographic
segmentation, competing destination, loan guarantee, sole proprietor, corporation, attraction-service
linkage, capacity, touring, destination tourism, supporting attraction, demographic segmentation, attracting
power, environmental impact statement, zoning, partnership, clustering, natural/cultural resource
dependency, social-developmental climate.

The development process
The development team
In the development of a large-scale tourism project it is likely that both the private and the public sectors will be

involved. The involvement of the public sector is important for two reasons. First, because of the gap between the
amount of investment required and the revenue expected, it is unlikely that major projects can be funded initially
solely by the private sector. Second, because of the income-producing potential of tourism development, investment
by the public sector can act as a boost to the involvement of the private sector.
Typically, the public sector is involved in preparing the master plan, acquiring land, marketing the development
of the project to potentially interested parties, developing and maintaining infrastructure, and monitoring
development by the private sector. The private sector conducts feasibility analyses of specific projects and plans,
and constructs and operates those deemed financially feasible. The respective roles of the private and public sectors
and the time gap between investment requirements and revenue expectations are illustrated in Exhibit 49.

Steps in the development process
The development process begins with an analysis of four areas: the market potential, planning and engineering,

socioeconomic, and legal and business. From this basic data, areas that are ripe for development are selected.
Objectives, principles and standards are developed and area-wide master plans prepared. For each area under
development consideration, the environmental impact is assessed together with an estimate of the overall costs of
development. From this a preliminary assessment of economic feasibility can be made. If it is decided to proceed
with the project, a multi-year development plan is prepared in conjunction with more detailed financial and
economic analyses. Marketing and administrative plans are prepared to support the chosen projects. The overall
financial feasibility and economic impact can then be determined. This process is illustrated in Exhibit 50.

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