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Ecotourism & Local Economic Development

David Epstein



The International Ecotourism Society (TIES) defined ecotourism in 1991 as "responsible travel to natural areas that conserves the environment and improves the well-being of local people." [1] Since the concept grew out of the conservation movement, initial emphasis was on protecting nature—even to the detriment of the local human population.

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Ecotourism initially referred to travel to unspoiled areas that were under formal legal protection. One author explains how in Africa “park management emphasized policing—‘fences and fines' which forcibly evicted and kept out local community members, who were often politically and ethnically marginalized rural poor.” [2] The TIES definition was the first official recognition of a newer model that evolved out of conflicts between early ecotourism ventures and local populations excluded both from traditional livelihoods based on natural resource access and from tourism profits. Later, the Word Tourism Organization (WTO) coordinated the drafting of a “Global Code of Ethics for Tourism” which was officially recognized by the UN General Assembly in December 2001. It acts as a non-binding guide to tourism stakeholders. Most important to this essay are the first two sections of Article 5:

1. Local populations should be associated with tourism activities and share equitably in the economic, social and cultural benefits they generate, and particularly in the creation of direct and indirect jobs resulting from them; 

2. Tourism policies should be applied in such a way as to help to raise the standard of living of the populations of the regions visited and meet their needs; the planning and architectural approach to and operation of tourism resorts and accommodation should aim to integrate them, to the extent possible, in the local economic and social fabric; where skills are equal, priority should be given to local manpower; [3]

This essay will provide a general review of tourism economics and then focus on implementing local economic development within ecotourism, which requires specific mechanisms to translate success in conservation into success for local communities.



Tourism & Economic Development

Economists and trade analysts classify tourism as an export because it earns foreign currency. However, unlike other exports, tourism requires consumers "visit the place of production as opposed to the goods being transported to the market”. [4] The World Trade Organization (WTO) only considers expenditures by foreign tourists in the country being visited. [5] The global total for 2003 was $525 billion, nearly as much as the $754 billion for fuel and $724 billion for auto parts. The World Travel & Tourism Council (WTTC) studies (and promotes) both travel and tourism. Below are some highlights of its aggregate forecast for 2005: [6]

Demand Side

2.8 trillion dollars will be spent by individuals on personal travel and tourism.

International travelers are expected to spend 818 billion dollars on goods and services within the economies being visited.

Supply Side

The direct Gross Domestic Product (GDP) for the industry will be 1.7 trillion dollars.

74 million people will be directly employed through travel and tourism.

Tourism attracts policymakers and community leaders who believe it is possible to steer tourism dollars into development. Researchers note that “the revenues associated with the sector can be used to improve a destination’s infrastructure and services (e.g. roads, airports, sewage systems and fire protection) and other facilities (e.g. greenways, playing fields, parks and theatres), all of which ultimately benefit the local population.” [7] Furthermore, a region looking to diversify its economy through new exports may identify tourism as an option with more local control over pricing than agriculture or manufacturing and also a lower cost of entry. [8]  

The economic impacts of tourism on host societies are usually measured through changes to the Gross Regional Product (GRP), multipliers, input-output analysis, and local-level impact studies. [9] As in other forms of economic development, there are several types of multipliers that can be studied. The box below gives more detail on measuring GRP and the employment multiplier.

Gross Regional Product (GRP) = C + I + G + E – M

Where: C = consumption; I=investment; G = local government spending; E = exports; and M = import purchases.

As can be seen from the above formula, if foreign contractors win the bids for new hotels or if tourists require luxury items unavailable in the host country, then these imports negatively impact the GRP. Thus, a community in need of diversifying its economic base may need to employ more than just tourism to do so.

Income multiplier (IM) = 1/(1-MPC)

The marginal propensity to consume (MPC) measures the fraction of new disposable income spent on consumption (and not saved).

For example, a family spends $1,000 on tourism in a society where the MPC is one half for everyone. The owners of the tourism businesses (hotels, restaurants, attractions) would spend $500 of this money. The next tier would spend $250, etc. The income multiplier (IM) equals 1/(1-½) = 2. This means that the original $1,000 in tourist spending resulted in $2,000 total local spending.


Adapted from: Ionides, “The Economics of Tourism in Host Communities”, p.42 in Tourism in Destination Communities , edited by S Singh and D J Timothy, 2003.



Mass Tourism Versus Ecotourism

The demands of most tourists and those of residents in host communities are often at odds. The average tourist has been described as preferring “habituated travel to experience the ‘expected’ ” [10] and not to experience the intricacies new places. As one author notes, most vacationers seek “to sample a lifestyle more lavish than their own, regardless of whether their level of consumption is sustainable” and only about 5% look for educational travel experiences. [11] Such visitors frequently demand non-locally produced goods, causing profits to leak outside the destination community. Mass tourism is often summarized by critics (and perhaps some tour promoters) as relying upon “the four S’s”: sun, sea, sand, and sex. [12] Environmental damage, prostitution, and other problems are common effects of mass tourism. This led some to view mass tourism as simple parasitism and argue for ecotourism as an alternative that protected the natural resources and cultural heritage of destination communities while providing economic benefits for all stakeholders. [13] While still a fraction of tourism revenue, consumer demand for ecotourism has been estimated as rising three to four times faster than for mass tourism. [14]

Many international lending organizations that originally advocated for developing countries to establish tourism projects have adopted the language of ecotourism and sustainable development, such as the World Bank. It is important to consider this phenomenon carefully, because ecotourism, by definition, nearly always involves travel to secluded and sensitive places. [15] Frequently cited initiatives include ACAP in Nepal, Uluru / Ayers Rock in Australia, and CAMPFIRE in Zimbabwe (described below).


Case Study: Ecotourism within Zimbabwe’s CAMPFIRE program

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Colonization by Europeans and displacement by the creation of national parks in the 1920s have left five million people in Zimbabwe with few sources of income. They live outside areas protected by environmental legislation, on communal land plagued by wildlife intrusion and poor agricultural conditions. Since profits from hunting licenses and tourism activities initially flowed only to the central government, members of these communities made no effort to curtail illegal poaching.


Solution #1: WINDFALL (Wildlife Industry New Development for All) 

Program Overview

In 1978, the government distributed wildlife meat to people living around the parks to demonstrate the benefit local resources could provide and the need for conservation strategies.  

Mechanisms for local economic development

None identified. 

Comment & Criticisms

This top-down project failed because it did not educate the indigenous population about environmental practices or connect desired behaviors to specific economic incentives.

Rural settlement in northern Zimbabwe.

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Solution #2: CAMPFIRE (Communal Areas Management Programme for Indigenous Resources)  

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Program Overview

In 1989, the CAMPFIRE program was developed to decentralize the responsibilities and benefits of nature conservation. While the program varies across the country, it generally involves the creation of democratically elected Rural District Councils (RDC).  

Mechanisms for local economic development

These RDCs receive revenues from hunting and tourism, a portion of which are shared with local communities to motivate improvements in environmental stewardship. Since income is directly tied to maintaining wildlife populations, locals have a vested interest in stopping poachers. These communities invest program profits in schools, clinics, and infrastructure. In 1994, CAMPFIRE received additional funding from The U.S. Agency for International Development (USAID) to diversify its program through ecotourism and other non-hunting based initiatives. Ecotourism related grants were issued to:

Ecotourism provides additional income for local communities through jobs as educators, guides, and artisans. Despite the official role of tourism in the CAMPFIRE program, it has been estimated that the sale of hunting licenses alone accounts for 90% of total revenue. However, visiting trophy hunters paying upward of $10,000 to legally pursue large game may be considered a type of tourism, bridging the two classifications in a way that troubles some environmentalists and animal rights advocates. 

Comments & Criticisms

It has been argued that colonial activities in Zimbabwe disrupted local cultural practices, which viewed nature as common property to be respected and conserved. Westerners settling the area viewed indigenous beliefs as backward and privatized the most productive land for profit-making. They criminalized subsistence hunting by locals and the grazing of livestock in protected areas. Critics of CAMPIRE allege that these same practices are at the core of the program. Residents living near game reserves cannot protect themselves from marauding elephants that damage homes, destroy crops, and even kill people—due to the program’s environmental regulations. RDC’s have been criticized for not devolving the full revenues to communities required by the program’s guidelines. Some interviews with people living near the nature parks believe that long-term tenure rights and education are more important than short-term monetary gains from CAMPFIRE.




This essay has provided an overview of the difficulties inherit to using ecotourism as a means of local economic development. Even a program such as CAMPFIRE, widely regarded as successful, appears to have difficulty in delivering tourism benefits to host communities at the scale intended. Still, the most recent program is more successful and partipatory than the previous one in Zimbabwe. This suggests that with time and effort, even better local economic development mechanisms could emerge.

Sources & Footnotes

Case Study

Please note that the most frequently cited website for CAMPFIRE is currently displaying information about trout fishing (12/2005)

"Shall We Gather 'round the Campfire?", Resources for the Future (RFF) 2005 by Carolyn Fischer, Thomas Sterner &  Edwin Muchapondwa

“Campfire: Zimbabwe’s Tradition of Caring”, Voices of Africa, United Nations-Non-Governmental Liason Sevice (UN-NGLS), by Stephen Kasere, Director, CAMPFIRE Association, Harare 

“Description and Activity Data Sheets: Zimbabwe 2001”, USAID Program

Final Report: October 1995 – September 2003 The Zimbabwe Natural Resource Management Project—PHASE II”, Development Associates, Inc.

“Focus on Sustainable Development Case Study: CAMPFIRE, Zimbabwe”,  2001, GlobalEyeNews

“Green Aid in India and Zimbabwe - Conserving Whose Community?”, Geoforum, 2001, Zoe Young and George Makoni with Sonja Boehmer-Christiansen


[1] TIES website,, and Martha Honey, Ecotourism and Sustainable Development, 1999

[2] Martha Honey, Ecotourism and Sustainable Development, 1999, p.11

[3] World Tourism Organization website,

[4] Quote from Economics of Tourism in Host Communities, 41 based on Debbage and Daniels, 1998

[5] “Travel includes goods and services acquired by personal travelers, for health, education or other purposes, and by business travelers. Unlike other services, travel is not a specific type of service, but an assortment of goods and services consumed by travelers. The most common goods and services covered are lodging, food and beverages, entertainment and transportation (within the economy visited), gifts and souvenirs.” (WTO Technical Notes

[6] WTTC World Report 2005,

[7] D. Ioannides, “The Economics of Tourism in Host Communities”, p.40 in Tourism in Destination Communities, edited by S Singh and D J Timothy, 2003.

[8] D. Ioannides, “The Economics of Tourism in Host Communities”, p.42 in Tourism in Destination Communities, edited by S Singh and D J Timothy, 2003.

[9] Ryan, 1991 in Ionides, “The Economics of Tourism in Host Communities”, p.42 in Tourism in Destination Communities, edited by S Singh and D J Timothy, 2003.

[10] S Singh, D J Timothy and R K Dowling, “Tourism and Destination Communities”, p.3 in Tourism in Destination Communities, edited by S Singh and D J Timothy, 2003.

[11] A.M. Johnston, “Exercising Indigenous Rights in Tourism”, ”, p.117 in Tourism in Destination Communities, edited by S Singh and D J Timothy, 2003.

[12] Some permutations include “shopping” and “sangria”

[13] S Singh, D J Timothy and R K Dowling, “Tourism and Destination Communities”, p.3 in Tourism in Destination Communities, edited by S Singh and D J Timothy, 2003.

[14] A.M. Johnston, “Exercising Indigenous Rights in Tourism”, ”, p.118 in Tourism in Destination Communities, edited by S Singh and D J Timothy, 2003.

[15] A.M. Johnston, “Exercising Indigenous Rights in Tourism”, ”, p.118 in Tourism in Destination Communities, edited by S Singh and D J Timothy, 2003.