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Chapter 13 The role of the public sector in Tourism:Introduction:
The private sector, largely typified by profit-driven motives and entrepreneurial activity operating in a free market economy, forms a
significant driver in tourism. Why is the public sector involved in tourism and how do different organisations in the public sector manage
tourism?
The development of tourism in specific countries is a function of the individual government’s predisposition towards this type of economic
activity. Most governments seeks to maximize the domestic population opportunities for mobility and travel to facilitate the efficient
movement of goods and people at a national level. To achieve the objective of encouraging tourism, policies must be formulated to guide
the organization, management and development of tourism. Which is where the public sector has an important role to play! The
government is a major influence in society and in tourism. Entrepreneurs like Thomas cook would not have been possible without a
stable, supportive government. Public sector plays significant role: facilitating, controlling, providing the context for tourism
development.
Defining the public sector:
Public sector is nebulous grouping of organisations which comprises a range of government and government-based organisations. Focus
lies on delivering the government policy, they have the power to make decisions on aspects of strategic importance. Designed to achieve
objectives for wider good. To do this they use taxation revenue to develop and implement policies, initiatives that benefit the community.
The public sector operates at a number of different geographical levels in tourism including:
Supra-national organizations:
Working in the international/regional arena and involving number of countries working in cooperation, organizations have greater
power than individual countries (for national interest)
They are likely to influence the tourism planning, policy UNITED NATIONS, EU, ASEAN, APEC.
International organizations:
Working on particular issues on an international policy (advisory capacity). UNWTO, UNESCO
National governments:
Working on a level of the state/country often operated by a democratically elected group that represents wider populace. National
governments usually oversee tourism development through a ministry. The level of government involvement differs per country.
Government-funded agencies:
Working within particular policy or geographic area. These bodies are charged to implement national/local government policy, but
with freedom to manage own affair. Many national tourism organisations NTO fall into this category.
Local authorities:
Working at a local level of a country. In democratic system elected by local community. Local councils often play important part
tourism development and promotion at local level. There are 3 charitable organizations that co-exist with tourism sector. Those that
work outside tourism sector but use it as basis for fund raising; those working within sector (national trust) which rely on sector for
donations and visitors to continue; those which exist above tourism which challenge current norms and thinks in relation to how
tourism operates.
Public sector interest in tourism stretches across all of these organizational, geographical dimensions. However tourism development
usually requires support and guidance from national government through policy.
The rationale for public sector involvement in tourism:
Tourism is too important for governments to leave to market forces alone (due to positive, negative impacts). National government
involvement in tourism varies between countries, regions depending political ideology. Where tourism is a very significant part of a
country’s economy or where tourism impacts are prominent, it is likely that government involvement will be high. Normally the
public sector does not have an involvement in tourism to directly profit from interaction with tourists. Although in some regions the
public sector is a major stakeholder in tourism.
The work of the public sector in fulfilling its primary responsibility to its tax paying citizens creates spin offs, from which tourists
benefit. Such as providing, maintaining infrastructure. The public sector also subsidizes and manages facilities and services for local
people -> museums, public spaces, events ( e.g. new year’s eve). It’s equally attractive to visitors (for developing tourism products,
economic benefits local communities). The traditional rationale for public sector activity in tourism is to generate economic benefits.
The dominant policy of economic growth though tourism is for many destinations around the world by a broader base of objectives
-> Community welfare, visitor satisfaction, environmental, cultural protection, economic benefits.
Government involvement in tourism crosses the spectrum of economic, environmental, social and political interest. The social,
relational characteristics of government, business, communication have a powerful influence on tourism planning, policy
development. Issues are identified, information is collected and exchanged, alternatives are discussed and actions are taken.
Tourism policy making is a highly politicized and fluid process with multiple layers of influencing and interest each seeking to get their
viewpoint adopted. Public sector interest in tourism:
, Economic factors -Improve balance of payments by hard currency
-To aid regional/local economic development
-To increase income levels country/region
-To increase state revenue from taxation of tourism
-To generate new employment activity
Political factors -To achieve political goals in relation to promoting country’s
political acceptability (Spain, Franco)
-To promote development process through tourism -> less
developed countries.
-Ensure development consistent with political ideology (Cuba,
Americans).
Social/cultural factors -To ensure wellbeing of induvial, legislating paid holiday time
(social tourism).
-To act as catalyst of social change. Facilitating closer
interaction between host cultures and guests.
-Promote cultural awareness, appreciation, development.
Environmental factors -Address market failure. Degradation of environment,
exploitation of labour.
-coordinate, undertake environmental enhancement works. To
manage effect tourism -> improving.
-To raise awareness, support for environmental initiatives.
The role of the public sector in tourism:
A number of public tourism roles can be identified. The government now plays eight roles in tourism as follows:
COORDINATION:
Government based tourism and private bodies can work together better through coordination, information sharing, based on
common strategy which founded on cooperation between agencies. Working together can be difficult depending on political loyalties.
PLANNING:
Planning including the application, enforcement of development control strategies as well as tourism development strategies, allows
the state to identify which areas, sectors are appropriate to develop for specified use, in consultation with stakeholders. Should also
scenario plan -> global issues -> pandemic?
LEGISLATION AND REGULATION:
Not directly aimed at tourism sector imping upon growth, development ranging immigration, visa regulation to employment policy.
This forms framework to which tourism activity must adhere. Has been argued for with respect to environmental, human rights
issues.
ENTREPENEURSHIP:
Governments and public sectors bodies often own and operate tourism ventures or may own or manage land resources. This type of
entrepreneurship is declining
STIMULATION:
1. The public sector stimulates tourism supply through financial incentives such as providing tax relief to overseas investors in tourist
development to encourage foreign investment and generate employment.
2. Sponsoring research to assist the development of the sector through knowledge and understanding of markets and product
innovation.
3. Stimulation of demand through marketing and promotion.
MARKETING AND PROMOTION:
One of the primary goals of the public sector in tourism is marketing, promotion aimed at increasing consumer interest in a
destination. Normally coordinated through an NTO, reflects national tourism policies. Public sector promotions have rarely control
over the products that are being marketed. Which are largely owned, managed, operated within the private sector.
PROVIDING SOCIAL TOURISM:
Social tourism: providing holiday opportunities to marginalized groups as those on low income, general population within a state-
supported framework. Occurs more in not-for-profit sector more common Europe now.
PROTECTOR OF THE PUBLIC INTEREST:
The government’s role is to serve as an intermediary between competing interest and ac as a balance between those seeking short-term
gain and those with long-term. PS responsibility is it to act in the collective ineptest to prevent such abuse and resolve conflict. (not the
case in non-democratic countries). Governments can sometimes act against community interest in cause of generating economic benefits
from tourism (e.g. Birma).
Tourism policy:
Term policy is used to denote the direction, objectives an organization wishes to pursue over a period of time.
Policy tend to focus on MACRO, while planning focusses more on MICRO level and implementation of policy.
Policy process is a function of three interrelated issues:
-> the intentions of political, other key factors, way in which decisions, non-decisions are made, implications of
these decisions.
, Policy forming is a continuous process. Policy process which is applicable to the way tourism issues are considered by government
bodies.
Tourism policy reflects the strategic direction that a government deems appropriate to follow. In a democratic context the process of
policy formulation is also open to industry stakeholders, communities, development agencies, those with an interest in tourism
development. It is more effective for countries to follow a tourism policy than a wider economic development strategy.
The public policy framework for tourism:
There are a number of agencies who have an influential impact upon tourism. Most significant of these UNWTO, a specialist agency of the
United Nations Development programme established to maximize the benefits of tourism while minimizing the negative impacts. The WTO
encourages government involvement in tourism in partnerships with stakeholders (including private sector, local authorities, non-
government organizations NGO). It promotes international cooperation’s, serves as a forum for tourism issues globally, provides more
practical assistance for its members -> tourism planning, market intelligence, statistical info, education, training.
Associated organisations also undertake activities which impact upon tourism, including transport industry bodies such as International air
transport association ITATA, international civil aviation organization ICAO, interest group such air transport action group ATAG.
These bodies have coordinating. Influencing role on governments and reginal level. The European Union (EU) is a good example of a
transnational body which provides a policy frame work for tourism. The EU’s role in tourism is one of simplifying, harmonizing, reducing
restrictions on trade, which is travel. The main thrust of the EU is directed towards improving the quality of tourism services, encouraging
development of inbound tourism from outside the EU as well as improving the business environment for tourism enterprises + ensuring
sustainable environment for tourism. Because of diversity of tourism products, experience with member states, EU leaves tourism policy to
member states.
The reason for the EU’s intervention in tourism:
Transnational character, operation of some tourism business calls, for European wide policy framework.
Concerns about environmental, social, cultural dimensions of tourism development. Necessity to safeguard natural, cultural
resources, sustainable, balanced tourism growth.
Development of regional policy, Mostly disadvantaged areas, Places where public sector financial support us required to kick-start,
sustain business + providing, improving infrastructure.
Improving quality of tourism products -> funding programmes, market info and training.
Retaining cultural identity and the promotion of the concept Europe.
National Tourism Organizations:
NTO is usually a state funded organization which is state-private sector funded and often located in a ministry of tourism. It normally has a
board of directors, a constitution enacted by law and a degree of independence from the political system. The funding is usually agreed
ministry by a purchasing or direct funding agreement. Most NTO work overseas from where marketing can be more effective organized,
worked with local media, travel trade to stimulate interest in visiting the country. Not all countries have government funded NTO’s.
States try to encourage the private sector to contribute more to the running of the NTO’s with some countries using tourist taxes as a
means of funding the NTO’s. Main roles of NTO:
-> developments (including research, tourism plans), information provision, pricing, controlling access to key tourist sites, marketing.
Marketing tourism and the NTO:
Marketing is usually the primary function of an NTO. (especially advertising, increasing through the
use of social media). The range of expenditure per country also varies significantly with the larger
destinations such as France and South-Africa. The marketing activity of an NTO includes a number of
tasks, from preparing a marketing plan and subsequent advertising campaigns to organizing
familiarization tours for the press or travel industry. Creating newsletters, attending trade and
consumer exhibitions, the process of identifying a destination’s key tourism resources is a key
component of marketing planning. Tourism assets can be a competitive advantage.
Mission statement
Other agencies involved in tourism in the public sector:
Below the NTO in most countries there is often a complex web of organizations which complement
the work of the NTO at the regional level. While their activities are often a scaled-down version of the
NTO’s work at regional level, They often implement national policy and pursue integrated activities
with the NTO providing guidance in a top-down approach. (Regional tourist organisations RTO’S),
Enterprise Companies (often have a tourism interest in this respect, with an agenda to boost the economy).
Increased tourism growth will result in greater challenges for the integration of tourism and town planning. These challenges will be
brought about by the need for the development of attractions, transport, support services and infrastructure to cater for increased visitor
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