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Tourism, Leisure and Global Change, volume 2 (2015), p.TOC-57

Socio-Economic Impacts on Local Community through Tourism
Development with Special Reference to Heritance Kandalama
Geethika Nayomia, W.K. Athula Gnanapalab
a. Undergraduate, Dept. of Tourism Management,
Sabaragamuwa University of Sri Lanka, P.O. Box 02, Belihuloya, Sri Lanka. [email protected]
b. Senior Lecturer, Dept. of Tourism Management
Sabaragamuwa University of Sri Lanka, P.O. Box 02, Belihuloya, Sri Lanka. [email protected] (Corresponding Author)

Tourism is considered as one of the largest and fastest developing sectors of the world. Its high growth and development rates bring considerable volumes of foreign currency inflows, infrastructure development, employment generation, regional development, economic multiplier effects and introduction of new management and educational experience actively affect various sectors of economy, which will be positively affected to the social and economic development of the country. However the industry also generates a number of other negative socio- economic and cultural impacts on local communities. Therefore, the study considers the main social and economic impacts on local community trough tourism development in Kandalama area of Sri Lanka. Heritance Kandalama, a star class hotel, commenced its operations in 1994 beside the Kandalama Lake in a picturesque environment. During the construction stage there were many protests against the hotel and may parties claimed that the hotel will pollute the natural and the socio-cultural environment in the area. Finally, the company built an award winning environmental friendly hotel and introduced many programs to deliver benefits to the local community through their CSR activities. The study mainly target to identify the social and economic impacts on local community and their perception towards the tourism development in the neighborhood. The study is adapted the mixed methodology and the data is generated through structured questionnaire survey, personal interviews and discussions. The study identified that community has developed positive attitudes about the tourism development and the community is accepted tourism as a major income source through active and passive participations. The hotel also has taken numerous policy decisions and practices to ensure the delivery of benefits of tourism to the local community. As usually the industry has generated both positive and negative impacts in the area. However, the negative impacts are at a minimum level when compare with the positive impacts. It is suggested that to have more community awareness and education programs in order to obtain positive benefits and to minimize the negative impacts of tourism. Community empowerment and their capacity building is highly important in this context.

Key Words: Tourism Development; Socio-economic Impacts; Community Perception; Sustainable Tourism Development

Papers from the 7th Tourism Outlook Conference/Tropical Tourism Outlook Conference, 8-10 August 2014, Dambulla - Kandalama, Sri Lanka (Copyright: CC-BY-NC-ND)

Tourism, Leisure and Global Change, volume 2 (2015), p.TOC-58

Tourism is considered as one of the largest and fastest developing sectors of the world and its high growth and development rates, considerable volumes of foreign currency inflows, infrastructure development, and introduction of new management and educational experience actively affect various sectors of economy, which will be positively affect to the social and economic development of the country (Mirbabayev & Sagazatova, 2005). As an example most highly developed western countries, such as Switzerland, Austria, and France have accumulated a big deal of their social and economic welfare on profits from tourism ((Mirbabayev & Sagazatova, 2005). According to (Mirbabayev & Sagazatova (2006) tourism provides about 10% of the world’s income and employs almost one out of tenth of the world’s workforce. Many people emphasize the positive aspects of tourism as a source of foreign exchange, a way to balance foreign trade, an “industry without chimney”. But there are also a number of other positive and negative sides of tourism’s economic impacts on local communities.

In this context economic and social impacts on the local community depend on how much of the incomes generated by tourists go to the host communities. Most of all-inclusive package tours more than 80% of travelers’ fees go to the airlines, hotels and other international companies, not to local businessmen and workers. On the other hand large hotel chain restaurants often import food to satisfy foreign visitors and rarely employ local staff for senior management positions (Robinson, 1999). Tourism has the power to affect cultural changes. Tourism often grows into mass-tourism. It leads to the over consumption, pollution, and lack of resources. However, from the ecological point of view tourism is environmentally friendlier than any other industrial production (Mirbabayev & Shagazatova, 2005).

Heritance Kandalama commenced operations in 1994 among the type of argument that usually surrounds modern architecture and infrastructure in many parts of the world. It was, after all, situated near an irrigation reservoir that was a valuable resource for thousands of farmers in nearby villages and it was situated in the heart of the Cultural Triangle. When the hotel Heritance Kandalama is going to be established, the villagers have rejected it thoroughly. That is because of the ability of damaging the sensitive natural environment and the lake Kandalama. But finally, the Kandalama was built in a sustainable architecture that is not to harm the natural environment. There were also many protests from Buddhist monks who feared that a hotel springing up in a village environment would negatively impact the rural community. Its management, recognize of these issues, took steps to address them and work with the monks as well as the villagers, to build relationships that have helped Aitken Spence to operate this award-winning resort in a sustainable manner. So the hotel Kandalama has achieved a huge success up to now. It has taken so many certificates and awards by attracting the eye of the whole world, while keeping and improving the quality in a sustainable manner.

According to the company records and reports hotel has actively support religious institutions, schools, community development work and conduct a number of social activities. Just to give an idea of hotel CSR investments. Researcher has listed below projects carried out for the last period (Figure 1). From 1992 to up to now (April, 2014), hotel has done around Rs.46 million investments on the Corporate Social Responsibility (CSR) activities. Hotel’s Community Development Fund helps the local communities in a number of ways. And also the HR practice like 55 % of hotel staffs were recruited 25 Kms radian from the hotel. On the other hand employee personality development and organization standards such as eco-friendliness, sustainability concepts are directly influence to the locals. But, hotel has not investigated the overall social and economic impacts to the society through hotel’s operation.

Papers from the 7th Tourism Outlook Conference/Tropical Tourism Outlook Conference, 8-10 August 2014, Dambulla - Kandalama, Sri Lanka (Copyright: CC-BY-NC-ND)

Tourism, Leisure and Global Change, volume 2 (2015), p.TOC-59

CSR Expenditure- Heritance Kandalama (2000- 2014)

Figure 1: CSR Expenditure- Heritance Kandalama (2000- 2014)
Source: (Sustainability Stewardship: CSR projects undertaken– Heritance Kandalama, 1992-2014)

The study is going to investigate whether the community has received socio-economic benefits though tourism development in their neighborhood and the research problem is defined as ‘what are the socio-economic impacts on local community through tourism development with special reference to Heritance Kandalama?’. The problem is to address through the following research objectives; first to identify the major social and economic impacts on local community through tourism development in Kandalama area, second to identify the community perception on tourism development in their neighborhood, third to identify the socio-economic contribution to the local community through Heritance Kandalama.

Literature review
“Tourism comprises the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited” (UNWTO, 2000). Tourism industry does not have a single entity but it is the combination of different sectors including primary suppliers like attraction of the destination, transportation industry (air, water and surface), hospitality industry (hotels, restaurant etc.), tour operators, travel agents, banking, insurance, shopping and entertainment. In the case of secondary suppliers, it involves the suppliers of primary suppliers. e.g. a hotel required supply of vegetables, fruit and other items in order to provides its services further, therefore fruits and vegetable suppliers are the secondary suppliers of the tourism industry as suppliers to primary suppliers (WTTC, 2011).

The academics and researchers are voicing that it is necessary to have a sustainable tourism development in order to get the expected benefits. Sustainable tourism development requires the informed participation of all relevant stakeholders, as well as strong political leadership to ensure wide participation and consensus building. Achieving sustainable tourism is a continuous process and it requires constant monitoring of impacts, introducing the necessary preventive and/or...

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