The downtowns of large and small cities are particularly attractive for tourism-related initiatives because these areas often possess a large pro- portion of a community’s historical resources and lack the dull uniformity that characterizes suburban areas, particularly in the USA (Kunstler, 1993;
Fainstein and Stokes, 1995; Beauregard, 1998). It is not surprising, there- fore, that some of the most successful visitor destinations throughout the world are communities that possess a revitalized historic core. Among the reasons for the ascendancy of tourism development programmes and related entertainment attractions during the late 1980s and early 1990s, at least within the USA, was the economic downturn that characterized the property market and particularly the overcapacity of downtown office spaces following years of speculative construction in downtown areas (Fainstein and Stokes, 1995). Fainstein and Stokes argue that local govern- ments have been quite eager to sponsor the development of facilities such as sports arenas and convention centres by using public money, especially since such investments promise a constant revenue stream unlike spending on other public goods such as schools and roads. Because money for major tourism facilities in the USA, like museums and aquariums, often comes from state and not local governments, policy makers are keen to sponsor such programmes, especially as they do not appear to inflict a direct burden on local taxpayers. Furthermore, it is important to note that because many tourism-related facilities and events can be reproduced in numerous areas, community leaders are more likely to compete to attract a facility such as a major hotel or an aquarium instead of a manufacturing plant; just because a Sheraton or a Hilton was constructed in one community does not mean that they cannot be constructed in another. By the same token, even though a city may not be granted an international event like the Olympic Games or a World’s Expo one year it does not mean that a second bid will be unsuccessful (Fainstein and Stokes, 1995).
The worldwide perception of tourism as a growth sector stems from the fact that, unlike most consumer services (e.g. retailing), it can be considered an export or basic industry (Law, 1992), albeit an odd one, because the consumer must visit the place of production as opposed to the goods being transported to the market (Debbage and Daniels, 1998).
Localities can use tourism as an invisible export in the same way they may use the production of tangible manufactured or agricultural goods to attract necessary foreign exchange and fulfil their overriding economic goals of wealth creation, employment generation and enhancement of the host population’s living standards. Unlike other sectors, tourism usually
‘requires little, by value, in imports for every unit of foreign exchange which it generates [and] thus a greater proportion of the foreign exchange earnings of tourism can be used for investment in the development of manufacturing industries or in reducing the foreign earnings debt’
(Mathieson and Wall, 1982: 45). Mathieson and Wall also maintained
that policy makers favour the development of tourism instead of con- centrating on the export of agricultural or mining products, since commu- nities seldom have control over the prices for the latter commodities.
Furthermore, tourism is an attractive development option for many localities because it is characterized by a high-income elasticity, meaning that a substantial increase in the number of visitors and tourist dollars can result, despite a fairly moderate increase in the disposable income of tourists.
Beyond its promise of wealth creation, tourism is seen as a way to create a labour pool with a certain modicum of human capital. Even though, as discussed in more detail later, there is considerable debate as to the quality of the jobs created (the ‘good jobs’ versus ‘bad jobs’ argument), the heart of the matter is that tourism can provide a source of employment in situations where options are limited (Fainstein and Gladstone, 1999). The argument can also be made that barriers to entry in the tourist sector are low and the cost of job creation is considerably less (one eighth) of that in manufacturing (Urry, 1990). As Mathieson and Wall (1982) contend, the same investment in tourism as in the petroleum industry will normally create more jobs. Since many jobs in tourism require minimal skills, it is possible to absorb a large proportion of the required workforce from other sectors without the major investments in training programmes that are often required by other industries.
Most analysts agree that the promotion of tourism in a certain com- munity or region has an impact on local entrepreneurial activity, although the precise nature of this impact has not yet been fully explored (Timothy and Wall, 1997; Shaw and Williams, 1998; Timothy and White, 1999).
According to Mathieson and Wall (1982: 82), the extent to which the tourist sector can establish linkages with local entrepreneurs depends upon:
· The types of suppliers and producers with which the industry’s demands are linked.
· The capacity of local suppliers to meet these demands.
· The historical development of tourism in the destination area.
· The type of tourist development.
One of the most cited studies relating tourism to entrepreneurial activity is the now dated study by Lundgren (1973, cited in Mathieson and Wall, 1982) that proposed an evolutionary model of entrepreneurship related to the development of Caribbean hotels. Through his model, Lundgren suggested that the establishment of a hotel sector on an island economy leads to three consecutive stages of local entrepreneurial activity.
Although during the early stages the hotels may depend heavily on foreign suppliers for items like food, eventually these establishments will manage to
create a relationship with local entrepreneurs such as farmers (Telfer and Wall, 1996). In other words, Lundgren contends that tourism’s evolution in an area eventually stimulates the production of local agricultural commodities and use of other local resources. A handful of similar studies have sought to explore the relationship of tourism development to sectors such as the construction industry (e.g. Bond and Ladman, 1982, cited in Shaw and Williams, 1994). Overall, however, the topic of entrepreneurial activity in tourist environments remains a research lacuna that warrants further examination (Ioannides, 1995; Dahles, 1997).