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Regional Tourism And Its Economic Development Links For Small Communities

1Peter Murphy and 2Ann Murphy

1School of Tourism and Hospitality, La Trobe University, Bundoora, Victoria 3083, Australia
Planning Manager, Marathon, Florida 33050, U.S.A


Around the world small rural communities are struggling to survive as the pressures of globalisation and demographic trends challenge their traditional functions and attractions. Increasingly many of these communities are turning to tourism to provide an alternative economic base and to help maintain their attractiveness as places to live. But what is tourism’s record as the “white knight” of regional and rural development? The purpose of this paper is to examine the potential and record of tourism as a development agent around the world, based on the authors’ experience in the U.K., Canada, and the U.S.A.

Tourism’s Potential

At first glance tourism has tremendous potential to provide an alternative economic base for rural areas. Even as the global economy unfolds with a concentration of wealth and economic activity in certain nations and a general feeling by those swept up in its path of being cash rich but time poor, various writers have clearly postulated a position in this process for rural areas. The economist Christaller predicted in the 1960s that even as the flow of cash and people seemed to be moving steadily toward the primary cities of the world, there was an economic necessity to provide a return flow to the peripheral regional and rural economies. Otherwise the whole economic system would implode. Christaller (1964) recommended that tourism be viewed as a principal agent for such a reverse flow of people and money. He approached this as a typical economist. He noted on the demand side that stressed city dwellers would be looking for rest and relaxation in a different type of environment; while on the supply side rural hinterlands offered the tranquillity and recreation opportunities that many of them would be seeking.

Others have supported such a notion and outlined the opportunities that exist in areas as diverse as the retirement market, second homes, recreation-based resorts, national parks, cultural-heritage attractions. As the populations of advanced economies age, many of the retirees are tempted to old seaside resorts or the country (Karn, 1977). They are tempted by resort reputations, memories of previous visits, less expensive housing and less stressful lifestyles. Often as a prelude to retirement is the purchase of a second home (Coppock, 1977), where the urbanites are tempted to invest in a holiday home away from the big cities. Such a process is now encouraged by the real estate and construction industries in the form of time-share or resort unit developments.

The attraction of the countryside can be seen in the direct tourism investment in planned recreational resorts. Australia has seen its share of the rural resort complex development, especially in Queensland and the alpine regions. This is a worldwide phenomenon and has been encouraged as a stimulus to regional development (Hall et al, 1997). The general attraction of the rural – wilderness environment has led to indirect tourist investment in such forms as national and regional parks. Very often the original or major purpose of these parks is conservation, but it soon becomes apparent that certain parks have major tourism appeal which leads to tourism investment either inside the park or on its margins and high visitation rates.

As the world rushes headlong into the new millennium and its global economy there is a growing sentiment that we need to conserve and cherish parts of our heritage so that all is not forgotten. Since most of our history relates to pre-industrial times and many significant events and structures are to be found in country areas, this has become another focus of rural tourism. Such a sentiment is particularly strong in those regions of the world with substantial records of settlement and history, like Europe and Asia. But even in relatively new western societies, like North America and Australia, the significance of indigenous peoples and pioneer explorers and settlers is gaining increased recognition as a heritage tourism resource.

Associated with these expressions of tourism interest in regional and rural tourism are the twin appeals of economic and amenity development for small rural communities. The major economic appeal is the employment that a labour intensive industry like tourism will generate, both directly through its principal sectors of accommodation, attractions, food and beverage and transport and indirectly through support sectors like retail and local service and produce providers. Tourism’s direct labour needs often appeal to young and female workers, which frequently complements the existing male dominated labour needs of the traditional primary industries in country areas. The tourists’ expectation of amenities, like attractive streetscapes, parks, restaurants, toilets, conference centres, and parking can add to the general quality of life for local residents. Increasingly small communities with a limited tax base are exploring ways to develop facilities that can serve a dual function of catering to tourist and resident needs. For example, Victoria, British Columbia’s community icerink needs to be replaced and the plan is to do so with a new building that encompasses an icerink and a conference centre, so the icerink space can be used for trade fairs during major conferences.

Tourism’s Record

Given the substantial development potential for regional-rural tourism outlined above why has not every rural community embraced tourism? One reason is that tourism, like all other forms of economic activity, has its drawbacks as well as benefits. Another is that rural areas or communities are not created equal in the eyes of the industry, so some rural areas will find it easier to attract visitors and tourism investment than others.

The experience with tourism development over the past fifty years has revealed it can be a two-edged sword, so more communities are approaching a commitment to this industry with caution and some are deciding the costs outweigh the advantages. Although tourism is an export industry in the economic sense, bringing in welcome outside/new revenue; this is one industry where customers insist on accompanying their money. The result, if one is successful, is a destination being swamped with visitors who will change, both consciously and unconsciously, the style and feel of the host community (Murphy, 1985). Therefore, communities must accept tourism as an agent of change and should determine just how much change they are willing to accept (Stankey, et al.,1985)

Even when a community is keen to embrace tourism it soon learns it is entering a very competitive market, and that in order to prosper it will need to distinguish itself in a variety of ways. One of the best approaches to this dilemma is outlined in Porter’s “competitive advantage strategies” (Porter, 1985). If a community fails to have a tourism resource that is unique, such as Pisa’s leaning tower, which by the definition of unique is likely to be the case, it enters the realm of generic attractions and the intense competition to draw visitors to its doors. As most destinations are in that situation they need to stress their distinctiveness and cost advantages according to Porter. What makes all communities distinctive is their own geography and history, but whether that is significantly different or spectacular compared to neighbouring or competitive communities requires an honest assessment, and one through objective eyes. Cost advantage is often associated with lowest cost in manufacturing, but in reality it should be linked to value, which combines price with quality (Chang and Wildt, 1994). In a service industry like tourism it is should be linked also with attitude and training, which is where our education program at La Trobe University enters the picture.

In considering their “distinctive” tourism appeal rural destinations need to be realistic about their tourism resources and competitive position. Even when they develop their heritage or environmental potential it is unlikely that they will have a critical mass of attractions to hold the visitor overnight. A good example of this is Chemainus, British Columbia. It is an old forestry town that has seen its logging dwindle and its mill downsized and automated. It became known as the “town that could” become reborn through tourism, by creating murals that depicted its logging history; and it is certainly a bustling tourism community during the summer as busload after busload of tourists come to see the murals. But at the end of the day, and certainly at the end of the financial year, Chemainus does not have much to show for all this activity! The reason is that most visitors have stayed only an hour or so, and have not stayed overnight or eaten major meals in the community – which is where the majority of tourism income is generated.

When a community considers its tourism appeal it should not simply examine its internal resources, for it is but one option in a network of choices so it must assess its position in relation to competitors and routes. Regional and rural tourism involves extensive travel from major cities and gateways, most often by car, which means multiple choices on the part of the tourist. It is important to determine where the major tourist traffic flows occur and how a community or business can take advantage of this passing trade.

For instance, when Walt Disney was looking for a site for his second theme park he looked for a rural area, because of the need for so much land, and one which had good links with existing tourism flows. He and his research team found Orlando, Florida. This was an inland area, away from the honeypots of the coastal resorts, yet well placed with respect to the interstate highway system to “intercept” a substantial portion of the traffic heading south to those resorts. As a result of such prudential location analysis, the Disney company was able to purchase 27,000 acres for its eventual Disney World complex at an average price of under $200 per acre (Zehnder, 1975, Eisner, 1998).


From the short, and far from complete, review of regional tourism potential and reality outlined above it becomes clear that regional tourism will not automatically embrace a rural community, and if a community desires to become involved in this industry it must prepare for a changed lifestyle and undertake a management approach to its planning and development.

First, rural areas should consider the regional market and examine the demand characteristics of actual and potential visitors. Too often tourism planners and businesses assume the characteristics and priorities of tourists are generic across all realms, but research and experience are beginning to indicate a distinctive rural submarket exists. Work by Murphy and Williams (1999) shows there are significant differences in the demographic, attitudinal and behavioural characteristics of potential Japanese “rural” travellers compared to their non-rural counterparts. Their work in Canada reveals the rural subgroup of this desirable tourism segment “perceive themselves as more adventuresome than their non-rural counterparts” and they “seek opportunities in rural communities to purchase or sample ‘meibutsu’ (local specialities) such as food or craft items”. The study concludes:

that opportunities to attract Japanese ‘rural’ travellers appear to be quite promising. These tourists, many of whom are from higher income households, have a strong appreciation for rural attributes, such as spectacular scenery and interesting small towns.
(Murphy and Williams, 1999:49-50)

Similar types of research need to be conducted by regions throughout the world to ascertain what their actual and potential visitors are looking for, before committing investments into tourism infrastructure and activities.

Tourism is an agent of change, if a community adopts tourism as one of its economic activities it must be prepared to act like a host and put certain features on show, while leaving others as “sacred” to the local community. It is the sociologists who have brought the idea of tourism related stress to the fore, and emphasised the need to manage these pressures from an individual and community perspective. As we demonstrate to our students there are ways you can maintain a pleasant and cooperative demeanour, day-in and day-out, and even on weekends and public holidays – but it requires training and management. For the community it requires a decision as to what to put on stage and how much authenticity can be achieved without disrupting local life (Cohen, 1979; Hinch, 1998).

It is my experience that most tourists like to visit real and alive communities, and to achieve this atmosphere a destination’s tourism ideally should be complementary rather than dominant. In the rural context we have seen how one submarket – the Japanese rural traveller likes to see interesting towns and buy local produce. This means there has to be an active rural economy in the first place to draw visitors to a region. An economy that creates the expected atmosphere of country scenes like grazing animals, stone walls, or active forestry. An economy that provides the basic activity for local towns like their markets, pubs, and community halls. Our part of Australia is moving along this path beautifully with its wine tourism initiatives, but there are also other opportunities out there.

One of the features that makes tourism an ideal supplement to existing rural economies is not just its service focus and different labour needs, but its seasonality. Seasonality is often considered a curse of the industry, but what is often overlooked is its capacity to provide a rest for local residents and the host environment. However, it can become a benefit where the tourism high season coincides with downturns in other local activities, such as the forestry operations in British Columbia due to the fire danger, or its low season coincides with the gathering of the harvest. Seasonality also brings different types of visitors and therefore different opportunities to host communities (Murphy and Pritchard, 1997).

Given the difficulties and various options associated with implementing tourism’s potential in rural regions it becomes evident that some form of strategic planning and management is required. To date most regional tourism planning has focused on the preparation or planning phase, and not on the actual operation process (Gunn, 1997). This paper suggests that the experiences outlined above call for a more complete management process and more committed community approach to regional tourism. The management process is commonly viewed as a four step procedure that involves planning, organising, leading and controlling to attain the company or organisation goals (Stoner, et al., 1995). The remainder of this paper will examine these four steps in relation to the future of regional tourism development.

Management Process

The first step in any enterprise, including tourism as a community venture, is planning. This involves establishing a community’s tourism goals and outlining a suitable course of action for achieving those goals. To achieve this a community must bring together its various stakeholder groups to determine if there is consensus to enter this business, what type of tourism image and product they would like to develop for their community, and how they wished to control it.

Unfortunately, examples of the fundamental first stage of community goal formation are rare, but where they have been reported they generally relate to small rural communities which would indicate such a process may be easier at that scale. (Jordan, 1980; Moser and Peterson, 1981; Murphy, 1985). Even some well-established rural tourism destinations have only recently started to survey their residents concerning their views and priorities with respect to local tourism development. After being the subject of some adverse publicity over its tourism volumes and direction the Florida Keys has just completed a major survey of its residents that reveals concern over tourism’s impacts and a desire to exert greater control over its future growth (

Academics and planners are trying to enhance the prospects of community goal formation through processes whereby different community stakeholders can be brought together in a meaningful way to air their views on future development and work out a common development strategy. The “round table” planning strategy incorporates this approach, and has been used with some success in Canada. A component of this and other approaches is the nominal group technique that facilitates the positive exposure of individual ideas, leads to a group assessment of those ideas, and a final quantitative ranking of the group’s preferences (Ritchie, 1994).

With a general consensus regarding the goals a community wishes to pursue, the next step is to select a suitable plan of action. In the past much tourism planning has been top - down, but increasingly there is more opportunity being given to local communities to have their say, especially as they operate as the coalface in this industry. Aspects that are receiving increased attention at this stage are issues such as image, competitive advantage, carrying capacity, authenticity and staging, staggered development and stress.

Once a community is committed to developing tourism it needs to organise its development and delivery of the tourism product, in a structured way that permits people to work together to achieve the specific set of community goals. The general approach to this has been the development of a local destination tourism association that crosses all sectors and promotes the destination as a whole. The emphasis is generally on marketing, since this is one industry where most agree you need “to sell the destination first and individual businesses second”. However, community based destination associations are often broader than marketing and promotion, in recognition that their industry is uniquely tied to the local community and its quality of life.

A prime example of a successful community based destination association in Canada is Tourism Victoria, which is responsible for the marketing and development of tourism in British Columbia’s capital city region of Victoria, on Vancouver Island. This association grew out of a nominal group workshop, where 65 different groups were claiming a say in the tourism planning and development of the city. From that workshop arose the concept and model of an umbrella organisation, which though marketing focused would respond to and lead community concerns (Murphy, 1985).

I am happy to report that in its fifteen years of existence it has gone from strength to strength and more than met its initial objectives. Not only have Tourism Victoria’s efforts regularly contributed to Victoria’s rating in the top twenty world destinations by readers of Conde Naste Traveller magazine; it has led the charge to improve local sewerage treatment, develop local festivals and events, create a detailed and long term data base, and joined the fight for better environmental management of the province’s forests.

Tourism Victoria manages to be a community oriented association because it has developed a committee structure that ensures a broad participation. Indeed, when I was serving on the executive board there were as many “community” members, such as myself, as industry representatives. Although we brought to that forum our own pet projects and peeves the structure always made sure that the over-riding influence was the community good. An example of this thought process in action was the contribution of Paul Miller who owned and ran the local water bus system in and around Victoria’s harbour. Paul’s fleet of five boats puts on a weekly water ballet to the delight of his customers and the community at large (Murphy, 2000).

The process of directing and influencing the activities of a wide range of stakeholders at the community level requires leadership. Those communities that have been successful in the development of their tourism potential often owe it to the foresight and tenacity of an individual. The story of Chemainus is really the idea of one man, Karl Schultz, who had the vision and convinced local shopkeepers and council that murals would be an ideal way to present the town’s past glories and attract visitors to their small community. Karl and the community are well aware of the resulting day tripper shortcomings and are trying to increase the town’s attraction appeal and with it the need to stay overnight. The community is doing this with the development of a theatre and a planned artisans’ village.

Since Melbourne is due to host the 2006 Commonwealth Games it is appropriate to discuss Victoria, British Columbia’s leadership experience with its 1994 Games. These were the inspiration, essentially, of one man – a local newspaper publisher by the name of David Black. In the early 1990s Victoria was going through a recession and the community, in David’s eyes, needed something to pick up its spirits and something that would encourage various levels of government not to overlook this small provincial capital. He pulled together a team of business people and local politicians, who first of all won a national bid competition and then the international competition, beating Cardiff and New Dehli. The Games certainly put the city of Victoria on the map and the infrastructure developments help the city to offer a higher quality of life today.

To ensure that the association’s actual activities conform to the planned goals and procedures requires a constant monitoring of performance and corrective action if targets are not met or circumstances change. This controlling function is ongoing and is the basic difference between the management concept for tourism being advocated here and the traditional planning approach which generally calls for periodic (5 year) reviews.

Tourism is a sensitive business, susceptible not only to the seasons but to external forces beyond its control such as currency fluctuations, terrorism, politics, and local environmental disasters like droughts, floods, and fire (Murphy and Bayley, 1989). As such its progress needs continuous monitoring to ensure it is providing sufficient business for an acceptable return on investment. One of the controlling functions used by the tourism industry to monitor and adjust to changing conditions is yield management, a process that started in the airline industry and has now spread to many other sectors of tourism.

If the industry is successful it needs another form of monitoring and control, involving environmental audits and carrying capacity management. While it may be true that many tourists leave only footprints, too many footprints can lead to environmental destruction, especially in fragile and sensitive areas like alpine meadows and dune landscapes. Even tourists’ breath and body heat can wreck havoc with ancient paintings. Unfortunately, too many tourists leave their mark in more obvious and destructive ways, such as with litter, pollution and vandalism. Hence, there is a need to balance tourism’s effect on the environment, both physical and human, and to channel development to more “hardened” sites like footpaths or downtown areas which have parking and other amenities; or to cap the number of tourists to match local carrying capacity.

Saying “no entry” is a viable option in some cases, and does not necessarily mean a non-tourism strategy. For example, the small fishing village of St. Ives in Cornwall has to ban visitor traffic in its congested harbour area during summer months or see itself seize up with humanity. But no one likes to turn away business, so they get day visitors to leave their cars on the outskirts and either walk or take a shuttle bus into the village centre. To get people out of their cars is real “control”.


The purpose of this paper is to encourage small rural communities to consider tourism as an agent of economic development, but to do so in a cautious manner because it is also an agent of change. The potential for economic expansion through tourism certainly exists for some communities, but not for all. It has become a very crowded and competitive industry, where the tourist consumers have become more sophisticated and demanding over time. If a community is to enter such an industry it needs to do so with its eyes open, for to serve such consumers means changing to some extent a community’s regular routine and pattern of life. Just as when we have houseguests, many of us go on a cleaning blitz and ask the family to be on its best behaviour.

What is recommended is that rural communities, singly or as regions, honestly appraise what tourism resources they have to offer that would make them appealing in today’s competitive market. Furthermore, they should consider how much they are prepared to change their community and lifestyle to accommodate the visitor.

Assuming a community or region has made the decision to become involved with tourism it needs to commit to a management strategy if it wishes to maximise its benefits and minimise its costs. This does not mean a bottom-line dollar assessment must rule every decision, but when the four principles of management are applied it means the business perspective for both individuals and the community alike must be taken into account. Today we are teaching our students that one of the principle guidelines in this process should be sustainable development, whereby something is left for future generations while providing a living for the present population. But the process is a complex one, which also requires an understanding of service quality and financial management. In other words a rounded appreciation of what we call “tourism management” at La Trobe University.


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