THE EFFECT OF TOURISM ACTIVITIES ON THE WELFARE OF THE PEOPLE IN KASESE MUNICIPALITY, KASESE DISTRICT

INTRODUCTION

1.1 Background to the study

Welfare is the provision of a minimal level of well-being and social support for citizens without current means to support basic needs. In most developed countries, welfare is largely provided by the government from tax income, and to a lesser extent by charities, informal social groups, religious groups, and inter-governmental organizations. Welfare can take a variety of forms, such as monetary payments, subsidies and vouchers, or housing assistance (Blank, 2002).

Although the development of a tourism industry is viewed as an engine of economic growth and development in the inbound country, the sector is mostly dominated by foreigners and has a lot of ‘leakages’ which may hinder achievement of expected results. Gross domestic products (GDP) growth and total employment used as indicators of a country’s economic development may be deceptive, as some economies are characterised by foreign capital domination, limited local backward and forward linkages, and locals are only employed in low skill and labour-intensive jobs. Tourism is viewed as an important sector especially in developing countries, due to a number of advantages and economic growth opportunities it offers. Tourism advantages includes: source of employment; potential linkage with other sectors; provides opportunities for off-farm diversification (particularly in areas that do not attract other types of development options); is a foreign exchange earner; generates demand for assets (e.g. natural resources and culture); creates initial demand for goods and services; delivers consumers to the product rather than the other way around; is associated with infrastructural development in remote places, and offers a relatively rapidly growing market (Roe, et al. 2004).

Tourism in Uganda is focused on Uganda’s landscape and wildlife. It is a major driver of employment, investment and foreign exchange, contributing 4.9 trillion Ugandan shillings (US$1.88 billion or €1.4 billion as of August 2013) to Uganda’s GDP in the financial year 2012-13. Tourism can be used to fight poverty in Uganda. There are the tourism companies which employ people directly as drivers, guides, secretaries, accountants etc. These companies sell products to tourist for example art and crafts, traditional attire. Tourism can also be operated online by the online based companies. Tourist attractions in Uganda include national game parks, game reserves, traditional sites, natural tropical forests. Traditional occasions like Mbalu in eastern Uganda, boat riding, waterfalls etc. (Mutagamba, 2013).

In the late 1960s, Uganda was visited by 100,000 international tourists each year. Tourism was the country’s fourth largest earner of foreign exchange. The tourist industry ended in the early 1970s because of political instability. By the late 1980s, Uganda’s political climate had stabilised and conditions were suitable for reinvestment in Uganda’s tourist industry (Lepp, 2002). However, the loss of charismatic wildlife in previously popular safari parks such as Murchison Falls National Park and Queen Elizabeth National Park prevented these parks from competing with similar tourist attractions in neighbouring Kenya and Tanzania. Uganda’s tourist industry instead promoted its tropical forests. The keystone of the new industry became Bwindi Impenetrable National Park. With more than 300 mountain gorillas, Bwindi Impenetrable National Park has approximately half of the world’s population of mountain gorillas (Lepp, 2002).

Mountain gorillas are Uganda’s prime tourist attraction (Woodroffe et al, 2005). In western Uganda, the vast majority of these are in Bwindi Impenetrable National Park, with a few others in Mgahinga National Park, (Hodd, 2002) both in south-western Uganda. In Bwindi, visitors have been allowed to view the mountain gorillas since April 1993. The development of gorilla tourism and the habituation of gorillas to humans is proceeding very carefully because of the dangers to gorillas, such as contracting human diseases (Hodd, 2002).

In Kasese municipality, tourism activities influence people’s social cultural activities, values, interests and social behaviour. Tourism is indispensably connected with leisure behaviours (Grzywacz, 2011), in Kasese there are numerous foreign tourism operators simply established camps or lodges in communal areas, and there are also several ecotourism which sustainably empowered individuals, households and communities, and ecotourism projects have been heavily dependent on local consultation (Cezayiri, 2004). Local communities in Kasese municipality are major stakeholders, as they are the custodian (wildlife reserve) or represent part of the tourism experience through the products they create based on their historical and cultural connection to locations. Although communities are perceived to be benefiting through employment (especially non-specialised jobs) and market opportunities for their produce, either handcrafts or agriculture, little is documented about such returns, or the employment opportunities for local communities within the chain, their numbers and levels of education, and the specific role they play compared to others from the cities. It’s upon this background that the researcher seeks to investigate the effect of tourism activities on the welfare of the people in Kasese Municipality, Kasese district.

1.2 Problem statement

Tourism contributes significantly to Uganda’s gross domestic product, provides significant investment opportunities and employment and is a major source of foreign currency. Activities in tourism are considered to be hotels and restaurants, and transport and communication (Afram and Del Poro 2012). The government has therefore recommended a number of interventions necessary for development of the sector, including: developing and reviewing all policies; creating a legal and regulatory framework for the sector; and increasing the contribution of tourism to GDP and employment (GoU, 2010). Despite the presence of the booming tourism activities, which are supposed to improve people’s livelihood, the welfare of the residents in Kasese municipality is still low, hence the need to investigate the effect of tourism activities on the welfare of the people in Kasese Municipality, Kasese district.

1.3 General objective of study

The study will investigate the effect of tourism activities on the welfare of the people in Kasese Municipality, Kasese district.

1.4 Specific objective of the study

• To determine the different tourism activities in Kasese Municipality
• To investigate the influence of tourism activities on the incomes of people in Kasese municipality
• To investigate the challenges faced by the tourism activities in Kasese municipality

1.5 Research Questions

• What are the different tourism activities in Kasese Municipality?
• What is the influence of tourism activities on the incomes of people in Kasese municipality?
• What challenges are faced by the tourism activities in Kasese municipality?

1.6 Scope of the Study

The study will investigate the effect of tourism activities on the welfare of the people. Main emphasis will put on identifying the different forms of tourism activities, the influence of tourism activities on the incomes and the challenges of tourism activities in Kasese municipality.

Geographical scope

The study will be carried out in Kasese municipality, Kasese district

Time scope

The study will be carried for a period of four month from February to May, 2017.

1.7 Significance of the study

The findings of this study will aid policy makers in the planning of strategic development programs for tourist destinations.

To the academicians it will be the base for further study. For academic purposes, this study serves to increase knowledgeto the already existing body of knowledge.

To the community in Kasese municipality, the findings will bring awareness to the community the existing tourism activities that they can benefit from.

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter presents related literature and it is presented in themes according to the research objectives.

2.1 Effect of tourism on income creation

One of the important economic features of the tourism industry is that an income earned in places of residence is spent in places “visited” (Holloway & Robinson, 1995). Tourism is an instrument in transferring a vast sum of money from “income generating” countries to “income receiving” countries. The money spent by tourist does tend to percolate through many levels.

Tourism as a source of income is not easy to measure at least with any degree of accuracy. However, the most common method for estimating the income generated from tourism is to determine the “multiplier effect” in a destination. The flow of money generated by tourists by tourist spending, multiples, as it passes through various segments of the economy. A tourist makes initial expenditures into the society, which is received as income by local tour operators, shopkeepers, hotels, taxi drivers etc (Barlett and Paul, 2006.).

Tourist expenditure represents an injection of ‘ new money ‘ into a destination (Frechtling 1987, Fletcher 1994a, Archer& Cooper 1995). The expenditure injection is regardedas having three types of impacts – direct, indirect and induced.

Tourism gives impetus to national income. International tourism and domestic tourism both have the same effect on the national income (Mill, 1990). Tourism has to pay for different types of services and goods in the host country. So tourism constitutes a demand for services and that of consumer goods.

According to Simoni&Mihai  (2012), the construction of accommodation, urbanization for tourist purpose, infrastructure installation, increased tourist transport and equipment etc. are the examples of how tourist transport encourages investment opportunities within the state. When tourists pay for goods and services in another country, these amounts are reflected as national travel receipts for such country.

The direct impacts are reflected in the increased sales revenues of firms catering to tourist needs for different goods and services. Some of these firms are within, and others are outside, what may be regarded as ‘the tourist industry’. These firms and organisations, in turn, purchasegoods and services from various suppliers within and outside of the destination region (Spanou, 2007).

Indirect effects result from ‘flow-ons’ when direct suppliers purchase inputs from other firms in the region which, in turn, purchase inputs from other firms and so on. Almost every industry in the economy is affected to some extent by the indirect effectsof the initial tourist expenditure.

Induced effects arise when the recipients of the direct and indirect expenditure – owners of firms and their employees – spend their increased incomes. This, in turn, sets off a process of successive rounds of purchases by intermediate firms, plus further consumption, adding to Gross Domestic Product and employment (Fletcher, 1994).

Given the indirect and induced effects of tourist expenditure, the ultimate increase in income within the destination may exceed the initial expenditure increase. Tourism economists have thus tended to focus upon the so called ‘multiplier effects’ of tourism expenditure (Batterburz. 2008).

Michael(2003) argues that the tourist industry expands output to meet additional demand by employing additional labour, land, capital plant and equipment. Some of these may be in limited supply eg particular labour skills or workers for particular shifts or locations. In the absence of offsetting productivity improvements price increases are necessary to attract resources into tourism, increasing industry costs, and making a destination less price competitive. The size of the cost increases depends on the supply of different factors, whether these factors account for a significant proportion of the tourist industry total production costs, and how quickly extra supplies can be made available.

A destination’s ability to increase the supply of goods and services required by tourists in response to an increase in inbound tourism, without offsetting increases in the costs of production, depends to a large extent on the characteristics of the industries which service tourist demands, such as retail services, hospitality; and transportation (Wanhill 1988, Sinclair 1998).

When an economy is at or near to full employment, the increased tourism demand imposes cost pressures as the price of scarce resources are bid up. If other industries employ the same resources they also face cost pressures resulting from the increased tourism demand. This may particularly affect trade-exposed sectors that face world prices for their products and hence are unable to pass on cost increases without losing market share. Any loss of marketshare by domestic producers means that the net gain to overall Gross Domestic Product and employment from further tourism will be lower. Also, location requirements can lead to rising land prices as the tourist industry attempts to attract land away from other uses (Tinsley and Lynch, 2001).

Almost all the developing countries are trapped in vicious circles of poverty with low per capital income and low national incomes. Tourism activities can reduce the poverty through the increase in national income, employment generation; foreign currency earnings, regional development, promotion of local handicrafts and many more (Mill & Morrison, 1992).

2.2 Effect of tourism activities on employment levels

Another major direct economic effect of tourism relates to employment (Inskeep, 1991). The unemployment impact of tourism is diffused widely over the economy affecting almost all parts of the services and other sectors.

The tourism industry is highly labor intensive service industry and hence, it is a valuable source of employment. It provides employment several times more than normal manufacturing industries. Several type of business firms such as hotels, motels, restaurants, transport agencies, travel agents, tour operators, gift shops, car and rickshaw drivers, guide etc. flourish from tourism (Van Laere and Heene, 2003).

According to Tinsley and Lynch (2001), it employs large number of people and provides a wide range of jobs, which are intended from unskilled to highly specialized one. Then, there are other supporting industries, small and large, which in turn, cater to the needs of tourism industries directly, or indirectly providing and supplying the requirement of the tourists. The following list ranks various businesses, with the highest employer at the top:Food service, Entertainment, Accommodation, Automobile transportations, Public transportations, Travel arrangers.

An expanding tourism industry will place additional pressure on the demand for various types of labour- skilled,semi-skilled and unskilled. The constraints are perhaps most evident, however, in the case of labour which hassome skills component.There is a limit to which the tourism industry can immediately meet its higher demand for skilled and semiskilledoccupations by attracting trained workers from other industries or from immigration. The retail andhospitality sectors are labour intensive with wages comprising the largest single cost item (Tinsley and Lynch, 2001).

In Australia around20% of the hospitality labour force is classified as skilled (eg. chefs, senior management), with 40% semi-skilled(Industry Commission). It is not important that levels of skill be precisely defined. It suffices to recognise thatdifferent sectors of the tourism industry have different labour requirements and that constraints on the availablesupply can impede development of any sub-sector. Because skills take time to acquire the wages for someoccupations would normally be bid up in the short term as tourism faces an excess demand for labour. Thusfirms and organisations competing for a fixed supply of inputs will compete against each other putting upwardpressure on wages.

The extent to which wage pressures on particular skills is translated into actual wage increases relative toother occupations depends on the wage setting environment. In many economies, the labour market ischaracterised by institutional rigidities that constrain wages awarded to government employees such as thoseemployed in the aviation sector. This limits its ability to attract additional skilled labour in the short term fromother industries, and in the long term through training. If relative wages are able to adjust in response to skillsshortages this would induce people to acquire skills, to immigrate to a country or region, stay in the industry orre-enter the industry (Hart, Doherty, & Ellis-Chadwick, 2000).

The expanding tourism industry will, in any case, put upward pressure on other costs and prices, feedingeventually into the Consumer Price Index (CPI) as a result of pressure for general wage increases to maintainreal wages. Thus if increased real wages spill over to other industries, they will impose a cost burden on theprofit margins of those industries. Unless these industries are willing to suffer reduced profitability, they willraise prices. This increases input prices generally, further reducing industry cost competitiveness. This will leadto a further contraction of output in non-tourist industries and Gross Domestic Product (GDP) growth will besmaller (Van Laere and Heene, 2003).

Over time, particular skills shortages in tourism may become less pronounced depending on the pace of skillsacquisition relative to industry growth and relative to prospects of factor substitution to economise on skills inshort supply. In the longer run labour of all types may be relatively scarce because of demographic constraints.The tourism industry will then face greater competition from other growing industries for the labour that isavailable (Van Laere and Heene, 2003).

2.3 Effect of tourism activities on entrepreneurship development

Tourism businesses have been identified as essential actors for creating jobs and generally growing the economy. Also here is attempt to identify the constructs that influence in building high-quality entrepreneurship in tourism industry. Entrepreneurship in tourism is considered a central force of economicdevelopment, as it generates growth and brings innovation and change (Lynch and Morrison, 2007).

Uganda has a wide range of natural and cultural features attractive to tourists,most of them in rural areas, and rural tourism development is now seen as a way ofcreating a new service industry as traditional manufacturing industries decline (Middleton& Clarke, 2001).

Increasing numbers of rural householders now offer bed and breakfastaccommodation to visitors, and entire rural communities now find themselves drawninto tourism as a potential economic future (Hart, 2003).

According to Spanou (2007), tourism enterprise develops in interaction with the environment. In orderto prevent impoverishment of resources, it is necessary to introduce in practicesustainable development and management principles. Sustainable development isconnected with preservation of nature resources and other values of nature andusage of resources. Sustainable rural tourism can be characterized as balanceddevelopment of entrepreneurship and regulation of the stream of tourists, taking intoconsideration local resources, the capacity of environment and the level ofdevelopment of infrastructure.

(Hart, 2003), it is important to identify the specific factors that influence success in small tourism businesses which were aforementioned. The relationships between entrepreneurial leadership, market orientation and marketing orientation could be explored with their common elements – the skills and characteristics of the owner-manager, owner manager knowledge and alliances. These elements of entrepreneurship on one hand, and innovation orientation on other hand, are positively linked to various measures of organizational performance. In this context, many studies suggest that the performance of a small tourism enterprise could be determined by the personality of its entrepreneur.

New small tourism businesses contribute to the flourishing of entrepreneurship as important catalysts or actors in technological innovations; as agents of change in market structure and competition environment and as critical forces in industrial restructuring and national competitive advantage upgrading (Hart, 2003).

2.4 Conclusion

Tourism is one of the dynamic economic activities in creating socio – economic changes across the world which has been increasingly important.For many developing countries tourism is one of fundamental pillars of their development process because it is one of the dominant activities in the economy, while for others, particularly by islands and some small economies, it is the only source of foreign currency and employment, and therefore constitutes the platform for their economic development (Spanou, 2007).

CHAPTER THREE

METHODOLOGY

3.0 Introduction

This chapter presents the research design, area of the study, study population, sample size, sampling techniques, the data collection instruments, the procedures of data collection, ethical considerations, quality control, validity of research instruments, reliability of the study, data processed, presentation and data analysis and limitations of the study.

3.1 Research Design

The research design will be descriptive in nature where both qualitative and quantitative approaches of data collection will be adopted. Qualitative research design helps to capture qualitative data, based on qualitative aspects that cannot be quantified. It aids in discovering the motives and desires or what people think and how they feel about a given subject or situation. Qualitative approach will be used to develop sub themes to back up the quantitative data. A quantitative approach of data collection will be used for this study. Quantitative research is the systematic empirical investigation of observable phenomena via statistical, mathematical or computational techniques.

3.2 Area of study

The study will be carried out in Kasese municipality, Kasese district

3.3 Population of the Study

Population constitutes people-individuals, organizations, groups, communities or other units that provide information or to collect information about for the study. This will includeresidents of Kasese municipality.

3.4 The Sample Size

The sample refers to a few items selected from the universe or population for study purposes, (Baron, 2011). The study used a total of 60 respondents and will be regarded representative of the study population and to provide a manageable volume of data and allow the researcher to make accurate estimates of thoughts and behavior of a larger population.

3.5 Sampling techniques

Purposive Sampling involves deliberate selection of particular units of the population for constituting a representative sample. The researcher will use purposive sampling because researcher will choose the sample based on who she thought would be appropriate for the study.

3.6 Data source

3.6.1 Primary sources

Primary data will be used to provide information to answer the study objectives. Primary data will be collected from the thirty selected sample respondents by use of questionnaires designed to answer the research questions of the study.

3.6.2 Secondary sources

The secondary data will be used to supplement on the primary data. The secondary data will be collected from Library, research reports, journals, articles inform of literature review which provided information related to the study.

3.7 Data Collection Instruments

The study will involve the following instruments;

3.7.1 Questionnaires

Questionnaires will be used to collect data from key informants mainly because they can read and write, it would not interfere with their busy schedules and can answer at their convenient time. The questions will be constructed in simple English that can easily be interpreted. The questionnaire consisted of four sections; Section A will be contain background information of respondents, section B will be asking the first objective, section C asked questions concerning the second objective and section D asked questions concerning the third objective of the study.

3.8 Procedures of Data Collection

Before data collection, the researcher will ensure the approval of the research instruments especially the interview guide; obtained the introductory letter from the university; introduce herself to the authorities, seek participants’ consent and make appointments when to meet them for interviews and data collection, and the data collected will beanalysed.

3.9 Ethical Considerations

The researcher will collect data upon seeking respondents’ consent after revealing the type of information needed and the purpose to avoid potential concealment of vital information.

The researcher also willmaintainconfidentiality of respondents’ information; and will report the true findings of the study without any bias.

3.10 Quality Control

The quality of the research design that will be checked by considering the validity of the study, reliability of the data and instruments of data collection as well as the generalization ability of the study are described below.

3.10.1 Validity of research instruments

The researcher will administer the interview guides on a small group of respondents to examine the effectiveness, relevance and appropriateness of the language to be used. The questions will be posed using pilot testing methods to test for validity. Adjustments and corrections are to be made by the supervisor before the questionnaire is finally administered to the rest of the respondents.

3.10.2 Reliability of the Study

The aim of any research is to use a given procedure and reach a conclusion that will be applicable in any given environment (Lehmann, 2009). The primary objective should be that if a later investigation followed exactly the same procedures as described by an earlier investigator and conducted the same study all over again; this later investigator should be able to arrive at the same results and conclusions. Thus the study is considered to be highly reliable. However, due to the very nature of human beings 100% reliability cannot be considered for this study, as individual perceptions are central in this study. In other words because we are different as individuals and that our individual wants and preferences are different, future investigations may not produce exactly the same results as reported in this thesis.

3.11 Data Processing, Presentation and Analysis

After collecting and cleaning the data it will be entered in a computer using Ms-excel. Quantitative data will be analyzed to give percentages, and statistical figures.

3.12 Limitations of the study

1. The time allowed to do this research may not be enough to allow exhaustive study and obtain all the essential information for much more suitable conclusions. The problem will be minimized by putting much effort on this research so as to meet the deadline.
2. The Researcher will be limited by financial resources such as the transport costs and stationery to carry out her research effectively. In an effort to mitigate this shortcoming, the researcher will sourcefor funds from a few sponsors.

• Slow or non- response:Since the researcher does not know the kind of respondents to deal with, some of them may fail to respond or delay to do so. The researcher made convenient appointments with the respondents and encourages them to respond and give true information in time.

1. High expectations from the respondents in exchange of information. To overcome this, the researcher will make sure that the respondents provide information voluntarily and willingly.

QUESTIONNAIRE FOR RESIDENTS

I am Muhindo Mugisha Maureen, a third year student pursuing Bachelor degree of Arts in Economics at Kyambogo University. This questionnaire is designed to investigate the effect of tourism activities on the welfare of the people in Kasese municipality, Kasese district. The information that you will give will be used for academic purpose only. I therefore kindly request you to give your honest opinion.

Instruction: Tick appropriate option and fill in where required

SECTION A: Background Information                                  

Please write or tick accordingly

1. What is your sex?

Male                          Female

2. Which one is your age bracket?

(20-25)                                    (26-30)                        (31-40)             (40 and above)

3. What is your highest level of education?

Certificate                                    Diploma                     Degree                         Masters

Others specify…………………………

SECTION B: DIFFERENT TOURISM ACTIVITIES

4. The following are stages of tourism development from beginning, growth, and maturity to end. How do you rate the tourism development in your community?

[1] Beginning stage                                                     [2] Growth stage

[3] Maturity stage                                                       [4] Decline stage

5. What are some of the tourism activities in this area?

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

SECTION C: INFLUENCE OF TOURISM ACTIVITIES ON THE INCOMES OF PEOPLE

6. How do you benefit from the tourist activities?
7. Local businesses benefit the most from tourists.
8. Tourism brings more investment to the community’s economy.
9. Tourism helps national governments generate foreign exchange earnings.
10. Tourism generates tax revenues for local governments.
11. How has your standard of living improved as a result of tourism activities in this area?
12. Our standard of living has increased due to tourist spending
13. Tax revenues from tourism are used to improve roads, highways, and public services
14. Tourism helps improve the economic situation for many residents
15. How has the increase in the cost of living as a result of tourism activities affected your income?
16. The price of many goods and services in the community has increased significantly because of tourism.
17. Real estate prices in the community have increased because of tourism.
18. The cost of living in the community has increased because of tourism.
19. In your opinion, what is the influence of tourism activities on income of people in Kasese municipality?

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

SECTION D:  THE CHALLENGES FACED BY THE TOURISM ACTIVITIES

10. What challenges do your encounter as a result of tourism activities in this area?

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

THANK YOU FOR YOUR TIME

Interview guide for residents

1. The following are stages of tourism development from beginning, growth, and maturity to end. How do you rate the tourism development in your community?
2. How do you benefit from the tourist activities?
3. How has your standard of living improved as a result of tourism activities in this area?
4. How has the increase in the cost of living as a result of tourism activities affected your income?
5. In your opinion, what is the influence of tourism activities on income of people in Kasese municipality?
6. What challenges do your encounter as a result of tourism activities in this area?

THANK YOU FOR YOUR TIME