Economic Impacts of Ecotourism - A Perceptional

Study

ISSN 2319-9725

Vishwanatha. S.
Research Scholar, DOS in Geography, University of Mysore.

Dr. Chandrashekara. B.
Associate professor, DOS in Geography, University of Mysore

Abstract: There are two related, but distinct, economic concepts in ecotourism: economic impact
and economic value. This issues paper focuses on economic impact, which refers to the change in
sales, income, jobs, or other parameter generated by ecotourism. A common ecotourism goal is the
generation of economic benefits, whether they are profits for companies, jobs for communities, or
revenues for government. Ecotourism plays a particularly important role because it can create jobs
in remote regions that historically have benefited less from economic development programs than
have more populous areas. Even a small number of jobs may be significant in communities where
populations are low and alternatives are few.
This economic impact can increase political and financial support for conservation. Protected areas
and nature conservation generally, provide many benefits to society, including preservation of
biodiversity, maintenance of watersheds, and so on. Unfortunately, many of these benefits are
intangible. However, the benefits associated with recreation and tourism in protected areas tends to
be tangible. For example, divers at a forest and trekking places spend money on lodging, food, and
other goods and services, thereby providing employment for local and non-local residents. These
positive economic impacts can lead to increased support for the protected areas with which they are
associated. This is one reason why ecotourism has been embraced as a means for enhancing
conservation of natural resources. Basically, Kodagu district has rich natural beauty and cultural
diversifications. Therefore, its tourism in ecotourism nature. This study based on two dimensions,
these are positive impact and negative impacts of ecotourism. Expert interview with government
officers, Non Government Organization (NGO) leaders, community leaders and chief or employer of
local authorities. The interview based on canvassed questionnaire to get the information on impacts
of ecotourism. Positive and negative economic impacts of ecotourism are found in this study as ratio
of more and less respectively.
Keywords: Economic impact, preservation of biodiversity, intangible, embraced
March, 2014 www.ijirs.com Vol 3 Issue 3

1. Introduction:

Ecotourism is considered as an economic alternative to be developed in Kodagu district. It is

used to respond to the economic and environmental decline in the primary production sectors
and to help stimulate the local economy. Therefore, the need for sustainable management and
development is necessary, and a comprehensive analysis of its possible impacts is considered
as one of the most important steps before the full development takes place. Some scholars
suggested that prospective ecotourism impacts are found out from different stakeholders’
viewpoints since ecotourism viability as a less destructive form of tourism to society and
environment are still questionable (Wheeller, 1991; Wheat, 1994). Tourism impact studies
need to address three tripartite theoretical domains (Hall, Roberts & Mitchell, 2005). These
domains are known as environmental, economic and socio-cultural. They are recognized
through different viewpoints of stakeholders, especially through the perceptions of the local
communities. Several studies in India and elsewhere have assessed the economic impacts of
ecotourism. Predictably, the level of benefits varies widely as a result of differences in the
quality of the attraction, access, and so on. In some cases, the number of jobs created will be
low, but in rural areas even a few jobs can make a big difference. Still, ecotourism benefits
should not be oversold, or there may be a backlash as reality fails to live up to expectations.

2. Statement Of The Problem:

Kodagu is famous for beautiful landscape and cultural diversity. The tourism of Kodagu
district has ecotourism nature by conducting various types of ecotourism activities in
different sites. Ecotourism’s economic impact has one of the consequences of ecotourism.
The two types of impacts have predicted in this view these are like positive and negative
impacts of ecotourism. Positive impacts of ecotourism are such as increasing job
opportunities, increasing money flow in local economy, social wellbeing etc. From negative
impacts of ecotourism like cost of living, high income distributed in out migration of local
people, more imbalance in using of renewable and nonrenewable resource.

International Journal of Innovative Research and Studies Page 16

March, 2014 www.ijirs.com Vol 3 Issue 3

3. Study Area:

Kodagu as it is officially known as one of the tiniest districts in the southern part of
Karnataka covering an area of 4102 Sqkm. Kodagu lies between 11° 56′ and 12° 50′ North
latitude and 72° 22′ and 76°11′ East longitude. The Thadiyandamol (1750 m) is the highest
peak and Siddapur (900 m) is the lowest elevation in kodagu. Kodagu consists of three taluks
(administrative units) like, Madikeri (Mercara) the district Head Quarters, Virajpet and
Somvarpet. The district borders Mysore district to its east, Dakshina Kannada district on the
west, Hassan district in the north and the state of Kerala to the south. The total population of
Kodagu district in 2011 is 554,762 persons

Figure 1: Location Map of Kodagu District

4. Objectives Of The Study:

The study has been carried out with the following objective

i. To examine economic impacts of ecotourism

5. Materials And Methodology:

Expert interview with government officers, Non Government Organization (NGO) leaders,
community leaders and chief or employer of local authorities based on canvassed
questionnaire to get the information on economic impacts of ecotourism in this study.

International Journal of Innovative Research and Studies Page 17

March, 2014 www.ijirs.com Vol 3 Issue 3

Interview conducted in various ecotourism places like bird watching centres, cultural heritage
spots, fishing camp/s, health promotion and spa centres, home stays, national park and
elephant camp, recreation centres, river rafting, trekking places and waterfalls.

5.1. Ecotourism’s Economic Impacts Assessment:

The impacts of ecotourism, or any economic activity, can be grouped into three categories:
direct, indirect, and induced. Direct impacts are those arising from the initial tourism
spending, such as money spent at a hotel or restaurant. The restaurant buys goods and
services (inputs) from other businesses, thereby generating indirect impacts. In addition, the
restaurant employees spend part of their wages to buy various goods and services, thereby
generating induced impacts. Of course, if the restaurant purchases the goods and services
from outside the region of interest, then the money provides no indirect impact to the region
it leaks away. Figure 2 illustrates some of these impacts and linkages.

Figure 2: Ecotourism’s Economic Impacts

Source: Kreg Lindberg, PhD Lecturer, Charles Sturt University 3 November 1996

By identifying the linkages, or conversely the linkages within the economy, the indirect and
induced impacts of tourism can be estimated. In addition, this information can be used to
identify what goods are needed but are not being produced in the region, how much demand
there is for such goods, and what the likely benefits of local production would be. This
enables policy makers to determine priorities for developing inputs for use by the tourism or
other industries.

International Journal of Innovative Research and Studies Page 18

March, 2014 www.ijirs.com Vol 3 Issue 3

5.2. Data Collection Method:

The primary data has collected through canvassing structured questionnaires in this study.
300 samples have collected from different ecotourism activity sites to understand both the
positive and negative impacts of ecotourism. The questionnaire has many aspects on positive
and negative impacts of ecotourism. The positive impacts are change in employment
opportunities (i.e. increase in job availability which draws on expertise of local people),
foreign revenue for the local and regional development, increase in money in the local
economy (i.e. increase in wealth in the local communities),increase in money for local
development, increase in economic benefits for the livelihood improvement of local
households, increase in and development of local small, medium and micro economy
enterprises, increased markets for local products and services, increased volunteers and funds
to support the conservation of natural resources and ecological environment and the
development of sustainable livelihood strategies in the areas. The negative impacts are
increase in the cost of living (i.e. increased prices of local products and imported necessities),
seasonality of income or employment causing unstable local economy, expensive place to
live, high incoming out-migration of local people, low productivity of renewable and
nonrenewable resources, poor profitability of tourism business, economic linkages to outside
business owners and too much tourism economic dominant activities

6. Results And Discussion:

According to Table-1, ecotourism was perceived by a majority of the expert respondents to

have ability to generate high positive impacts on almost all economic aspects of ecotourism
in Kodagu disrtict. They believed that the development of ecotourism in these sites would
bring considerable amount of economic returns to help stimulate the local economy and
support the process of local and regional development moderately. This could happen when
the net ecotourism revenue surpasses all related costs involved in the management and
operation of ecotourism businesses as well as exceed the costs of environmental
conservation. However, the amount of economic revenue or profitability which exceeds the
value of ecotourism products and services that the local communities and authorities are
going to make really relies on how well the ecotourism enterprises are established and
managed on the process and environment of development. Simply, some expert respondents
indicated that it is venturesome to know that the possible economic benefits aggressively go

International Journal of Innovative Research and Studies Page 19

March, 2014 www.ijirs.com Vol 3 Issue 3

beyond the economic costs of development by figuring out every cost value in precise
numbers (e.g. environmental cost).

Scaling Items
Projected Positive Economic Impacts of Ecotourism 1 2 3 4 5
Change in employment opportunities (i.e. increase in job availability which draws on 4 - 6 6 4
expertise of local people)
Foreign revenue for the local and regional development 2 4 7 5 2
Increase in money in the local economy (i.e. increase in wealth in the local 4 - 6 7 3
communities)
Increase in money for local development 3 6 5 3 3
Increase in economic benefits for the livelihood improvement of local households - 4 8 5 3
Increase in and development of local small, medium, and micro economy enterprises 3 3 6 8 -
Increased markets for local products and services 3 - 7 5 5
Increased volunteers and funds to support the conservation of natural resources and - 3 8 6 3
ecological environment and the development of sustainable livelihood strategies in the
areas
Total Score 19 20 53 45 23
Scaling Items
Projected Negative Economic Impacts of Ecotourism 1 2 3 4 5
Increase in the cost of living (i.e. increased prices of local products and imported 3 3 7 7 -
necessities)
Seasonality of income or employment causing unstable local economy 3 8 5 4 -
Expensive place to live 3 6 8 3 -
High income in out-migration of local people 3 6 7 4 -
Low productivity of renewable and nonrenewable resources and poor profitability of - 10 10 - -
tourism business
Economic linkages to outside business owners 3 5 7 5 -
Too tourism economic dominant activities 3 5 4 8 -
Total Score 18 43 48 31 -
Table 1: Perceptions of the interviewed expert respondents of possible economic impacts of
ecotourism development in Kodagu district.

Source: Compiled by the Author. 2014 (expert interviews)

Notes: The level of impacts varies from “1” which is equal to the “lowest quantity of
impact” to “5” which is equal to the “highest quantity of impact”. The total score represents
the total amount or level (strong or low) of ecotourism impacts on major aspects of
measurement (economic).

International Journal of Innovative Research and Studies Page 20

March, 2014 www.ijirs.com Vol 3 Issue 3

Increase in local economy and conservation budget through high positive economic impacts
of ecotourism can be obtained from different sources. These include: the entrance fees; sales
of tourism and other necessary products and services (i.e. accommodation, food, transport,
guiding and interpreting and handicraft services and services for tourist activities etc.);
donations by tourists for conservation and local development; allocation of government
budget for biodiversity conservation; allocation of revenues from environmental NGOs and
donor agencies; concession taxes on tourism-related businesses permit; and, training and
consultation services for other local-owned ecotourism sites (only when homestays and
recreation centers ecotourism becomes a model of development). Even though there are
prospective benefits from ecotourism development in trekking and waterfalls compared with
ecotourism process in river rafting places, there is one major problem that needs to be
addressed thoroughly. Some experts, especially those from national park and elephant camp
management projects, were concerned with the institutional arrangement and framework for
the use of tourism revenue for conservation and local development in the areas. They
explained that if the government is not willing to give incentive by not taking or take less
ecotourism revenue to consolidate the government budget or if the implementing agency’s
officials (in case it is not community-based) is going to continue misusing the revenue for
their own benefits, ecotourism development in national park and elephant camp would face
difficulties. But, if concerned governmental and non-governmental agencies, including
donors, are willing to set different appropriate institutional arrangement strategies to raise
funds to support ecotourism in study area within a principle of participatory approach, the
situation would be better off. A tourism expert interviewed related this issue to the
complexity or simplicity of ecotourism development which depends on state politics and the
politics of donors and civil society organizations working in the areas.

Most of the expert respondents confirmed that ecotourism would help to bring positive
benefits (direct, indirect, induced and multiplier or spillover) in many circumstances (even as
primary or additional advantage) to local people in Kodagu district. They explained that
although economic opportunities which local people will get might vary depending on
individual characteristics, location and the level of involvement, they will be increased and
dispersed if ecotourism is developed properly. Ecotourism was perceived to provide high
economic impacts on the increase of employment opportunities which draw to local expertise
/ skills, capacity and technology and on the increase of markets for local products and labor
services (see Table-1). Following tourist arrivals (mainly international market segments) and

International Journal of Innovative Research and Studies Page 21

March, 2014 www.ijirs.com Vol 3 Issue 3

sustainable operation, more small and medium scale enterprises in the areas would be
developed to accommodate the ecotourism industry, due to possible medium economic
impacts of ecotourism. This would open wider chances for small trade businesses in the
localities and sprinkle trade exchange between Kodagu district with other nearby district or
state around this. Most respondents projected that while receiving more income opportunities,
local shop owners would count up their earnings from the local production with tourism
earnings to improve their livelihoods.

The results of the analysis also show that ecotourism development in Kodagu district will not
only improve local development and community livelihoods, but it will also have high
positive impacts on conservation activities through community support and volunteerism.
Some expert respondents expected that from realizing ecotourism benefits and value of the
natural resources and biodiversity in study area, either via education or direct participation,
the locals would join conservation process. They explained that the locals’ contribution could
be seen through the increase of their voluntary works and support in conservation as well. An
environmental expert gave an example that a former ranger of forest has become a proactive
ranger and environmental activist in Nagarahole (Rajivgandhi) national park after having
been educated on environmental issues and received economic benefits from his participation
in conservation programs.

While economic returns would be generated to foster local economy and development and
conservation, ecotourism development in Kodagu district will also produce a range of
medium economic impacts and a high impact (increase in the cost of living) on local
people/communities. The results of the expert interviews supported that as a result of tourist
demands and increased services/products, the living expenses in the areas would be higher.
The prices of basic commodities and other goods necessary for the locals but are needed to
cater to tourists might be increased and thus causing Kodagu district to become expensive
places to live for the poor or vulnerable tribal people. They explained that when people
realize that they are the marginal group of development, they would intent to increase other
economic activities which lead to the exploitation of natural resources. However, when there
is less job opportunity, they would have to force to leave for other nearby district or cities to
seek available jobs. In this case, the out-migration of Kodagu district residents would
decrease the labor productivity of the area. Moreover, it would lead to social problems for
these coffee estate owners and the host regions. Most respondents pointed out that as
vulnerable tribal people have less capital to invest and are not empowered or welcome to join

International Journal of Innovative Research and Studies Page 22

March, 2014 www.ijirs.com Vol 3 Issue 3

the development, only a minority rich coffee estate owners or outsiders could be able to run
businesses in the district. This would leak the economic benefits to few rich and elites and
outsiders. Last but not least, some development experts stressed a concern over ecotourism
dynamics which could affect the whole economic system of the areas. They referred to a
possible increase of tourism economic dominant activities and conservation activities that
reduce the opportunity costs in using Kodagu district for other economic development
purposes.

7. Conclusion:

This study has two dimensions like positive and negative economic impacts of ecotourism.
Both positive and negative economic impacts have received from the respondents through
structured questionnaire. The result has shown that the amount of positive economic impacts
of ecotourism has more due to the increasing of job opportunities, increasing money flow in
local economy and social wellbeing. Though, some amount of negative impacts of
ecotourism have received from expert interviews because of cost of living, high income
distributed in out migration of local people, more imbalance in using of renewable and
nonrenewable resource. However, ecotourism in Kodagu district would not implemented in
sustainable manner. If concerned authorities have observed these characteristics to make
suitable policy and rules for reduction of negative impacts of ecotourism and more benefits to
locals and respective revenue department

International Journal of Innovative Research and Studies Page 23

March, 2014 www.ijirs.com Vol 3 Issue 3

References:

1. Driml, S,. and Common, M., (1996), Australian Journal of Environmental

Management.
2. Hall, D., Robert, L., and Mitchell, M., 2005 (ed.). New Directions in Rural Tourism.
UK: Ashgate Publishing Limited.
3. Kreg, L., and Jerry, E., (1994), An Analysis of Ecotourism's Economic Contribution to
Conservation and Development in Belize.
4. Roy, P., and Linden, C., (1995), Regional Economic Impact: Gibraltar Range and
Dorrigo National Parks.
5. Wearing, S., and Neil, J., (1999), Ecotourism: Impacts, Potentials and Possibilities,
Butteworth-Heinemann, Oxford.

International Journal of Innovative Research and Studies Page 24