The nature of government involvement
A country’s system of government will, of course, be reflected in the mode and extent of public intervention. At one end of the scale, centrally planned economies may choose to exercise virtually complete control, from policymaking and planning to the building and operating of tourist facilities, the organization of tourist movements and the promotion of tourism at home and abroad. Since the collapse of the Soviet Union, such central control is now limited to a very few countries and even some of those nations still ostensibly operating centrally planned economies – China, Cuba and Vietnam, for example – recognize and accept the importance of private enterprise, and the benefits of private investment, in their tourism planning. China, ostensibly a centrally controlled economy, happily cooperates with privately owned American hotel interests to establish chains of hotels in popular tourist destinations throughout the country and accepts the independent movement of tourists on itineraries tailor-made by Western operators. Even Saudi Arabia, which for cultural and political reasons has long restricted the movement of independent. Western tourists, is easing its constraints and allowing some freedom of movement for foreign tourists. Only North Korea and Turkmenistan still control tourism so rigidly that independent travel around either country is impossible. Most other nations have mixed economies, in which public and private sectors coexist and collaborate in the development of tourism within their borders; only the balance of public versus private involvement will vary. Thus, the United States, with its belief in a free enterprise system and a federal constitution, delegates much of the responsibility for overseas promotion of the nation either to individual states or even to private organizations created for the purpose. Central government intervention in the USA is limited to measures designed to protect the health and safety of its citizens (such as aircraft safety and air traffic control). It even disbanded its public tourism body, the US Travel and Tourism Administration, in 1996, allowing private enterprise to fund overseas marketing. The public body has been replaced by the privately sponsored Travel Industry Association of America (TIA), which markets the USA abroad under a number of brands, including the Visit USA Association, Discover USA and Discover America, in some cases maintaining an office abroad to serve the trade’s (but not the public’s) needs. Public ownership of transport is also generally declining, as rail and air services are denationalized, but, in some developed countries, there are still examples of widespread public ownership. The French government, to cite one example, owns 100 per cent of SNCF, the French rail network, 100 per cent of Aéroports de Paris, 44.6 per cent of Air France and has shares in SNECMA aero engines and aircraft manufacturer EADS. Public ownership of the railways undoubtedly made it easier to invest in the hugely expensive TGV network for which the country is now famous. The system of government is not the only factor dictating the extent of state intervention. If a country is highly dependent on tourism for its economic survival, its government is likely to become far more involved in the industry than if it is not so important. The government department allocated the responsibility for tourism can highlight the perspective and importance placed on tourism by governments. The relative importance attached by government to tourism in the UK can be judged by the amalgam of responsibilities assigned to the Department for Culture, Media and Sport. Not only does tourism not appear in the title of the department, the job title of the minister within the department, as of 2006, became Minister for Creative Industries and Tourism. This minister is now responsible for broadcasting, film, alcohol, entertainment licensing, the press, IT and science, in addition to tourism. Countries where tourism has only relatively recently become a significant factor in the economy and that sudden growth has become problematic, are likely to exercise stronger control over the development of tourism than are those where tourism is either in its early stages of development or has developed slowly over a long period of time. Mauritius, for example, recognized that the wave of visitors it experienced in the early 1980s could soon lead to the country being swamped by tourists, destroying the very attractions that had brought the visitors to the islands in the first place, unless it took steps to control such key activities as hotel construction. Tunisia, too, learned that lesson and introduced control over hotel and other construction related to tourism early in the development of mass tourism to that destination. Unfortunately, the potential for quick riches can exercise a greater influence than the long-term interests of the country and there are all too many examples of countries that have suffered from lack of sufficient control over building and development, leading eventually to a drop in visits as tourists turn to less exploited destinations. Overbuilding in Spain was held up as an example in the late 1960s and could have influenced subsequent development in other Mediterranean countries to which tourists turned en masse somewhat later. Nevertheless, the 1980s and 1990s witnessed overdevelopment in some key regions – first in Greece, then in the Portuguese Algarve and, later (despite initial efforts to control hotel-building), in Turkey. Corruption and nepotism – the significance of having influential ‘connections’ to overcome planning controls should never be underestimated –are very real enemies of sustainable tourism policies. All countries require reliable supporting infrastructure in order to encourage tourism in the first place, which will inevitably involve local and central government. Adequate public services, roads, railways, harbours and airports must all be in place before the private sector will be interested in investing in the equally necessary superstructure of hotels, restaurants, entertainment, attractions and other facilities that will bring in the tourists.
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Example
St Helena
St Helena is a British dependency in the Atlantic, 1200 miles west of Angola. One of only 13 remaining UK overseas territories, the island has a population of around 3900 and has suffered economic deprivation for many years, owing to its isolated setting and lack of an airport. Its sole regular link with the outside world is a government subsidized cargo passenger ship operating out of Cape Town. With better communication links, its prospects of developing tourism would be good — with its rocky, semi-desert coastline, but an attractive tropical interior and two national parks. Its most notable feature is Longwood House — Napoleon’s home during his final years of captivity. The planned construction of an airport has been under consideration for a number of years and, in 2004, the Department for International Development invited proposals for a public—private partnership (PPP) to improve transport links and develop tourism for the island. Initial proposals were rejected on the grounds of ‘unacceptable levels of financial and other risks and uncertainties’ and the government’s consultants eventually put forward plans entailing construction costs beyond what a PPP would accept as financially viable. More than four years later, there is still no firm decision regarding the awarding of a contract. The original plan was for the airport to be operational by 2010, but further delays followed in 2009 and no timescale can be currently envisaged for the development. Subsidies provided to the shipping company will cease once the airport is operational. The cost of developing and operating the airport will be substantial, given that the planned runway is big enough to accommodate long-range Boeing 737-800s and Airbus A320s, which will call for a runway some 2250 metres in length, in a small country with very little flat land. The resultant improvement in communication, however, would allow the expansion of all kinds of trade, including tourism, which should result in a reduction in the need for subsidies from the UK that fund the island’s budget. St Helena’s administration has welcomed the scheme, but it has not found universal acceptance among the islanders. Even the director of tourism has expressed concern that the development of an airport and upmarket resort could easily lead to the island being swamped by tourists, causing it to lose much of its present charm. Developing nations may have a further incentive for involving government. Private developers may be reluctant to invest in speculative tourist ventures, preferring to concentrate their resources in countries where there is already proven demand. In this case, it may fall to the government to either aid private developers (in the form of grants or loans for hotel construction) or even to build and operate the hotels and other tourist amenities that will first attract tourists. Where the private sector can be persuaded to invest, it is often companies from the generating countries that first show interest, with the result that most of the profits are repatriated rather than benefiting the local economy. There is also the danger that private speculators will be more concerned with achieving a quick return on their investment rather than the slow but secure long-term development that will benefit the country most. The state is called on to play a coordinating role in planning the provision of tourist amenities and attractions. Supply should match demand as closely as possible and the state can ensure that facilities are available when and where required and they are of the right standard. As tourism grows in an economy, so its organization, if uncontrolled, can result in the domination of the market by a handful of large companies. Even in a capitalist system, the state has the duty to restrict the power of monopolies to protect consumers from malpractice, such as unfair constraints on trade or exorbitant prices. Apart from these economic reasons for governments becoming involved in tourism, there are also social and political reasons. In many countries, especially in developing nations, national airlines are state-owned and operated. While, of course, the income accruing from the operation of the airline is important to the state, there is also the political prestige of operating an airline, even if the national flag-carrier is not economically viable. In other situations, certain airline routes may be unprofitable, but, if they provide a vital economic lifeline to the communities they serve, they will need to be subsidized by the government. Governments also have a duty to safeguard a nation’s heritage. Buildings of historical or architectural interest (particularly UNESCO World Heritage sites and others of international importance, such as Angkor Wat and its surrounding temples, a complex of magnificent twelfth-century ruins of Khmer culture in Cambodia) have to be protected and maintained, as must landscapes of exceptional merit. The state will therefore fund national heritage agencies (such as English Heritage, Historic Scotland and CADW in Wales) and establish national parks to protect sensitive sites and buildings.
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Example
Protection versus development — the case of Pumphouse Point, Tasmania
Balancing the demands of developers seeking to provide tourist resources and encouraging the reuse of redundant buildings can often conflict with the desire to protect the natural environment. After a decade of deliberation, the local council has finally given approval to develop at Pumphouse Point, Tasmania. The development of a former hydro-electric substation, located on the shore of Lake Clair, which sits within the Cradle Mountain Lake St Clair National Park, part of the Tasmanian Wilderness Area World Heritage site, has required extensive planning and consultation. Negotiations related to developing this site commenced in 1995, with controversial plans for a AUS$15 million wilderness lodge being given government approval. Alterations to the resort plans, as well as delays, however, led to the government reclaiming the site in 1999. In 2002, Doherty Hotels announced plans to develop a AUS$5 million resort, but withdrew in 2003. The latest plans aim to provide visitors with accommodation as well as an interpretation centre, designed to enhance visitors’ appreciation and understanding of the physical and cultural locality. Permission was granted in April 2008, although gaining the detailed construction approvals was expected to delay the start of construction until the end of the year. The decision to give approval for this development was controversial, with the National Parks Authority disappointed by the decision: ‘We had hoped that the council would have regard for the Wilderness World Heritage Management Plan which basically says developments shouldn’t occur in parks, as a matter of course they should generally be outside.’ The long search for a third London airport was extended by several years while the government weighed up the relative merits of the economic benefits of a particular site and the environmental damage that the development would cause. Still more recently, a longrunning conflict emerged in the UK between conservation and economic development over the construction of a fifth terminal at London’s Heathrow Airport. Economics won out, but not before the construction had been delayed for many years, undermining the strategic importance of the airport vis-à-vis its competitors on the Continent. Needless to say, the power of political lobbying may be the critical factor in any decision made by the public authorities. We can sum up by saying that a national government’s role in tourism can be manifested in the following ways:
· in the planning and facilitating of tourism, including the provision of financial and other aid
· in the supervision and control of the component sectors of the tourism industry
· in direct ownership and operation of components of the industry
· in the promotion of the nation and its tourist products to home and overseas markets
· in supporting key tourism interests in a time of financial crisis.
This clarification of the range of activities that need to be undertaken by national governments is helpful when they are considering their own responsibilities in relation to the provision and management of tourism.
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