The “Ideal Utilization” Of Tourism Generated Revenue

Tourism has the proven potential to usher in significant economic development for an area.

However, we can “tap” that potential only if we channelize the Tourism generated revenue in the appropriate manner. And unfortunately a gross problem with us is that most of us perceive Tourism just as a means to generate revenue, without bothering much about the “ideal utilization” of the revenue that has been generated.

We must remember that the revenue generated by the tourism activities in a place should ideally be utilized for the economic growth of the local people. Yes, that is the only way to translate the Tourism activities in a place into a strong economic development of the latter.

Fine. But how can we maximize the utilization of the revenue for the benefit of the local people?

Well, for that we have to ensure that the largest possible chunk of the revenue generated by Tourism goes to the hands of the local community.

Fine again. But how can we ensure that the local community gets the largest possible share of the revenue generated by the local Tourism activities?

Well, the flow of the Tourism-generated revenue to the local community is directly proportional to the involvement of the latter. In a simpler language, more the local people will be associated with the local Tourism activities, more will be their share in the revenue generated by those activities.


So if the government is serious about using Tourism as a means to uplift the economic condition of the local people in remote and/or underdeveloped areas, then it must craft the tourism infrastructure in those places in such a way that it has ample room for the involvement of the local people. In fact, involvement of the local community must be made one of the “thrust areas”, enjoying the same focus and importance as enjoyed by other key issues like building of roads and air/railway connections, setting up of hotels, formulation of marketing/promotion strategies, etc. It should be the government’s responsibility to identify each and every way to involve the local community, e.g.

• As employees in local hotels/restaurants (like in-house tourist guide of a hotel, waiter in a restaurant, etc.)
• As entrepreneurs, either selling commodities directly to tourists (like selling local handicrafts in the market) or playing vendors to other players who are directly interacting with tourists (like supplying food ingredients to local hotels/restaurants)




As of now, the success of a tourist spot is judged mainly (if not only) on the basis of the tourist inflow and the eventual revenue generation, i.e. how many tourists it has received in a specific period of time, and the revenue generated therein. Now the government should add another parameter, i.e. what percentage of the Tourism-generated revenue has been utilized for the economic upliftment of the local people. After all, what is the benefit of the revenue if the same is not utilized for the gains of the local people?

Now it is often found that the civil society (NGOs, intellectuals, etc.) keeps a track of the environmental-friendliness of a Tourism project, i.e. whether the project is causing any damage of any sort to the natural resources, etc., of that spot. It is time the civil society also got watchful about whether a successful Tourism project is resulting in appropriate economic gains for the local community, and questioned the government if that is not the case.

Tourism at a spot cannot flourish without the co-operation of the local people. And if they do not get proper “dividend” from the local Tourism business, then they will not only feel isolated from it but will also get hostile to the same. And for any business initiative (Tourism-related or otherwise) no threat can be graver than the hostility of the local people.


So the issue of “revenue sharing” is not only a question of ethics, but also of sustainability.