Doppelmayr A (2009) Economic impacts of tourism in Livingstone, Zambia

EconomicimpactsoftourismintheLivingstonearea,Zambia

Candidatenumber:104

Course:UTV3090

Spring2009

No.ofwords:7700

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TableofContents

1. INTRODUCTION 2 1.1 BACKGROUND 2 1.2 OBJECTIVES AND RESEARCH QUESTIONS 2

2. THEORY AND DEFINITIONS 3 2.1 TOURISM 3 2.1.1 TOURISM EXPENDITURE AND ACCOUNTING 3 2.2 ECONOMIC IMPACT 3 2.2.1 MEASURING ECONOMIC IMPACTS 4 2.2.2 LEAKAGES 5 2.2.3 LINKAGES 6

3. METHODOLOGY 6 3.1 DATE AND LOCATION 6 3.2 DATA COLLECTION 6 3.3 INTERVIEWS 7 3.4 DATA SELECTION, QUALITY, REPLICATION AND ANALYSIS 8 3.5 INFORMANTS 8 3.6 ETHICAL CONSIDERATIONS 10

4. TOURISM IN LIVINGSTONE 10 4.1 SITES AND ATTRACTIONS 10 4.2 VISITORS 12

5. ECONOMIC IMPACTS 13 5.1 DIRECT INCOME OF THE VICTORIA FALLS AND MOSIOATUNYA NATIONAL PARK 14 5.2 INDIRECT INCOME 14

6. ECONOMIC BENEFITS AND DISADVANTAGES 15 6.1 INCREASED GOVERNMENT EARNINGS 15 6.1.1 ECONOMIC BENEFITS 15 6.1.2 ECONOMIC DISADVANTAGES 16 6.2 JOB CREATION 16 6.2.1 ECONOMIC BENEFITS 16 6.2.2 ECONOMIC DISADVANTAGES 17 6.3 IMPROVED INFRASTRUCTURE 18 6.3.1 ECONOMIC BENEFITS 18 6.3.2 ECONOMIC DISADVANTAGES 18 6.4 MACROECONOMIC STABILITY AND OTHER EFFECTS 19 6.4.1 ECONOMIC BENEFITS 19 6.4.2 ECONOMIC DISADVANTAGES 19

7. CONCLUSION 20

REFERENCES 20

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1.Introduction

1.1Background

In2008,thetourismsectoremployedover225millionpeopleandgenerated9,6%ofglobal

GDP, arguably being the second largest industry in the world (World Travel & Tourism

Council,2009,p.3).Whiletourismhistoricallyhasnotbeenviewedasaneffectivesectorfor

developmentinpoorcountries,thisattitudechangedinthemid1980’s(Vanhove,2005,p.

170‐171).Thetourismsectorisnowregardedasoneofthemajorcontributorstothegross

domesticproduct (GDP)ofmanyof thepoorest countriesof theworld (Lickorish, Jenkins,

1997,p.208).

The Least Developed Countries (LDCs) received only 1,4% of the international

tourismarrivalsin2006(Honeck,2008,tableA3).However,areportbytheWorldTourism

Organization [UNWTO] states that many of the LDCs have a comparative advantage in

tourism over developed countries, and that their growth in recent years has been faster

(UNWTO, n.d., p. 1‐2). The LDCs comparative advantages over developed countries are

according to the UNWTO (n.d., p. 1‐2) mainly due to lower price levels, climate, distinct

culture,andunspoilednatureand/orexoticsitesofinterest.

The UNWTO (n.d., p. 2) describes tourism as being “labour intensive, which is

particularlyimportantintacklingpoverty”.Somefurthercharacteristicsoftourismarethat

jobsusuallyrequirelittletraining,servicesofferedareconsumedatthepointofproduction,

tourismopensupadvantagesformicro‐entrepreneursandthattourisminfrastructurealso

canbenefitpoorcommunities.

1.2Objectivesandresearchquestions

ThispaperwillpresentastudyoftourismintheLivingstoneareaofZambia,withafocuson

the Mosi‐oa‐Tunya National Park and the Victoria Falls. The objective is to give a broad

overviewoftourisminthearea,itseconomicimpacts,anddiscussingtheeconomicbenefits

anddisadvantagestourismhasforthearea.Thestudywilladdressthefollowingquestions:

• HowdoestheVictoriaFallsandtheMosi‐oa‐TunyaNationalParkhaveaneconomic

impactontheLivingstoneareabygeneratingtourismrevenue?

• Whatarethemaineconomicbenefitsanddisadvantagesoftourisminthearea?

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2.Theoryanddefinitions

2.1Tourism

TheUNWTO(1995,p.10)hasdefinedtourismas“theactivitiesofpersonstravellingtoand

stayinginplacesoutsidetheirusualenvironmentfornotmorethanoneconsecutiveyearfor

leisure, business and other purposes”. Wall and Mathieson (2006, p. 19) have further

separatedtourismintothreebasicelements:

1. Adynamicelement:thedecisiontotravelandwhereto.2. Astayinthedestination:alltheinteractionwiththeeconomic,environmentaland

socialsystemsofthedestination.3. Aconsequentialelement:theeffectsresultedbytheformerelements.

Thetermstouristandvisitorareusedinterchangeablyinthispaper.

2.1.1Tourismexpenditureandaccounting

Tourismexpenditureisdefinedas“thetotalconsumptionexpendituremadebyavisitoror

onbehalfofavisitorforandduringhis/hertripandstayatdestination”(UNWTO,1995,p.

12).Themainchallengesofmeasuring thetourismsectorscontributionto theeconomy is

that most countries lack the data and information, and that tourism does not exist as a

distinct sector in any system of national accounts (Ennew, 2003, p. 9). An analysis of

tourisms economic impact will therefore vary according to which accounting system of

tourismisused.A largeamountoftourismspendingisdonein identifiablesectorssuchas

hotels, transport, recreational activities, etc.However, tourists also spendmoney inother

sectors not normally associated with tourism, such as food, clothing, gifts, and even the

hospitals industry has 2% of its output sold directly to tourists (Ennew, 2003, p. 9; Cai,

Leung, Mak, 2006, p. 37). The impact of tourism is therefore often underestimated by

governments(Hamilton,etal.2007,p.14).

2.2Economicimpact

Vanhove(2005,p.169),classifieseconomicimpactintosevenmajorgroups:

1. Incomegeneration.2. Employmentgeneration.3. Taxrevenuegeneration.4. Balanceofpaymenteffects.5. Improvementoftheeconomicstructureofaregion.6. Encouragementofentrepreneurialactivity.7. Economicdisadvantages.

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Becauseof limited space it is notpossible toelaborateoneachof thesepointshere. The

mostimportantandrelevantwillratherbediscussedinsection5and6inaccordancewith

empiricaldataandrelevanttheory.

2.2.1Measuringeconomicimpacts

The economic impact of tourism is generally measured through an economic impact

analysis,althoughaccordingtoStynes(n.d.,p.1),“Avarietyofmethods,rangingfrompure

guesswork to complex mathematical models, are used to estimate tourism’s economic

impacts”.Whiletheaimofthispapernotistocreateaneconomicimpactanalysis,itisstill

usefultotakeaquicklookatthebasics.Thiswillhelpustobetterunderstandhowtourism

affectsanarea. It is importanttonotethatthemodelused issimplified.Acomprehensive

studyof theeconomic impactswouldhave requiredamorecomplexmodel.Aneconomic

impactanalysisisusuallybasedaroundthefollowingsimplifiedequation(Stynes,n.d.,p.1):

Economic impacts = Number of Visitors x Average spending per visitor x Economic multipliers.

Thisequationbuildsonthefollowingconcepts(Stynes,Propst,Chang,Sun,2000,p.1.1‐1.2;

Vanhove,2005):

• Direct effects:Changes in sales, incomeand jobs in thosebusinesses that receive the

initial and direct visitor spending. For example hotels, restaurants, national park fees,

retailstores,etc.

• Multipliereffects (secondaryeffects):There‐circulationofmoneyspentby tourists in

thelocaleconomy.Consistofindirectandinducedeffects.

o Indirecteffects:Changesinsales,incomeandjobsinbusinesses/industriesthat

are“backwardlinked”.Thesefirmssupplythebusinessesthatdirectlyservethe

tourists. For example farmers or wholesalers that supply restaurants, or local

carpentersthatsupplyfurnituretohotels.

o Induced effects: Changes in economic activity resulting from household

spending earned from a direct or indirect effect from tourist spending. For

example local carpenters spending their income from sales to hotels on

groceries,clothing,housingandothergoodsandservicesinthelocalarea.

The illustrationbelowprovides a simplified viewof theeconomic impacts tourism

expenditurehasontheeconomy.

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Figure1–Economicimpactsfromtourismexpenditure.BasedonEnnew(2003,p.4),Foan,FrancoandJessen(2008,p.3‐4and,Stynes(2000,p.1.1‐1.2).

2.2.2Leakages

Anotherimportantconceptisthatofleakages.AccordingtoHemmatiandKoehler(2000,p.

25),

Financial leakages in tourism occur when revenue arising from tourism‐related

economic activities in destination countries are not available for (re‐)investment or

consumption of goods and services in the same countries: Financial resources "leak

away" from the destination country to another country, particularly when the tourism

company is based abroad and when tourism‐related goods & services are being

imported to the destination country.

55% of every dollar spent in developing countries is according to theWorld Bank leaked

backtodevelopedcountries(Boo,1990,p.13).AccordingtoLindberg(1991,p.24),leakages

suchasairtravelandmarketingareinevitable.However,hesuggeststwowaysofreducing

leakages. The first is for parks, hotels, businesses, etc. to use local goods and services

wheneverpossible.Thesecond is toplaceconditionswhengoodsandserviceshave tobe

imported,e.g.demandingthatmultinationalhotelchainstrainandemploy local residents.

Mitchell and Ashley (2007), however claim that leakages often are highly exaggerated.

Marketing, insurance, retailing, packing, and flights often amount to 50‐70% of the total

vacationcost.Manystudiesclassifythesecostsasleakages.MitchellandAshley(2007)reply

that“regardingthisasa‘leakage‘islikesuggestingthatstaffandaccommodationcostsfor

serving a cappuccino in a London café are ‘leakage’ from coffee plantations in Ethiopia!”.

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The percentage of leakages therefore varies greatly according to which definition of

leakageswasusedinthestudy.

2.2.3Linkages

Linkagesareconnectionsbetweenvarioussectorsandindustriesinaneconomy.Inthecase

of tourism, linkages often exist for example between hotels and providers of food and

drinks,but ingeneral spreadout intomostpartsof the localeconomy (Vanhove,2005,p.

173‐174).

Figure 2 – An example of linkages.

3.Methodology

Thisresearchpaperisbasedonaqualitativestudy.Quantitativeandqualitativestudiesare

sometimesseenasdirectopposites,butaccordingtoBrockingtonandSullivan(2003,p.59)

“qualitative methods can incorporate quantitative data and quantification”. Using both

methods is called the triangulationbetweenmethods (Jick, 1979, p. 602;McFee, 1992, p.

215‐217).While therewasnoquantitativedata gathereddirectly for this study, statistical

dataandreportsfromothersources/studiesareused.

3.1Dateandlocation

Thefieldstudywasconductedoverafive‐weekperiod,betweenthe18thofMarchand23rd

ofApril2009.Thefocusarea for the fieldstudywastheMosi‐oa‐TunyaNationalPark, the

VictoriaFalls,andthesurroundingLivingstoneareainZambia.Myplaceofresidenceduring

thestaywasinsidetheMosi‐oa‐TunyaNationalParkatalionrehabilitationprogramrunby

theAfricanLionEnvironmentalResearchTrust(ALERT).Myresearchwasnotbasedonany

oftheiractivities.

3.2Datacollection

Datacollectionwasmainlyconductedthroughopen‐endedinterviewswithinformantsand

observations of tourism in the Livingstone area. Informal conversations were also

conducted, but are used in addition to and not instead of interviews. The primary data

consists of interviews, conversations and observations only. All the statistics of tourist

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arrivals,etc.aregatheredfromsecondarydataacquiredfromreportsandorganizationsand

commissionswhereIconductedinterviews.

3.3Interviews

Interviewingisacomplexandtimeconsumingprocess.Toadequatelyaddressallaspectsof

thissubjectwouldrequiremorespacethanisavailablehere.Ihavethereforeonlycovered

someofthebasicandmostimportantaspects.

Theinterviewsconductedduringthefieldstudyweresemi‐structuredandemployed

openquestions.Thisenabledthe informanttoanswerthequestions intheirownwayand

providedflexibilityintheinterviewingprocess.Especiallystoriesornarrativesregardingthe

informantspersonalexperiencesarebestcapturedinasemi‐structuredinterview(Wengraf,

2001,p.5).Itwasofgreatimportancetobewell‐preparedfortheinterview,perhapseven

more importantthanif Ihadpreparedastructuredinterview,andcertainlyrequiredmore

timeforanalysisandinterpretationafterwards.

Disadvantages of conducting semi‐structured interviewswere that openquestions

could be harder for the informant to answer, were time‐consuming, and as mentioned,

answers received generally had to be analyzed more than structured questions probably

wouldhave.However,foralimitedstudylikethisIamconvincedthatopenquestionswere

moreappropriateandyieldedbetterresults thanforexampleastrictquestionnairewould

have.

According to Wengraf (2001, p. 28), “semi‐structured interviewing is very often

concernedtoexplorethesubjectiveworldoftheinterviewee,butthisdoesnotmeanthat

what they said is treateduncritically, acceptedat face value”. It is therefore important to

critically analyze the answers of the informant. Body language, tone of voice and the

discourse(s)areall importanttonote.Aninterviewaboutasensitiveorcontroversialtopic

willdependingonthediscoursesandviewsoftheinformanthaveverydifferentoutcomes,

andmightcreatepatternsofthingsthatarelikelytobesaid(“sayables”)andthingsthatare

unlikely or impossible to be said (“unsayables”)within that particular discourse (Wengraf,

2001,p.7).Onehastobecarefulaboutthesocialsettingtheinterviewisconductedin,your

behaviour, reactions to responses and the “power relationship” between you and the

informant(seminarinUTV2100,24.02.2009,UniversityofOslo).Greatcarehastobetaken

that the informant is not saying what he/she thinks you want to hear, or is modifying

answersbecauseofyourparticularstatusorrelationshiptotheinformant.Itisimportantto

beawareofdifferencesincultureandbehavioursothatthesedonotaffecttheinterviewor

youranalysisofit.

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During the interviews Ieitherusedanotebookoradigital recorder.Generally the

digital recorder was used in interviews that were conducted in offices or that were pre‐

arranged,whilethenotebookwasusedforshorterinterviewsinthefield.

3.4Dataselection,quality,replicationandanalysis

Thesamplingprocedureaimedtoincludeabroadvariationininformants.Sincethestudyis

qualitative,thereisnoneedforrandomselectioninordertoavoidsystematicbiasesinthe

sample. I did however try to interview people of different occupation, gender and social

status.AccordingtoMarshallandRossman(2006,p.63),

In the proposal, the researcher should anticipate questions about the credibility and

trustworthiness of the findings; poor sampling decisions may threaten these findings.

Due to the sample size, selection and type of study it is not possible to make a

generalization, but this was also not the point of the study. I have tried to include

information to make the study replicable, but it can generally be difficult for qualitative

studiestoeasilybereplicated(seminarinUTV2100,10.02.2009,UniversityofOslo).

Although there were a few gatekeepers before reaching some of the informants,

great caution was taken to ensure that these would not have an effect on who was

interviewedandwhattheystatedintheinterview.Noneoftheinterviewswhereconducted

withtheinformantssupervisorpresentorotherscenariosthatcouldhaveanimpactonthe

informantsanswers.Althoughthereisnospacefordiscussingthecredibilityofeachofthe

informantsstatementsinthispaper,attentionhasbeenpaidtotheirmotives.

After all the datawas collected the process of organizing it began. This included

writing rough transcripts of interviews that were recorded and the process of coding.

AccordingtoCoffeyandAtkinson(1996,p.26),“inpractice,codingcanbethoughtofasa

range of approaches that aid the organization, retrieval, and interpretation of data”. It is

however importanttorememberthattheprocessofcodingshouldnotbeasubstitutefor

analysis(Coffey,Atkinson,1996,p.26;Marshall,Rossman,2006,p.160).

3.5Informants

Intotaltherewere10interviewsconducted.Ofthese4werefemaleand6male.

Informant Position Location DateInformantno.1 ZambiaWildlifeAuthority[ZAWA]

researcher.ZAWAofficeLivingstone.

23.03.2009

Informantno.2 GuardintheMosi‐oa‐TunyaNationalPark.

Mosi‐oa‐TunyaNationalPark.

25.03.2009

Informantno.3 Streetvendor. Livingstone. 27.03.2009Informantno.4 Craftsmanandsouvenirsalesman. Livingstone. 27.03.2009

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Informantno.5 Farmer. MarketinLivingstone. 31.03.2009Informantno.6 LivingstoneTourismAssociation

[LTA]ProgrammeOfficer.LivingstoneTourismAssociationOfficein

Livingstone.

07.04.2009

Informantno.7 Souvenirsalesman. VictoriaFallsBridge. 09.04.2009Informantno.8 EmployeeatNationalHeritage

ConservationCommission[NHCC].NationalHeritageConservation

CommissionofficeinLivingstone,T1road.

15.04.2009

Informantno.9 GuideintheMosi‐oa‐TunyaNationalPark.


16.04.2009

Informantno.10

ManagerofThorntreeRiverLodge. ThorntreeRiverLodgeinsidetheMosi‐oa‐TunyaNationalPark.

20.04.2009

Some of the informants wished to remain anonymous, while the rest had no special

preference. Sincenoneof the informants specificallywanted their name in the study, the

informantsarenumbered.This is toensurethe informantssafety,andwillbediscussed in

moredetailinthenextsection.

In addition to the interviews I also conducted several informal conversationswith

craftsmen, national park employees, taxi drivers, store employees, etc. I also attended a

two‐hourconferenceonhowtheglobaleconomiccrisis isaffectingthetourismindustry in

Livingstone. It was hosted by the Economics Association of Zambia [EAZ] on the 26th of

March2009attheProteaHotelLivingstone.

Observationsprovedtobemorehelpfulthanfirstexpected,especiallyinsituations

that could sometimes be too chaotic to easily arrange an interview (e.g. markets).

Observationsweredoneatthefollowinglocations:

Location Purpose Date

BusridefromLusakatoLivingstoneand

LivingstonetoLusaka.

MainlyfortransportationtoLivingstone,butitalsoprovidedanopportunitytoobservetheroadbetweenLusakaandLivingstoneandtoseeiftravelingbybusissuitablefor

tourists.

18.03.2009and22.03.2009.

Livingstone.

Conductingobservationstofindoutmoreabouttheeconomicimpactsoftourismandthechallengesandopportunitiesitcauses.

Several,probably10+visitstoLivingstone.


Myaccommodationwassituatedinsidethenationalpark.AlthoughIcouldnotobservethewholeparkfromthislocation,Ididgetanoverviewoftheparkandwasableto

observeoneofthemostpopularactivitiesinthepark,whichistheelephantriding.

18.03.2009–22.03.2009.

LivingstoneAirport.

Togetafeelofthesizeoftheairport,whatstateitwasin,andobservethedifferent

typesofvisitors.

05.04.2009.

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VictoriaFallsBridge. Observingtourists,activitiesandstreetsalesmenontheVictoriaFallsbridge.

09.04.2009.

VictoriaFallsWorldHeritageSite.

Observingthetourists,craftsmenatthesouvenirmarket,etc.Collectinginformation

aboutentrancefees.

09.04.2009.

KazungulaFerrycrossing

WentovertheKazungulaFerrycrossingforatwo‐daytriptoBotswana.However,thisalsoallowedmetoobservethewaitingtimes,customsprocedures,ferry,andotherdifficultieswhentravelingto/from

Botswana.

17.04.2009and19.03.2009.

3.6Ethicalconsiderations

According to Scheyvens and Nowak, “the research process must ensure the participants

dignity,privacyandsafety”(Scheyvens,Storey,etal.2003,p.140).Informantswerealways

informedaboutthefollowingpoints:

• Thepurposeoftheresearch.• WhoIwasandwhyIwasconductingthestudy.• Howthedatacollectedwouldbeusedandpublished.• Thattheinformantcouldchoosetoremainconfidential.• My contact information if theywished, in case theywould like towithdraw their

statement(s).• Thattheinformantcouldreceiveacopythefinalizedresearchpaper.

In regards to the participants safety I did not follow any special precautions other than

commonsense.Mytopicofresearchisnotofthekindthatusuallyputspeopleindangerfor

expressingtheiropinions.However,sometimesresearchersunknowinglyput informants in

dangerbecauseofcultural, socialorpoliticaldifferences. Itcanbearguedthat informants

have the right to be credited for information provided, but since none of the informants

specifically requested to have their name in the report I chose to anonymize everyone.

(seminarinUTV2100,10.02.2009,UniversityofOslo).

4.TourisminLivingstone

4.1Sitesandattractions

Livingstoneissituatedinthesouth‐westernpartofZambia,approximately11kmfromthe

VictoriaFalls.ThetownofLivingstonewasestablishedin1905andnamedafterthefamous

BritishexplorerDr.DavidLivingstone.BeforethecapitalofNorthernRhodesia1wasmoved

from Livingstone to Lusaka in 1935, the townwas amajor European settlement (Zambia

TourismBoard,n.d.).In2000,thetownwasthe8thlargestinZambiawithapopulationof97

1ThenamewaschangedtoZambiauponindependencein1964(CentralIntelligenceAgency,2009).

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4882. Livingstone is almost entirely based around tourism activities, and has increasingly

been preferred by tourists over the once more popular town of Victoria Falls in nearby

ZimbabweduetotheMugaberegime(Mpofu,2009;Hamilton,etal.,2007,p.8).

Figure 3 – Map of Livingstone and surroundings. http://www.maps.google.com

TheVictoriaFallsweredesignatedaWorldheritagesite in1989 (EncyclopædiaBritannica,

2009), and are generally considered one of the top tourist destinations in Africa (Zijlma,

n.d.).However,Zambiaisstillonlyreceiving3%ofsub‐SaharanAfricantourists(Hamilton,et

al.,2007,p.5).Thepotential for increasingthenumberofvisitors is thereforesubstantial.

The Mosi‐oa‐Tunya National Park lies only a few kilometers outside of Livingstone. The

nationalparksareaisamere68squarekilometersanditonlycontainsthreeofthe“big5”3

(ZambianWildlifeAuthority,n.d.).However, ithas inpreviousyearsbeenthemostvisited

nationalparkinZambia,andhasonlyinrecentyearsbeensurpassedbytheSouthLuangwa

NationalPark(Hamilton,etal.,2007,p.9).

In a studyby theNaturalResourcesConsultativeForumconducted in cooperation

withtheWorldBank,54%oftouristssaidtheyhadtheVictoriaFallsastheirmainintention

ofvisitingZambia(Hamilton,etal.,2007,p.9).Zambia’swildlifeattracted28%oftourists,

whileadventure tourismaccounted for5%.BecauseofLivingstone’shighconcentrationof

2PopulationcensusbytheCentralStatisticalOfficeZambiain2000.Web:http://www.citypopulation.de/Zambia.html&http://www.zamstats.gov.zmCited:15.04.2009. 3Atermthatencompasseslion,elephant,buffalo,blackrhinoandhippo.

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adventure‐related activities, it is likely that most of these visitors travel to Livingstone.

AccordingtoHamiltonetal. (2007,p.9)andstatisticsobtainedfromtheZambianWildlife

Authority [ZAWA] (informant no. 1), the Mosi‐oa‐Tunya National Park received 19 972

visitors in2005,onlybehindSouthLuwangaNationalParkwith25814,andwellaheadof

thirdmostvisitednationalpark,KafueNationalParkwith6202visitors.

The Victoria FallsWorld Heritage Site received a total of 156 612 visitors in 2007

(statisticgatheredfrominformantno.8attheNationalHeritageConservationCommission).

Of these, 110 790 were Zambian and 44 267 were non‐Zambian. The actual number of

touristsviewing theVictoriaFalls couldpossiblybemuchhigher though.TheVictoriaFalls

canalsobeviewedforfreefromtheVictoriaFallsBridge.TheVictoriaFallsWorldHeritage

Site however, allows the falls to be viewed from a much closer distance. There is

unfortunatelynodataonthenumberoftouristsvisitingtheVictoriaFallsBridge.Fromthe

statistics presented in this chapterwe canestimate that Livingstoneprobably attracts 60‐

70% of international tourists visiting Zambia (this is however just an estimate and is not

confirmed).

TheactivitiesandattractionsofferedaremainlybasedontheVictoriaFallsandthe

Mosi‐oa‐Tunya National Park, and include safaris, elephant rides, bungee‐jumping, white

water rafting, river cruises, fishing, and mircolight and helicopter flights over the falls.

According to informant no. 6 at the LTA, a smaller percentage also come for the areas

history.LivingstonealsoofferstheLivingstoneMuseum,whichhoweverreceivesfewvisitors

(Mateke,2002),andtheMukunivillagewhichofferstouriststheexperienceofatraditional

Zambiavillage.TheVictoriaFallsandMosi‐oa‐TunyaNationalParkarethereforevitalforthe

area.InthewordsofasouvenirsalesmaninterviewedontheVictoriaFallsBridge,“weare

veryluckytohavetheVictoriaFallshere.Withoutthemwewouldhavenothing”(informant

no.7).TherewasabroadconsensusamongalltheotherinformantsaswellthattheVictoria

FallsareextremelyimportantforattractingtouriststotheLivingstonearea.

4.2Visitors

There is unfortunately no specific data available on the number of tourist arrivals in

Livingstone.ByusingsomeotherrelevantstatisticsIcanhowevermakearoughestimateof

visitor arrivals. According to the Ministry of Tourism, Environment & Natural Resources

(2008,p.9)therewere668862internationalvisitorstoZambia in2005,ofwhich176104

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couldbeclassifiedasnaturetourists4(Hamiltonetal.,2007,p.6).By2007,thenumberof

international visitors had risen to 897 413 (Ministry of Tourism, Environment andNatural

Resources, 2008, p. 9). The origin and purpose of visit for these international visitors is

showninthetablebelow(ibid):

Areaoforigin

Holiday Business Conference Study VFR5 Other Total

Africa 125793 270984 36680 8769 98660 119665 660551Europe 43950 46666 11844 2980 23184 17105 145729Americas 20579 12469 3859 1207 5855 6637 50606Asia&Oceania

13721 10434 2913 1132 5779 5578 40527

Total 204043 340553 55296 14088 133478 148985 897413

The next table shows the number of visitors entering the border posts that are in close

proximityofLivingstone.

VictoriaFalls Livingstoneairport Kazungula KatimaMulilo Total89440 73539 79871 49823 292673

According to Hanyona (2002), there were 300 000 visitors to the Victoria Falls on the

Zambian side in 2001 (although there is no year provided, so this is only an assumption

basedon the restof thearticle). Ifwe take the large increase in international visitors the

previous years into account,we canbequite sure that thenumber is higher today.At its

peak in the early 1990s, the town of Zimbabwe received over 800 000 tourists annually

(Hamilton,etal.,2007,p.8),andwiththedeclineoftouriststoZimbabwethelastfewyear

(Mpofu, 2009) the number of tourists visiting Livingstone could be 400‐500 000 per year

(including visitors for business and conferences, which according to the UNWTO also is

countedastourism).

5.Economicimpacts

Therewasabroadconsensusamongthe informantsthattheMosi‐oa‐TunyaNationalPark

and the Victoria Falls are the main source of revenue for the area. Even though the

informantswerechosenfromquitedifferentoccupationsandsocialstatuses,theeconomic

impactoftourismwassomethingtheyallrecognizedtobevital.

4AccordingtoasurveybyHamiltonetal.(2007,p.9),approx.88%oftouristsvisitingZambiacanbeclassifiedasnaturetourists.5Visitingfriendsand/orrelatives.

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5.1DirectincomeoftheVictoriaFallsandMosi‐oa‐TunyaNationalPark

TheZambianWildlifeAuthority [ZAWA] is administering theMosi‐oa‐TunyaNational Park,

while theNationalHeritageConservationCommission [NHCC] isadministering theVictoria

FallsWorldHeritageSite.ZAWAemploys62uniformedofficersandasupportivestaffof18

(interviewatZAWA, informantno.1).Accordingto the informant,ZAWA’smaineconomic

impactisthroughvariousfeescollectedfromthepark,whichinmostpartarefunnelledto

the government. Another economic impact is the conservation of the national park to

ensure that future generations also can benefit from the tourism revenue the park

generates.ZAWA’stotalrevenuefromtheMosi‐oa‐TunyaNationalParkfor2008amounted

to 602 253,47USD (ZAWA, 2009). Althoughnot amassive number by itself, this is only a

smallportionofthetotalrevenuetheareaiscollectingfromtourism.

AnestimateIhavecalculatedshowsthatTheNHCCpotentiallycollectedupto4426

700,00USD inrevenuethroughtheVictoriaFallsNationalHeritageSitefromnon‐Zambian

tourists in2007,whilerevenuefromZambianresidentswaspotentiallyupto46109USD6

(interview with informant no. 8 at the National Heritage Conservation Commission). It is

howeverimportanttomentionthatthesecalculationstakeintoaccountthatallvisitorsare

adults. The price for children’s entrance is 5 USD instead of 10 USD for adults for non‐

residents and 1080 Zambian Kwacha [ZMK] for children instead of 2160 ZMK for adult

residents.Theactualrevenuecollectedisthereforelowerthanthefiguresprovided.During

my observations in Livingstone, theMosi‐oa‐Tunya National Park, the Livingstone airport

and theVictoriaFalls Ididhoweverobserve few foreign touristswithchildren. I therefore

believethattherevenuecouldbearound3600000USDassumingthat20%ofvisitorsare

children. This is only an estimate. A detailed visitors report that separates adults and

childrenwasunfortunatelynotavailabletome.

5.2Indirectincome

While theVictoriaFallsWorldHeritageSiteandtheMosi‐oa‐TunyaNationalParkcollecta

fairamountofmoneyfromentrancefeesandtaxes,itistherevenueofthehotels,lodges,

touroperators,restaurants,stores,etc.thatgeneratemostoftheincomeforthearea.Ina

reportby theNaturalResourcesConsultativeForum(Hamilton,etal.,2007,p.5‐6), itwas

calculated that around 25% of international visitors could be classified as nature tourists.

ThismeansthattheyvisitedZambiawiththemainintentionofexperiencingZambia’snature

attractions.AccordingtoHamiltonetal.(2007,p.5),“...eachofthesenaturetouristsspent 6ConvertedfromZambianKwacha(ZMK)toUSDollars.ExchangeRate1USD=5190ZMK,21.05.2009.

15

about $1,100, generating a direct and indirect impact of nearly $2,300 in GDP, $1,300 in

wagesandnetincomeofunincorporatedbusiness,$420intaxrevenue,and$425inimports

ofgoodsandservices”.Thespendingof these touristsamountedto194millionUSD,with

themultipliereffectscominginaddition,whichthereportclaimswilldoublethenumber.If

we use the estimate made in section 4.1 that 60‐70% of international tourist arriving in

Zambiatravel toLivingstone, thenthismeansthatanapproximateof250‐280millionUSD

werechannelled throughLivingstonearea fromnature touristsonly in2005. Ifwe include

business and conference visitors, the number will be even higher. It is however again

importanttonotethattheseareestimatesonly.Leakagesmustalsobetakenintoaccount,

such as profits from many of the foreign‐owned hotels flowing out of the country and

importsoffood,drinksandothergoods.

6.Economicbenefitsanddisadvantages

Astudyofthis limitedsizecannotencompassall theeconomicbenefitsanddisadvantages

that tourismmighthave for theLivingstonearea. Ihave thereforechosen to focuson the

issuesthatIthroughinterviewsandobservationsfoundtobethemostimportant.Itisalso

importanttonotethatifthesocio‐economic,environmentalandculturalimpactsoftourism

wereevaluated alongside theeconomic impacts, thebenefits anddisadvantages couldbe

quitedifferentthaninthisstudythatfocusesontheeconomicimpactsonly.

6.1Increasedgovernmentearnings

6.1.1Economicbenefits

In section5.1 I estimated that the revenueof ZAWAand theNHCCwas approx. 4million

USD in 2008, but possibly higher.Most of this revenue is according to informant no. 1 at

ZAWA channeled to the government. Although hotels, guesthouses, tour operators, etc.

havenotbeenchargedVAT7thelastfewyearsasanincentivetoinvestintourismexpansion

(informantno.6atLTA;informantno.10atThorntreeLodge),thegovernmentstillbenefits

fromothertaxes,importdutiesandvisacosts(thetotalmacroeconomiceffectsofvisacosts

are however disputed). According to informant no. 6 at the LTA, the effects of the VAT

exemption for the tourism industry inLivingstonehasmorebenefits thandisadvantages if

one looks at the broad economic perspective. While the LTA is an organization that

promotes tourism and therefore is positive to theVAT exemption, I do agree on theVAT

exemption at least on a short termbasis of 5‐10 years. Zambia is expensive compared to

7Valueaddedtax.

16

neighboringcountriesandtheVATexemptioncanhelpinreducingthepricedifferences.Itis

unfortunatelynotpossibletocalculatetheamountofmoneygained/lostbecauseoftheVAT

exemptionduetoalackofdata.

EvenwhenconsideringtheVATexemption,thegovernmentsearningsfromtourism

shouldstillbequitesubstantial,consideringthatthe176000naturetouristsvisitingZambia

in 2005 contributed to 7% of government revenue when direct and indirect linkages are

counted.Ifweincludebusinessandconferencevisitors,andthefactthattherehasbeenan

increasefrom668862internationalvisitorsin2005to897413internationalvisitorsin2007,

tourismisdefinitelyaveryimportantpartofgovernmentearningsandaneconomicbenefit

totheLivingstonearea.

6.1.2Economicdisadvantages

Tourismcan inrarecaseshaveeconomicdisadvantagesforgovernmentearnings.Thiscan

occurifthecostofmaintaininginfrastructurefortourismisveryhigh,ifmostofthetourism

revenue is leakedoutof the country, tourismcreateshigh inflationby raisingprices, or if

tourismdivertsinvestmentsandlaborfromothersectorsmorebeneficialforthatparticular

countryorarea(Mathieson,Wall,1990).ForLivingstonehowever,thecaseisclearthatthe

economicbenefitsfaroutweightheeconomicdisadvantagesthattourismmightbring.Inthe

viewofinformantno.6atLTA,“IfitwerenotfortheVictoriaFallsandthepark,itwouldbe

likewhatweusuallycallghosttowns,becauseyoudon’tfindareason,aneconomicreason

thatiskeepingthetownactive”.Thisisalsotheviewofalltheotherinformantsinterviewed.

A town that has no economic activity cannot bring in government earnings. The case is

thereforeclearthattourismoverallisbeneficiaryforincreasinggovernmentearnings.

6.2Jobcreation


According to informantno.6at LTA, “themainprivate sectorbusiness is just tourism, for

Livingstone”. Through direct and indirect linkages, most of the businesses are therefore

dependentontourism.Whilejobsinthetourismandservicesectorsometimespaylessthan

other sectors such as manufacturing (Mathieson, Wall, 1990), the wages in Zambia are

generallyquite lowandmost informantsmentionedthatpeoplearehappytoevenhavea

job. Informal conversations and interviews (informant no. 4; informant no. 7) with locals

17

working in the informal sector8 reveals that a significant percentage of the people in the

Livingstone area make a living from stray jobs, selling arts and crafts to tourists, money

changing, various repair services, etc. Identifying the exact percentage of the population

that isdependenton the informalsectorwouldrequireamorecomprehensivestudy. It is

thereforeuncertainhowmuchofthepopulationreallyisdependentontheinformalsector.

Itishoweverclearthattheinformalsectorisalmostentirelybasedaroundtourismthrough

direct or indirect linkages. According to Vanhove (2005) and the UNWTO (n.d., p. 1‐2)

tourism is also beneficial for micro scale entrepreneurs, such as artists starting small

souvenirshops.

AreportbytheWorldTravel&TourismCouncil(2009,p.4),expects72000jobsin

Zambiatobegenerateddirectlyand indirectly fromtourism in2009, representing4,1%of

totalemployment(WorldTravel&TourismCouncil,2009,p.4).Ifweuseestimatesmadein

section4.1 and4.2, thenbetween44000and50000 jobs in Livingstonearedirectly and

indirectly generated from the tourism sector. These are however estimates and are not

confirmedbystatisticaldata.Asmentionedinsection1.1,theUNWTOstatesthattourism‐

related jobsare labor intensive,andgenerallyrequire littletraining.This issupportedbya

studyinMexicobyBondandLadman(1972,p.46)whereinvestmentsinthetourismsector

createdover50%morejobsthaninvestmentsinthepetroleumindustryandmetalproducts

industry.AccordingtoMathiesonandWall(p.43),“thelabourrequirementsofthetourist

industry are often especially suited to conditions prevailing in developing countries”. In

total,tourismhasapositiveeconomicimpactonjobcreationintheLivingstonearea.


Tourism in Livingstone has seasonal variances, as is the case in most other tourism

destinations in the world (Vanhove, 2005, p. 177). While the variances might not be as

extremeasforexample inskiresorts;statisticsfromtheMinistryofTourism,Environment

and Natural Resources (2008, p. 13) still show a difference of 69 152 visitors between

January(113279)andFebruary2007(44127).Therearehoweveronlythreemonthsofthe

year with less than 70 000 visitors, so the differences are not always this extreme.

Diversifyingtheeconomycouldprovidejobsindifferentsectorsthatcouldensurejobsyear‐

round. However, the Livingstone area offers few jobs in other sectors than tourism

(informant no. 6; informant no. 9; informant no. 10). Problems observed such as a low

percentage of higher education in Livingstone and Zambia in general (CIA, 2009),

8"Thenon‐structuredsectorthathasemergedintheurbancentresasaresultoftheincapacityofthemodernsectortoabsorbnewentrants"(ILOandUNDP,1972).

18

investmentsavailablearelow(informantno.10)andthefactthemainroutestoLivingstone

eithergoviatheVictoriaFallsBridgewhichhasweightrestrictions,theKazungulaferrylink

toBotswanawhere trucksoftenwait in line fordays,or the for themostpart inadequate

road to Lusaka (data gathered from observations and interviews) all cause challenges for

settingupexport‐oriented industrialproduction.Farmingwouldcouldbeanalternativeto

tourism, but has its own seasonalities. In addition, the Livingstone area is according to

informants (informant no. 4; informant no. 5; informant no. 6; informant no. 7) and

observationsquitesandywithsoilnotwellsuitedforagriculture.

6.3Improvedinfrastructure


MathiesonandWall(1990)andVanhove(2005)claimthattourisminmostcasesincreases

the need for expanded and modernized infrastructure such as roads, electricity, water,

sanitation,airports,and inmore recentyears internetand telecommunicationaccess.The

expansion in infrastructurecanasnoted in section1.1 (UNWTO,n.d.,p.1‐2)benefitpoor

communitiesandthegeneralareawheretourismisconducted.Mostinformantsagreedthat

theinfrastructurehasbeenimprovedasaresultoftourism,butwerenotentirelyconvinced

of the short‐term benefits it has for the local population. Notable infrastructure

improvements the last few years have been in the field of internet access and

telecommunications. From observations and interviews I learned that it was first and

foremost the tourism industry thatwentonline, and that the rest of the sectors followed

after.Roadstoandfromthetouristattractionsareusuallyofaboveaveragestandard.


Even though tourism increases the need for infrastructure, it does not always benefit the

localpopulation,andcaninsomecasesbeaneconomicdisadvantagetothearea,especially

iftourismishighlyseasonal(Mathieson,Wall,1990;Vanhove,Norbert,2005,p.177).More

infrastructurealso requireshighermaintenancecosts.While Iwasnotable toanalyze the

stateandcostofmaintainingtheinfrastructureinLivingstone;interviewsandobservations

have given me at least a partial view of the situation. In general, the road network in

Livingstone is inadequate. Potholes are frequent, andmany of the roads in town are not

paved.Theroad toVictoriaFallsand theMosi‐oa‐TunyaNationalParkarehoweverpaved

andinmuchbetterconditionthanthedirtroadsinpartoftown.Abiastowardthetourism

areasdoesexisthere,anditdoesnotseemlikethelocalpopulationgainsthatmuchfrom

improvedroads.Inregardstoelectricity,waterandsanitationitisdifficultformetomakea

19

conclusion du to little data and uncertainty of informants knowledge about the total

situation. However according to informants no. 3, 4, 5 and 7, who live in poorer areas

around Livingstone, not much of the infrastructure improvements have reached them

directly. But they seem to be optimistic about the benefits of improved infrastructure

reachingtheminthefuture.IntotalIwouldsaythatwhileimprovedinfrastructurehashad

aneconomicbenefitonthetourismsectorintheLivingstonearea,thebenefitsforthelocal

populationarenotasclear.ThiscouldhoweverchangeiftourismenablestheGDPinZambia

toriseandthegovernmentcanprovidebetterinfrastructureforall.

6.4Macroeconomicstabilityandothereffects


AccordingtoMathiesonandWall(1990,p.44‐45),thealternativeforeignexchangeearner

for developing countries is generally the export of primary products9. The price for these

primaryproductsisgovernedbytheworldmarket.Zambiaisamajorcopperexporter,but

the drastic price falls the last years have made the situation difficult for this sector

(informant no. 1; 3; 6; 8). Tourismon the other hand has aswe have seen in section 4.2

steadilyincreased,exceptforthesecondhalfof2008duetotheglobalfinancialturmoil(EAZ

conference,26.03.2009).Thishashoweverhadaneffectonallsectors,notonlytourism.As

seen in section 6.2.1, the tourism sector employs over 50% more people for a given

investmentthanthepetroleumindustryormetalproductsindustry.Tourismgenerallyalso

createsmorelinkages,andthereforeincreasedtourismgrowthwillhaveaneffectonother

industries as well (Vanhove, 2005). For the Livingstone area, tourism creates

macroeconomicstability,andkeepsinvestmentsflowingin(althoughthesizeofthemcould

accordingtoinformantsbehigher).Beingsituatednexttoaworldheritagesite, it ishighly

unlikelythattouristssuddenlywillstopcoming.TourismtotheVictoriaFallsandtheMosi‐

oa‐TunyaNationalParkcanthereforeberegardedasaresourcethatwillgeneratejobsand

incomeforfuturegenerationsiftheyaremanagedproperly(informantno.1atZAWA)and

contributetoLivingstonebeinga“safe”destinationtoinvestin.


AccordingtoinformantsandLimwanya(n.d.),rentandhousingpriceshaverisenduetonew

hotels and expanded tourism in Livingstone. The expanded tourism sector has brought in

newjobs,butthishasalsocausedpressureonthehousingmarket,andpriceshavegoneup.

9Rawmaterialsandfoodstuffs.

20

Houses that could have been rented out are often turned into guest houses or sold to

investors.Thechallengewillthereforebeforthegovernmenttobuildadditionalhousingto

combatthe increasedprices.AccordingtoVanhove(2005,p.175‐176,therise in landand

rent prices actually has a positive netmacroeconomic benefit for an area, but thosewho

ownnolandlooseout.Anotherimplicationoftourismcanbeincreasedinflation.Whilethis

can be connected to the rising housing prices, there is really no data for inflation in

Livingstone.Vanhove(2005,p.174‐175)claimsthattheincreaseinpricesoftenonlyoccurin

certainareasandcertaingoods.IfIwastomakeanassumptionIwouldsaythesameisthe

caseforLivingstone.Ididnotreallyhearmuchaboutinflationfromanyoftheinformants,

soIdonotrecognizeitasasignificantproblem,eventhoughIcannotruleitout.

7.Conclusion

ThisstudyhasshowedthattheVictoriaFallsandMosi‐oa‐TunyaNationalParkhaveamajor

impact on the economy of the Livingstone area by generating tourism‐related income.

Interviews and observations have revealed that without tourism there would be little

incomegeneratedinthearea.Therearefewalternativestotourismdutothegeographical

position, infrastructure and educational levels. The analysis has showed that the net

economicbenefitoftourismintheLivingstoneareaismainlypositiveinregardstoincreased

government earnings, job creation, infrastructure and macroeconomic stability. It is

however important to note that this study only considers the economic benefits and

disadvantages. A study thatwould have encompassed the socio‐economic, environmental

andculturalimpactswouldperhapshaverevealeddifferentresultsthanthisstudyhas.

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Documents

Doppelmayr A (2009) Economic impacts of tourism in Livingstone, Zambia