Tourism industry plays a significant role in the economies of small islands as it expands the chances of economic and cultural diversification in the region (Mora, 2015). If there is a proper linkage between different economic sectors, the benefits generated by the tourist industry get extended to all the sectors of the economy including fishing, agriculture, real estate, industry, transport and goods and services etc. It is important to mention that the growth of the tourism industry in small islands and developing states is not as straightforward as in developed nations as there is less scope of growth due to several cultural, economic and legislative constraints (Avic, Madanglu and Okumus, 2011). The same is the case with Dominican Republic where the tourism industry grabbed the attention of the authorities between 1970’s but had been experiencing several dooms and glooms due to its small economy. The government took several initiatives to enhance its inbound tourism but somehow there had always been an imbalance between the inbound and outbound tourism. On the other hand, the attempts to support the inbound tourism and make tourism sustainable, three were some offsetting negative impacts generated due to leakages in the economy, low infrastructure and displacement of the local residents (Tour Sustainability, 2011).
The essay is divided into five sections. The first section narrates the difference between inbound and outbound tourism. The second section is about the tourism industry of Dominican Republic while the next section discusses the issues Dominican Republic faces in balancing its inbound and outbound tourism. The second last section provides the recommendation to solve the challenges faced by the island, and the last section provides concluding remarks.
Tourism means when people move from one part of the world to another for a specific purpose. These purposes might include study, marriage and medical treatment, etc. There are three major kinds of tourism; domestic tourism, inbound tourism, and outbound tourism. Domestic tourism means when people move from one part of their country to another part but do not leave the boarder of the country. Inbound and outbound tourism, on the other hand, are associated with travels across borders. Inbound tourism means when people of other countries enter a country while outbound tourism means when people of a country go to another country (Mora, 2015).
Balancing these two types of tourism plays a vital role in the balance of payments of a country because whenever people travel, they spend money that benefits the host economy. So if a country’s outbound tourism is more than the inbound tourism it means that more people are leaving the country for tourism and spending money in other countries. If the same amount of inbound tourism is not present to balance the effect, the economy of the country might suffer badly (Goodwin, 2015).
Dominican Republic is a demographically small country with the population of 8 million people dispersed over the area of 18,816 square miles. In 20th
century, inbound tourism of Dominican Republic was far less than the outbound that magnified the need of more focus on enhancing the inbound tourism of the country(Avic, Madanglu and Okumus, 2011).For that purpose, Dominican government initiated several programs and invested a huge amount of money to support the industry and also encouraged the local and foreign investors to invest in the sector (Focus on Globalization, 2015).
In 2008, the GDP growth of Dominican Republic was 5.5%, and the tourism and agriculture are the two main industries in Dominican Republic (Boomerang, 2015). The tourism had been in the focus of Dominican government since last few years as this sector account for 1% of the small economy of the state. In the 2012, Dominican Republic received 5 million tourists; this rate was 7% higher than the previous year. The government also raised the budget for the tourism ministry to $2.5 billion to support the industry more and designed marketing strategies to promote the industry (Etoria-King, 2013). The focus on infrastructure is also magnified. According to statistics, among 154 countries, Dominican Republic holds the 12th
place in countries that focus on infrastructure development to support tourism industry (Euromonitor, 2013).
In the Caribbean region, the tourism industry of Dominican Republic had the highest volume and was also the most visited destination in the year 2013 with 4.7 million tourists (Mayers, 2014). But the inbound tourism in the state is still not enough to balance the outbound tourism. Balancing inbound and outbound tourism is necessary because it affects the balance of payments and demand and supply sector of a country (Mora, 2015). Another challenge that the Dominican Republican economy faces is to find out the perfect link between the local economy and the tourism industry of the country. Sometimes, there is a lot of potential of growth and development in a tourism industry but the linkage between the economy and the tourism industry is so weak that the positive impacts of the tourism industry do not get passed on to the economy, so the results lead nowhere(Markandya, Taylor and Pedroso, 2015). In the same way, there is also a lack of coordination between the supply and demand sectors of the economy. Whenever new tourists enter a country, they spend their money on the goods and services in that country that are provided by the local producers. Sometimes, due to the lack of coordination, the suppliers are not able to provide the (quantity and quality of) goods and services demanded by the tourists that extends negative impacts to the economy and might even reduce the inbound tourism (Ashley, Goodwin and McNab, 2005).
Sometimes, the tourism development policies and construction projects are implemented on the displacement of residents that can affect several indigenous lives. This displacement of local people might cause sense of deprivation in the local people and the Dominican Republic needs to keep this factor in account before compelling the local people to move from one part of the country to another. Displacement is not just about people, it also about movement of capital from one sector of the economy to another (Optimal Economics, 2012). Tourism industry-focused policies also result in displacement of capital and investment from another sector to the tourism industry that can generate offsetting negative impacts on the economy. Cap Cana resort is a classic example of displacement in Dominican Republic when hundreds of people from the region of Juanillo were displaced from their houses in 2006. Some of the people who disagreed to displace were forcefully evicted from their hometown (Tour Sustainability, 2011).
Another problem that Dominican Republic confronts is the development of infrastructure. Because of the small size of the economy and leakages in the intra-industry system, the island faces several constraints in infrastructure development. On the other hand, the authorities have to use the agriculture land for infrastructure development due to the rapidly rising prices of buildings and to meet the rising need of the tourism industry and capacity building (Tosun, 2005)
With an intention to focus more on the tourism industry, the government gave more importance to developing ‘enclave’ tourism that also affected the agriculture land of the state and generated negative impacts for other sectors of the economy because of the negligence and also resulted in the exploitation of the labour community who had to compromise on low-paying jobs. That might be the reason that Dominican Republic is called ‘A rich state with poor people.’ This scenario also raised a question in the state that the tourism industry is not trying enough to develop ‘pro-poor tourism (Mayer, 2006).’
Apart from the challenges and hurdles that come into the way of tourism development in Dominican Republic, there are several drawbacks of tourism development in the country, and environmental effects are one of them (Tosun, 2000). It has been reported that more focus on the tourism industry has attracted many tourism firms to the region which focus on establishing hotels and resorts to accommodate and attract the tourists. This act might be good for the tourism industry but can affect the environment very badly eventually leading to obstacles generation not only for the tourism industry but the entire economy (Vilardo, 2009).
Balancing inbound and outbound tourism in a developing country is nothing short of a herculean task. Because, in a developing country, the results of a sector-targeted policy are not as straightforward as in a developed country as there are a lot of other complications e.g. lack of funds, political and economic instability, requirement of focus on other areas etc. that might act as a hindrance in the process of development and implementation of the specific policies. The same is the case with Dominican Republic. Below are some recommendations that might be used as an insight in balancing the inbound and outbound tourism in Dominican Republic (Steiner, 2001).
Focusing more on infrastructure can help in developing the tourism industry in Dominican Republic because tourists get more attracted to a region if the infrastructure of that region is good and tempting. These structural changes with the help of capital investment can lead to a development of inbound tourism.Development of beaches can also help attract more tourists and in that way might help in balancing the inbound tourism with the outbound tourism and support the formal and informal tourism in Dominican Republic at the same time.
Dominican Republic needs to enhance its technology and focus of diagonal integration to maintain a balance between inbound and outbound tourism and the tourist firms should focus on marketing techniques to attract more tourists towards the region. Moreover, more investment should be made in the research and development sector to support the industry and implement policies that can help narrow the gap.
Developing ‘enclave tourism’ might not be highly profitable for Dominican Republic, but it can play a vital role in balancing the inbound and outbound tourism.But it should also be made sure that the tourism does not result in displacement and exploitation at a bigger because, in that case, the benefits of inbound tourism would be offset by the negative impacts of exploitation of indigenous people.
Tourism industry has a vital role in the growth of an economy and this importance magnifies even more when the economy is a small island. Because the small island has smaller economy, developing its tourism industry is one of the most vibrant ways to develop its economy and generate capital. Dominican Republic, in the same way, is a small island in the Caribbean. It has a small population of eight million. In late twentieth century, the authorities of the state started realizing how important the tourism industry is for the development of the economy, so they started focusing more on the sector and formulated several policies for the growth of tourism and balanced the inbound and outbound tourism of the state.
But as the Dominican Republic is a small state with limited economy and fewer opportunities, it faces several obstacles in the growth of its tourism industry. The growth of tourism requires the development of infrastructure that is only possible by the displacement of local people due to limited territorial boundaries of the state. This displacement results in a sense of deprivation and also rejects the doctrine of ‘pro-poor tourism.’ On the other hand, leakages in the economy do not let the benefits of the tourism industry get extended to other sectors of the economy and ‘enclave’ tourism also hinders sustainable tourism.
There are several solutions recommended by the analysts to face the challenges in the growth of the tourism industry. The government should try to focus on developing ‘pro-poor tourism’ instead of just tourism and develop the infrastructure sustainably to put a halt to offsetting negative impacts. On the other hand, more focus on technology can help keep a balance between the outbound and outbound tourism and more focus on research and develop can also help to target the sector meticulously.
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