The Socio-Economic Impact of Tourism in Luang Prabang, Lao PDR.: The Resident Perspective

8/9/2019 The Socio-Economic Impact of Tourism in Luang Prabang, Lao PDR.: The Resident Perspective

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National and International Conference on Administration and Management

January 30, 2015, KU Home, Bangkok, THAILAND

The Socio-Economic Impact of Tourism in Luang Prabang, Lao PDR:

The Resident Perspective

Kongfa Phoummasak *, Dr.Xayphone Kongmanila

** and Dr.Zhou Changchun

***

Abstract

Since Luang Prabang town, (LPB) Laos has been listed as World Heritage Site since 1995, the tourists

have come to visit LPB yearly with a remarkable increase. The residents recognize the significant positiveeconomic impacts like increased investments, employment, earning opportunities, women empowerment,

and participation in education and in service sector.

Our study focuses on the resident perspective against the socio-economic impact of tourism in LPB,

by conducting the field survey of 100 residents who involved of tourism sites in 2012.

Descriptive statistics are used to analyze the data from field survey. The results of this study illustrate that

some negative social impacts are underlined by displacement of poor local residents from their land,

increased social gap, loss of cultural, traditional originality, the higher price of goods, services, the land price

and rent, increased income disparity, polarized group.

A frustrating finding is that majority of the tourism assets and well-paid jobs are enjoyed by non-

locals whereas the local residents do not enjoy their rightful share due to uneven benefit distribution.

Keywords: Resident Perspective, Socio-Economic Change, Polarization

Introduction

Tourism has the most important role in socio-economic development in developing countries,

particularly in Lao PDR and it is a fast growing industry and a valuable sector which contributes significantly to

the economy for the LPB residents. The benefits of tourism include both tangible (e.g. job creation, state and

* Ph.D. Student, Faculty of Economics and Business Management, National University of Laos

** Faculty of Economics a nd Business Management, National University of Laos

*** Kunming University of Science and Technology


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local tax revenue, etc.) and less tangible (e.g. social structure, quality-of-life, etc.). In addition, tourism can,

and often does, result in less desirable effects on the socio-economic (Aref and Redzuan, 2009).

The main resident perspective found that the tourism development enhanced a profit, a wealth-

creating and wealth-producing organ of LPB community. It has to consider whether or not the tourism action

is likely to promote the public goods and to contribute to its stability.

The paper is organized firstly to identify the resident perspective on the impacts of tourism to socio-

economy in LPB, secondly the literature review, thirdly the methodology, fourthly the report of empirical

results and the last section covers the discussion and conclusions.

Literature Review

Resident Perspective

The Resident Perspective in positive i mpact

The tourism plays an important role with the residents to encouraging the establishment of new

entrepreneurs and develops the existing business of various sectors and services in order to welcome the

tourists and the tourism development (Matarrita et. al, 2010; Mowforth, 2003). With the resident perspective

the tourism plays a very important role to assist and encourage the local people to develop their small

business initiated from family business cater. Some residents with high financial resources combined tourism

knowledge started with high edge services like hotel service business. The resident perspective to the

economic benefits to every community in form of people participatory is encouraged by the authority, like

excursions in remote village of within some days and forest tracking that can generate income to the localpeople (Lepp, 2008; Lea et. al, 1994).

Resident perspective in negative impact

Many comments of unpleasant incidents caused by tourism are loaded by the resident perspective

which have to find the way to alleviate the difficulties and disputes often occurred by tourism entrepreneurs

and behaviors tourists distorted Lao culture. The shipload of visitors shifted the locals to the tourist trades,

abandoned their old traditional trades which had been slowly fade. The old local trade in the centre part

and main area of LPB are most completely transformed to western restaurant style. Some visitors felt they

were in a Boutique Caf and an Italian Restaurant in some corner in Rome but located in LPB Laos. There is a sacrifice of most businessmen, owners of the stores and services facilities are changing

towards serving tourists more than locals because of higher price and good margin. A high-brow affluent

restaurant with high price is not awarded for the locals to sit and enjoy drinking like the tourists relatively

affluent.


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The three social impacts that were included in discussions include community pride, impact on the

quality of life for host community and celebration of community values. These three impacts constitute a

component of change in quality of life for host community (Pete, 2007).

Resident perspectives are focused also on some small and medium entrepreneurs with friend loan

financing of high interest rate actually leading a business closure because it is not survived. While some

interviewees as local residents mentioned that tourism was not an essential industry for the towns economy,

others pointed out that LPB has been transformed into a town which cannot be economically sustained

without tourists. It has become tourist dependent. LPB could not survive without that kind of tourist influx.

Economically, many high ranking resident think tourism is necessary. Luang Prabang is a small town, it

needs that influx of tourists. If we look into of polarization, several interviewees mentioned that due to

tourism polarization was occurring between affluent people who earned money outside Luang Prabang or

from the foreign investors and working class residents whose families have been in Luang Prabang for

generations. Disparity in wealth among locals is real and resident interviewees emphasized tourism as one ofthe major reasons for economic and social polarization between the affluent and the working residents.

Methodology

Data and Sample

In this paper, we used primary data from field survey of 100 interviewees relating to tourism, living in

LPB that could be considered as representatives of LPB residents impacted by the tourism. The field survey

was conducted by researcher and four research assistants which three from 2 Universities. The questionnaires

were designed and based on literature of the impact of tourism on socio-economic. We used a simplerandom for sample selection methods. Face to face interviews and questionnaires distributed to informants

are both methods of our survey strategies.

Data analysis and interpretation

To analyze the impact of tourism on socio-economic and community leaders in LPB, this study use

descriptive statistics methods by calculating Mean and Standard Deviation. Statistics Package for Social

Science was used as analytical tool. Since Likert Scale questionnaires were designed for collecting information

tourism impact on the socio-economic, this study measures the level of impact as following: 5= Very Severeimpact; 4= Major impact; 3= Moderate impact; 2= Minor impact; 1=Very minor impact;

Therefore, we can interpret the results based on the wide of the impact level, which can calculate as

follow:

Wide of impact level=


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Thus, we can interpret the result based on wide level of Mean value as following: 4.21 to 5.00 = Very

severe impact, 3.41 to 4.20 = Major impact, 2.61 to 3.40 = Moderate impact, 1.81 to 2.60 = Minor impact, 1.00

to 1.80 = Very minor impact

Results

Basic Information

Table 1 Descriptive Statistics

Variables N Frequency Percentage Mean Std. Deviation

SEX:

- Female- Male

100

63

37

63.00

37.00

1.37 0.48

AGE:

- < 25 Years old- 25-30 Years old- 31-35 Years old- 36-40 Years old- > 40 Years old

24

31

16

11

18

24.00

31.00

16.00

11.00

18.00

2.68 1.42

STATUS:- Single- Married

30

70

30.00

70.00

1.70 0.46

EDUCATION:

- Primary School- Second School- Vocational- Bachelor degree

21

58

15

6

21.00

58.00

15.00

6.00

2.06 0.77

Table 1 provides basic information of informants who are resulted as resident perspectives. The

information suggests that 70% of residents are in marriage status, which has education levels from primary

school to university level. However, based on the data, we note that the education level of resident

interviewees in LPB is very low.


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Economic Positive Impact of Tourism

Regardless of category and theory, most informants perspective stated of positive benefits of tourism

rather than other issues. Some expressed their views like Definitely tourism helps all, from beggar to high-

end businessmen relatively connected to tourism business and development , Tourism created jobs in

town, Definitely tourism is a big factor in the economics of LPB, Its very important for the health of the

residents , Most of the businesses in LPB and specially the main center area rely on tourism, without the

tourists they would not survive , T he tourism is the top priority for the LPB residents on income which

generate the most part of revenue of LPB authority, To have income and disseminate the culture, Keep

cleanliness, rite and culture, Training the tourist staffs, Facilitate the student to have job and some

income,

Table 2 Positive Impact of Tourism on Economic

Variables N Min Max Mean SD.

PE1(Create more jobs) 100 2 5 4.41 0.71

PE2 (Entrepreneur has developed more businesses) 100 3 5 4.55 0.57

PE3 (People has more income) 100 3 5 4.59 0.66

PE4 (There are more developed infrastructures) 100 3 5 4.19 0.54

PE5 (More investment in various areas) 100 2 5 4.04 0.82

PE6 (Living standard is more improved) 100 3 5 4.38 0.69

Valid N (list wise) 100

The mean of all questions replied by the 100 interviewees is in the high range from 4.04 to 4.59 as

shown in the table 6 below. Every informant fully perceived that tourism brings more benefits to the people

and the community than the disadvantage side affected on a few part of the local residents.

Negative Economic Impact

Apparently the negative economic side of tourism would not be consciously seeable in short time if

most people were encroaching to the income everyday of their tourism connections. Most of the LPB

residents gave some significant and remarkable signals of the negative tourism affects that had been occurred

in Lao community as the result tabulated in the table 3. Most of the locals show their perspectives on the

high goods price relatively caused by the tourism. The mean of 3.17, as indicated in Table 3, is the highest

Mean. The Mean value of 6 variables shown in the table 3 is perceivably few remarkable from 2.66 to 3.17.

Some resident perspectives view the cause of tourism like Goods and food price in LPB are hig her than

other town, Tourism increased cost of land and housing, immigration of labors, over commitment of


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resources and development budgets to tourism, C oncession of any public area caused conflict with the

people, Thief make tourist in trouble, T ourist do not respect Lao law, harm th e Lao culture

Table 3 Negative Impact of Tourism on Economic

Variables N Min. Max. Mean SD.

NE1(More foreigners relatively occupied tourism assets) 100 1 5 2.66 1.14

NE2 (No real freedom and privacy of the entrepreneurs) 100 1 5 2.99 1.30

NE3 (Higher goods price) 100 1 5 3.17 1.07

NE4 (Disparity ofpeoples income) 100 1 5 3.01 1.12

NE5 (Loss of land property) 100 1 5 2.65 1.24

NE6 (Low wage of local employees) 100 1 5 2.61 1.10

Valid N (list wise) 100

Positive Social Impact of Tourism

LPBs tourism industry is based on the charming social community laying in the old town with

traditionally old Lao-colonial designed such as housing, temples with fascinating performance of alms giving

to monks, natural touristic resources and cultural tradition with their unique identity. All cited elements have

creatively and naturally harmonized into one unique social home of LPB. Any LPB people dialogued with

they are very proud, strong self, and seemingly fierce of them self for being and residing in the World Heritage

Site. Most residents related to tourism are happy of the positive economic side as reflected in the table 4.

The mean of 6 types of impact is from 3.15 to 4.51 that represent the satisfaction of LPB traders. Socialinteraction and more diverse taste in town are more active.

Table 4 Positive Impact of Tourism on Social

Variables N Min. Max Mean SD.

PSC1(The residents behaviors and attitudes are changed

in positive way)

100 1 5 3.91 .944

PSC2 ( Making the local resident more proud) 100 3 5 4.49 .659

PSC3 (Making the local residents recognize the important

of education)

100 2 5 4.40 .765

PSC4 (More security and stability in life) 100 3 5 4.44 .625

PSC5 (Create more jobs to women) 100 2 5 4.51 .745

PSC6 ( Reduce the migration of the locals to other places) 100 1 5 3.19 1.398

PSC7 (Thieving and robbery are reduced) 100 1 5 3.15 1.480


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Discussions

The goal of this paper was to study how and why the Resident Perspectives impacted to tourism

affect on Socio-Economic of LPB and how the Resident perspective had stressed in 2 side-effects, positive

and negative, due to the growing up of LPB tourism. The interview was conducted with working local

residents whose relationships were connected to tourism. The study found that resident perspectives in LPB

perceive both side effects of positive and negative socio-economic impacts of tourism. The high majority of

interviewees, regardless of business type, has a strong feeling speaking attachment to their local community

and living town of LPB, and do not want to change their traditional-social town for increased tourism

development even if it results in satisfactory increased revenue. While the importance of the LPB tourism

industry is significantly recognized, the residents do not want LPB town image and tourism businesses to be

relatively and fully dominated by the foreign investors and businessmen. But in the main tourism area during

this transitory-open-market business of the government policy since 1986 to the present time, the foreign

investors take it as a biggest stakeholder of the business affaires and become the leader of high-end business

players of tourism sector of today.

Conclusion

Even though the tourism industry of LPB was a mean powerful key of LPB development at a

significant economic growth rate, in other side the charm and small LPB city was recognized both the positive

and negative impacts of tourism on the present living hood of the LPB residents. The resident perspectiveperceived the positive as larger than the negatives. This study found that the potential for economic gain has

a direct and positive affect on resident support. Nevertheless the survey revealed that the LPB residents

largely benefited from the foreign visitors. Tourism helped promote the value of local-social identity, aroused

peoples consciousness to keep properly their socio -cultural-traditional live style and to save local identity

and their premises and town clean, charm and safe. The adverse affects of tourism on crimes such as drug

and human trafficking, prostitution, burglary, bag snatcher, friction between the tourists and local residents,

polarization leading the division of living classes and other negative ones are believed to be minimal.

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Documents

The Socio-Economic Impact of Tourism in Luang Prabang, Lao PDR.: The Resident Perspective