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The Study of 2012 London Olympic Business Opportunities Research Paper

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Introduction

Overview

This section covers the background to the study, problem statement, research objectives, hypotheses and the significance of the study.

Background to the study

According to the statistics of World Tourism Organization (UNWTO) and World Travel and Tourism Council (WTTC), in the next 10 years, as the world’s largest industry, the global tourism industry will grow by more than 4.4 percent annually, the number of international tourists and international tourism revenue is postulated to expand by between 4.3 percent and 6.7 percent annually. This is far much higher than the 3 percent of world’s wealth increasing rate (World Travel and Tourism Council, 2011). By the year 2020, tourist arrivals worldwide are expected to reach 1.6 billion passengers; the tourism industry revenue will increase to 16 trillion dollars, which is equivalent to 10 percent of the global GDP. At least 300 million jobs will be provided, accounting for 9.2 percent of the total global employment, further strengthening its position as the world’s largest industry (Shiwen, 2008). According to the World Tourism Organization, the global financial crisis in the US and Europe crippled tourism market in mature economies, tourism in emerging economies is still developing. Tourism industry has become the first industry to rebound in the international financial crisis. It contributes to reducing the negative impact of the crisis and plays an active role in the global economic recovery (World Travel and Tourism Council, 2011).

Since the occurrence of the global economic crisis, UK’s tourism industry continued to maintain the momentum of rapid development. Its international tourism ranked first in Europe in addition to a strong tourism growth domestically (Shiwen 2008, p.25; Sorensen, 2004). There are at least 20,000 travel agencies, 14,000 star hotels, 18,500 tourist attractions and 1.350 million practitioners. In 2010, UK’s domestic tourism revenue was 1.26 trillion Yuan (equivalent to £ 117.3 billion), increasing by 23.5 percent. Tourism foreign exchange revenues were $45.8 billion, increasing by 15.5 percent. UK’s total tourism income was 1.57 trillion Yuan (equivalent to £146.15 billion), increasing by 21.7 percent and equivalent to 3.94 percent of UK’s GDP. Tourism industry, as a new economic growth point, has been further strengthened (World Travel and Tourism Council, 2011).

However, the data above only shows that UK is a big tourist destination, not a destination with powerful competitiveness. UK has a long way to go on efficiency of resource allocation and competitiveness of tourism enterprises as compared with the other developed countries (Southall, 1998). In terms of the overall economic benefits since the 1990s, there were two distinct characteristics: at the macro level, entailing that the industrial system and the size of the market are growing rapidly, and at the micro level, entailing that the total number of enterprises and incomes are increasing. The total profits and profit margins of tourism are declining even to negative profit margins and zero profit, thus, the tourism market as a whole marks a poor performance (Leslie, 2009; Tang, 2005). UK’s tourism market performance is summarized in Table 1.1 below.

Table 1.1 Performance of UK’s tourism market. Source: (He & Xu, 2007, p.53).

Feedback of tourists It is okay, decreasing the rate of complaints, but lack of personalized and national brands.
Efficiency Many companies are not the main market players. Thus, the efficiency of resource allocation and labor productivity are low. In 2009, the average occupancy rate of star hotels was 57.88%.
Development Enterprises’ lack of competitiveness and innovation. Imitation and import are the main production and technology development method. Lack of international tourism business groups.
Margin In 2009, the total profit of national tourism enterprises was 14.038 billion Yuan. The margin was 3.47%.

According to the structure conduct performance model of industrial organization, market structure determines market behavior, and market behavior has further affected the market performance (Bain, 1968; Unger & Chan, 1994, p.37). Therefore, the poor performance of the UK’s tourism market can be attributed to the market structure. Table 1.2 shows the characteristics of UK’s tourism market structure.

Table 1.2 UK’s tourism market structure. Source: (He & Xu, 2007, p.54).

Enterprises Number In 2009, UK’s total travel agencies, star hotels and other tourism enterprises numbered to 34,636, the composition is: 20,399 travel agencies and 14237 star hotels (Rooms 1,673,500).
Firm size Small, scattered, weak and poor, and lack of a giant enterprise group. Enterprise structure is irrational.
Market concentration A typical dispersion competitive market structure. UK’s largest travel agencies are: UK International Travel Service, UK Travel Service and UK Young Travel Service; they occupied less than 25% of the market share.
Tourists Number UK’s domestic tourist number in 2009 reached 1.902 billion, increasing by 11.1% over the previous year.
Access barriers Low cost of entry and high cost of exit.
Product differentiation Low level of differentiation.

The table above depicts that UK’s tourism enterprises have not become a real mainstay of the market, with small scale and low competitiveness. Against the backdrop of market expansion, while the overall effectiveness is growing, the acceleration is sluggish, resources allocation is inefficient and the market performance is poor (Wang, 2003).

Statement of the problem

Over the recent years, UK has developed to turn out to be one of the top tourist destinations worldwide. The relatively good performance of the tourism market in the UK is because of the existence of some large travel companies (Wang, 1995; Wang, 2003).

UK is a major tourist destination with development potential; UK is a big tourist destination, not a destination with powerful competitiveness (Wu 2002, p.1081). UK has a long way to go on efficiency of resource allocation and competitiveness of tourism enterprises as compared with the other developed countries. Potential converting into real productivity needs to establish a number of powerful national or multinational leveled enterprises with international competitiveness (He & Xu, 2007, p.57; Wu, Xu & Yeh, 2007). Increasing UK’s tourism market performance should be attributed to improving tourism market structure, forming large scale tourism enterprises, improving the correlation of assets in tourism industry, optimizing the industrial structure, regulating the tourism market behavior and ordering market competition (Wu & Ma, 2005; Yin & Wang, 2000). The development of enterprise conglomeration is the only way for UK’s tourism.

Aims of the study

The general objective of this study was to determine the economic effects of sports tourism in the UK. In line with the general objective, the study examined the following specific objectives:

  1. To determine the role of sports tourism in exploitation of the country’s natural resource;
  2. To determine the effect of sports tourism on the country’s terms of trade;
  3. To determine the effect of sports tourism on the country’s balance of payment;
  4. To investigate the role of sports tourism in employment creation in the country;
  5. To explore on the role of sports tourism on the balanced growth of the country’s economy.

Research Hypotheses

In order to meet the above objectives, the following hypotheses were tested:

  1. Ho1: Sports tourism does not exploit the country’s natural resources;
  2. Ho2: Sports tourism has no impact on the country’s terms of trade;
  3. Ho3: Sports tourism has no effect on the country’s balance of payment;
  4. Ho4: Sports tourism does not create employment opportunities;
  5. Ho5: Sports tourism does not contribute to the balanced growth of the country’s economy.

Purpose of the Study

The findings of this study are of great value to policy makers and regulatory authorities. It provides the policy makers with a wide exposure with regard to the assessment on how sports tourism affects the economy of the country, thus enabling them to adopt the relevant strategies in line with the situation. The findings of this study also add to the body of knowledge of related studies concerning the effects of sports tourism in the economy of the UK.

Literature Review

Introduction

This chapter reviews the theories both empirical and theoretical that are closely linked to the economic effects of sports tourism in UK.

Definitions

The various standardized terms used in the field of tourism have been built up and approved by the World Tourism Organization (WTO). According to the WTO, tourism entails the complete combination of actions of any person who is travelling from his/her home environment to somewhere outside that environment for a standard period of time, normally less than year. The person travelling pays for the activities that he/she is involved in at the place of visit (He & Xu, 2007, p.53; Abelson & Levi, 1985, p. 16; Arnould & Price, 1993, p. 26). Sports tourism, however, should not be confused with migration as the travelling person does not move out permanently.

The various activities that the tourists engage in include: leisure, business, recreation, etc. The WTO has classified tourism into various categories. The categories include:

  1. Domestic tourism, which entails local country residents visiting tourist attraction sites located in the country,
  2. Sports tourism, which entails the visit to a country by people who are not residents,
  3. Outbound tourism, which entails residents of a particular country visiting tourist attraction sites located in other countries,
  4. Internal tourism, this is a mixture of both domestic tourism and sports tourism,
  5. National tourism, this is a mixture of both domestic tourism and outbound tourism, and
  6. International tourism, this is a mixture of both sports tourism and outbound tourism (Baloglu & McCleary, 1999; Baloglu, 1997, p. 225; Bargeman & Poel, 2006, p. 710; Barros & Proença, 2005, p. 300; Barsky, 1992, p. 52).

The conceptual foundation of analysis of economic impacts of sports tourism

The analysis of the economic impacts of tourism is concerned with the approximation of the transformations of the economic activities in a particular region as a result of tourism activities (He & Xu, 2007, p.55; Baker & Crompton, 1998, p. 800; Baker & Burnham, 2002, p. 352; Baker & Hart, 1999). To various scholars in the field of tourism, economic impact analysis deals with the estimation of government revenue, the level of income, the level of employment and the revenue generated from the import of the tourists’ expenditure (Leslie, 2009; Beerli & Martín, 2004, p. 660). The direct economic effects of tourism are the transformations that occur in the line-industries that are connected to the tourists’ activities. For instance, if a visitor checks him/herself in a hotel and pays $200, the payment is bound to directly increase the volume of sales in the hotel for that day. In this way, a direct sales effect is achieved as a result of the expenditure of the visitors. This payment will enable the hotel to hire more employees and pay them well (Bentler & Speckart, 1979, p. 455; Bettman & Park, 1980, p. 235; Bultena & Klessig, 1969, p. 350; Correia & Crouch, 2004; Correia, 2002, p. 24).

When the hotel makes purchases from suppliers who mainly are from industries that are connected to the activities of the hotel, an indirect economic effect of tourism is achieved, as the purchases made by the hotel will increase the volume of sales to the suppliers and also enable the suppliers to employ more attendants and give them good remunerations (Shiwen, 2008; Crompton & Ankomah, 1993, p. 463; Fleischer & Pizam, 2002, p. 110; Fodness, & Murray, 1997, p. 512; Fodness, 1994, p. 560). For instance, the hotel can buy bed sheets or blankets or foodstuffs from various industries so that they can provide quality services to their customers; the incomes gained or the jobs created from the sales of these products by the linked companies are the indirect economic effects generated from tourism (Gnoth, 1997, p. 300; Goosens, 2000, p. 312; Howard, & Sheth, 1969; Kozak, 2001, p. 790; Lancaster, 1966, p. 140).

Apart from direct and indirect economic effects, there are also induced economic effects. The induced effects are connected to the sales or the earnings received from the direct or indirect spending by the tourists (He & Xu, 2007, p.53; McCabe, 2000, p. 1050; Mohsin & Ryan, 2003, p. 120). The induced economic effect of tourism is in most cases evident from the activities of the hotel employees or employees of catering companies, for instance, when they spend their salaries, they create more sales, jobs and incomes (Guo, 2000, p.208; Morley, 1992, p. 252). The induced expenditure can be lost partly through savings or through importation of goods or services. When the losses occur, they are termed as leakages (Shiwen, 2008; Oliver, 1993, p. 420; Smith, 2003).

The expenditure by tourists creates extra economic effects to other sectors of the economy. As a result of this, the level of income and expenditure of the various households increase and a chain of spending and re-spending is initiated. This is referred to as the ‘multiplier effect’ (Leslie, 2009; Ryan, 1994). Multiplier effect depicts the ultimate output change in the economy in relation to the original visitor’s expenditure change. In addition, the multiplier effect is important to the assessment of the economic effects of tourism in the economy. When the multiplier effect is so large, it means that the impact of the visitors’ expenditure to the economy is also great (Guo, 2000, p.207).

The multipliers entail the magnitude of all effects. It is more often than not the ratio of the total effects of tourism on the economy to the direct effects of tourism on the economy (Miller & Blair, 1985). For example, suppose the sales multiplier for an accommodation industry is 1.5 in a certain region, any visitor who spends $100 on accommodation will generate a total effect of $150 with regard to sales in that region; this translates to $100 direct sales effect to the accommodation industry and $50 secondary effect to the related industries that are in the region. Hence, the real economic impact of tourism lies on the expenditure of the visitors (He & Xu, 2007, p.53).

Economic impact analysis

In order to support the decisions that are related to tourism, there are various economic analyses that are undertaken. These forms of economic analyses are related to each other and in many occasions, they tend to be confused with each other. Thus, every kind of economic analysis is recognized by the issues it addresses and the type of model it is based on (Leslie, 2009).

Types of economic impact analysis

Economic impact analysis

This type of analysis focuses on the role of tourism activities to the economic position of a region. It mainly checks out the patterns of expenditure related to tourism activities based in the region so as to point out the changes with regard to sales, incomes and tax remittances that come about as a result to tourism activities (Frechtling, 1994). The important methods that are used in this kind of analysis include: a survey involving the expenditure of the visitors, a survey of the government economic statistics, a survey of the region’s economic models, a survey of the input-output models and a survey of the multipliers (Frechtling, 1994).

Fiscal impact analysis

This type of analysis focuses on whether the revenue that the government generates from activities related to tourism, taxes, or other sources will sufficiently finance the government’s expenditure (Burchell & Listokin, 1978). Therefore, fiscal impact analysis points out the various changes with regard to the government’s expenditure in connection to the amount of revenue collected or received from the government’s services (Burchell & Listokin, 1978).

Financial analysis

This type of analysis focuses on whether any extra profit can be realized from the tourism activities; for instance, it analyzes whether the revenue generated from the tourism activities will surpass the total cost used in those activities so as to make a substantial amount of profits. Financial analysis always covers the availability of capital to start up and also the availability of funds to finance the operating cost and other overhead costs. The analysis of finance for a small private enterprise is equivalent to the fiscal analysis of the impacts of tourism in the economy (Burchell & Listokin, 1978).

Demand analysis

This type of analysis focuses on the assessment of changes to the number of tourists visiting a certain area as a result of changes to the prices of tourist activities, changes to promotional activities, changes to competition, changes to the quantity and quality of the tourism facilities and changes to other determinants of demand (Walsh, 1986). Using the demand analysis, it is possible to make a forecast concerning the qualitative or quantitative aspects of the visiting tourists through estimations. These forecasts are usually made paying attention to the past and current trends of tourist activities in the region. In addition, these predictions are made through the use of a model that analyzes the various determinants that affect patterns of tourists’ visits and expenditure. These determinants include: size of the population, the levels of income, the nature of competition and the distance between the market and the accommodation area (Johnson & Thomas, 1992).

Cost benefit analysis

This kind of analysis focuses on the assessment of whether there exist other optional policies that provide the society with the largest package of benefits during a certain period of time (Sudgen & Williams, 1978). Therefore, a cost benefit analysis plays the role of approximating the competence of the other optional policies by weighing their benefits in terms of cost over a period of time, so as to point out the best policy in overall. In order to achieve this, the cost benefit analysis approach employs a wide array of methods; such methods include: the travel cost technique and also the contingent valuation technique (Sudgen & Williams, 1978).

Feasibility study

This kind of analysis evaluates whether the selected project should be embarked on. In other words, it aims to point out whether the selected policy has good chances of succeeding once it is commenced. In many cases, feasibility study involves carrying out the financial analysis in order to investigate whether there are chances of success. A feasibility study that is conducted by the private sector is equivalent to conducting the cost benefit analysis in the sector. The main difference between feasibility study and cost benefit analysis is that in feasibility study the benefits and the cost go to individual people or individual business organization while in cost benefit analysis, the benefits and the costs mainly go to the society as a whole (Warnell, 1986).

Environmental impact analysis

This kind of analysis focuses on the assessment of the effects of the projects or policies selected on the environment. The projects or policies can affect the environment in various ways, for instance, cultural changes, physical changes, changes to the ecological system, social changes, etc. (Williams, 1994).

The tourism industry

Tourist destination can be categorized with regard to the sectors they originate from, i.e. transport sector, infrastructure sector, attractions sector, supporting facilities sector and accommodation sector. All these sectors are related in that tourists are encouraged to visit through attractions, they make their visits through transportation, the supporting facilities (for instance, banks, hotels, shopping centers) ensure that the visitors are well taken care of during their vacation, a proper infrastructure confirms that all the other related sectors are properly working (Leslie, 2009).

The tourism industry is majorly concerned with setting up enterprises or organizations that make it easy for people to travel from their normal environment to a different environment. The business of tourism can be divided into two levels, i.e. level one encompasses enterprises or organizations that cannot survive without the existence of tourism e.g. hotels, travel agencies and airlines. Level two encompasses enterprises or organizations that would still thrive even without tourism existing; however, their existence would be of a diminishing form. Some examples of these enterprises include: gift shops, taxis, rental car agencies, etc. (He & Xu, 2007, p.53).

Ecotourism is the most recent style in the tourism industry. It entails travelling that consists of both conservation of the natural environment and maintaining the interests of the people who live in that environment (Frechtling, 1994). There are significant differences between ecotourism and traditional tourism. Ecotourism focuses on measures that guarantee that the visitors do not engage in any activity that endangers the natural environment. In addition, ecotourism encourages sustainable tourism. Thus, any tourism activity that causes harm to the environment or diminishes the local cultures of the people in the environment is not attuned to ecotourism (Guo, 2000, p.203).

Relationship between tourism business and economic development

Global tourism has significant impacts on different economies, suggesting that tourism is a business that has great economic magnitude. Tourism is a great source of income and job opportunities, besides being a significant aspect of balance of payment for various economies. As a result of this, many governments give special treatment to the tourism sector because of the huge contributions it makes to the economy (Leslie, 2009).

In the developing countries, tourism plays various important roles in the economy. Tourism necessitates the utilization and management of the natural resources in the country. In addition, tourism enables the developing countries to be in a position to compete internationally as a result of favorable terms of trade. More so, tourism contributes to an improved balance of payment. Tourism also creates job opportunities and raises the level of income of the people. Due to the tourism industry, the developing countries have a balanced growth in their various sectors of the economy (He & Xu, 2007, p.53).

Due to the fact that tourism industry employs several people, it calls for the improvement and expansion of the education sector in order to offer training to the local people and expose them to this field. With regard to this, the levels of professionalism have risen as many more jobs have been created. It is beneficial to conduct an elaborate economic impact analysis of tourism in order to equip the policy makers with the relevant information that will guide them in making reforms (Frechtling, 1994). The revenue that tourism pumps into the economy is mainly got from the expenditure or the spending of the tourists, especially when they source for goods and services.

The tourism sector offers a wide variety of job opportunities. These jobs are spread across retail firms, communication sector, construction companies and manufacturing companies. A large potion of the population is a beneficiary of these jobs. Tourism, therefore, plays a major role in the development of emerging economies as it improves the welfare of many people, hence, raising their standards of living. Tourism is just like any other product for sale that can be imported or exported; the only difference is that it is intangible; therefore, it cannot be manufactured, packaged, or transported to the destined market. In the same way, tourism resembles a product for sale; the customer (tourist) travels to the market (point of sale) and pays for the good or service and eventually receives it. Therefore, tourism is a product that is sold to consumers who majorly come from abroad; hence, it is regarded as the biggest and the widest export product (Guo, 2000, p.207).

Impacts of sports tourism on economic and business development

For many developing countries, especially the ones in the Caribbean, tourism has been regarded as a very important foreign exchange earner; hence, it is a major source of wealth to these countries. Therefore, for these countries to continue earning from tourism activities, they should ensure that the tourism activities should be friendly to the environment and sustainable (Frechtling, 1994). For other developing countries, tourism is quickly replacing agriculture as the main foreign exchange earner; hence, fostering for the diversification of their financial systems. The main motivation for a country to have a well developed tourism sector is to maximize their foreign exchange earnings in order to maintain an efficient balance of payment. The tourism sector is a sector that grows continuously, thus, it is always viewed as a sector that enables the country to earn much through foreign exchange for over many years (Leslie, 2009).

International tourism experienced a major shock when the United States was attacked by terrorists on September 11, 2001. This affected international tourism both in the short run and in the long run. When terrorism is not controlled, international tourism is highly affected as the travelers have minimal confidence to travel around and tour the world. The risks involved cannot be measured; hence, it becomes so difficult to quantify the effect of terrorism on tourism (He & Xu, 2007, p.53).

The tourism industry is assisted by a wide range of associated companies or enterprises. They include: airline companies, accommodation industries, manufacturing firms, tour firms, travel and tour agencies, financial institutions, and taxi and car rental agencies. Tourism enables these industries to expand and grow, thereby, creating more jobs and increasing income earnings for the people concerned. In addition, tourism facilitates the flow and exchange of wide varieties of cultures all across the world. This has played a great role towards the development of the associated industries, businesses, firms or enterprises that assist the tourism industry (Guo, 2000, p.205). The direct revenue or income that is obtained from tourism include: money spent by the visitors on accommodation, meals, travelling, leisure and entertainment, and visit to game reserves or game parks or beaches. The direct revenue from tourism makes it possible for indirect revenue to be earned.

Various scholars have pointed out that tourism as a quickly expanding and rapidly growing industry, aims at promoting programs that protect the natural environment, because this environment serves as a home to the animals and plants that the tourists aim to see. Tourism also aims at addressing the issues that touch on the social factors, economic factors and natural factors that change from time to time. Through tourism, resources are allocate in a balanced manner; thus, enhancing the development of infrastructure and eradication of poverty (Leslie, 2009).

The dynamics of international tourism have rapidly changed over the years since the end of the Second World War. In the year 1999, tourism industry was estimated to have a value of US$8,000 billion, accounting for 6 percent of the world’s total economy (World Travel and Tourism Council, 2011). That is to say, from the year 1949 when tourism started to develop, it took only 50 years to match the contribution of mining and agriculture to the world’s total economy (World Travel and Tourism Council, 2011). In the same year (1999), the tourism sector managed to employ at least 200 million people across the entire world (World Travel and Tourism Council, 2011).

The quick growth and expansion of the tourism sector year after year has not failed to be noticed as the most outstanding element of tourism. In the 1950s, the number of international tourists was only 25 million visitors; come the year 2000, this number had rapidly grown to at least 699 million visitors world wide. This indicates that the annual tourism growth rate has been 7 percent (World Travel and Tourism Council, 2011). The total revenue received from tourism or tourism related activities grew by 11 percent in this period (Guo, 2000, p.201).

Economically, the receipt from international tourism entails export and import of international tourists’ expenditure. Several countries receive direct revenue from tourism or tourism related activities. The direct revenue mainly entails the revenue that is received by a country as a result of taxes. Developing countries greatly rely on the tax revenue in order to enhance their economic growth and development. There are at least 40 different types of taxes that are enforced on the tourism industry; the most common taxes include: accommodation taxes, visa taxes and airport arrival and departure taxes. There are various variables that relate to the direct revenue earned from tourism. The variables include: the total number of visitors expected; the number of days that they are expected to stay; and the level of their daily expenditure (He & Xu, 2007, p.53). The government has an option of influencing any of the variables so as to achieve maximum direct revenue from tourism.

The governments need to identify tourism as the top earner of revenue. In order to support this, the various governments should work out policies that aim at expanding both travel and tourism so that the sector should grow exponentially. The country’s business set up needs to offer a very competitive field so as to raise the business standards and improve the quality of the business products. In addition, the various governments need to expand the transport sector, the communication sector and international trade, as these are the sectors that play a great role toward the development of the tourism sector. Moreover, the various countries need to work on the security measures so as to ensure that the tourists are safe. The tourism sector should also be expanded so as to make it more sustainable and it should aim at protecting and preserving the cultures of the country residents. With these mechanisms in place, the tourism sector is greatly improved and well maintained in order to satisfy all the stakeholders who are concerned (Frechtling, 1994).

Tourism policies and their impacts on the national economy

Tourism is viewed as the fastest growing industry all over the world as it the main creator of jobs and source of revenue for the governments. Statistics from the World Tourism Organization (WTO) indicate that at least 10 percent of the total world’s income is generated by tourism, and at least one tenth of the total world’s population is employed by the tourism sector (World Travel and Tourism Council, 2011). These figures indicate that tourism plays a very important role in terms of safeguarding the economic welfare of the country; hence, the need to set up a proper management authority to check on the welfare and the growth of the tourism sector. In the emerging economies, the great benefits of tourism on the economies is very hard to point out due to the fact that a very large amount of income that is got from tourism is transmitted out of the country since the local enterprises, firms and products are excluded. Therefore, increase in income, employment opportunities, and improvements in the standards of living are negligible.

When the government formulates the tourism policies effectively and plans properly, the tourism sector is greatly boosted; thus, its chances of growing and expanding are majorly boosted. The economic effect of tourism in the economy cannot fail to be recognized as it is exceptional and easy to point out. The balancing of a country’s terms of trade is always regarded as a very positive contribution of tourism to the economy. Apart from impacting the country’s economy, tourism also has social impacts to the local societies. When there is a boom in tourism, the government moves swiftly to welcome and contain the visitors. In addition, sustaining and maintaining the tourism activities require extra money from the government or from the local community who pay tax (He & Xu, 2007, p.53).

These extra costs are required to meet the expansion of roads, airports, hotels and other infrastructure that are associated to the tourism sector. Tourism necessitates the development of social infrastructures such as hospitals, schools and colleges, cyber cafes, etc. These social infrastructures make it possible for the local society to be linked to the tourism activities and participate in one way or the other. As a result of this, several businesses are expanded as many interested investors opt to invest (Guo, 2000, p.201).

The developing strategy of UK’s sports tourism

The macro-development strategy of UK’s tourism

On the motivation of the conglomeration of tourism enterprises, there are three different voices in the academic world:

Government led strategy

The reasons to advocate for government led strategy are based on three points: First, UK’s tourism development experience over the past 30 years. Second, the lessons learnt from the developed countries. Third, the nature of tourism industry makes it to revolve in many related sectors (Prahalad & Hamel, 1990, p.24; Ruan 2000, p.57).

Government support for advanced project

Some scholars have argued that the government should actively encourage the consortia to enter the hotel industry or form groups, but the method should be based on acquisition, equity transferring and improving the existing hotels. In particular, the government should promote the cooperation between consortia and hotels and famous hotel management companies in order to let big financial groups hold shares and pass the management rights to the management company; thus, setting up the giants in hotel industry (Zou, 1999, p.122).

The market oriented strategy

Experts in the industry thought that capital is the key for the success of UK’s tourism conglomeration. That means that capital management should be a mode of operation to form tourism groups. In order to develop tourism groups according to the market oriented standards, the expansion ought to follow the market laws. First, conglomerate groups should implement an internal management strategy to improve management and enhance the effectiveness of internal allocation of resources. By expanding markets, companies can develop new products, adjust the organizational structure, improve management, increase productivity and control costs to integrate the internal resources under the capital structure (Wang, 2006, p.202).

Business strategy of UK’s tourism group

Conglomerating a group itself is not hard. What is difficult is what comes after the establishment of a group. Can it develop orderly and durably?

UK’s tourism market development strategy

  • The strategy in the country: major travel agencies should expand under the same brand and integrate the internal business. The market focus should be mid end domestic tourism and business tourism market (Dai, 1999, p.124). Low end starred hotel are the best choices for agencies to conglomerate and network (Zhang, Qin & Li, 2000, p.43).
  • The strategy worldwide: in the process of merging with the international tourism market, the main competitors are changing from the small and medium enterprises to large enterprises and enterprise groups, and the competition among countries bears a nature of global strategy (Guo, 2000, p.201). The development of international strategy will not only help to make extensive use of foreign resources, but also improve the international competitiveness of UK’s tourism enterprises (Li, 2000, p.14).
  • The market development space of UK’s tourism group: under the context of industrial restructuring in the country, a comprehensive restructuring of the asset structure has happened in some industries. Thus, a number of new tourism enterprises with modern management system have come into being. These companies with loose alliances and the ones with systematic management are the ideal companies for cooperation with the UK’s tourism groups (Prahalad & Hamel, 1990, p.24; Ruan, 2000, p.57).

UK’s tourism development strategy within the group

Without cohesion, the effectiveness of conglomeration is not much strong. There will be no business combination, no powerful group benefits, no upwards power, and no sustainable development vitality (Wang, 2006, p.210). Since the development of UK’s tourism group determines the group’s internal cohesion, there are many studies that have been studied on this topic. The specific strategies can be divided as follows:

  1. The importance of clear property rights is the consensus within business and academic fields: The facts and figures of the recent years show that, the diversification of property rights, joint-stock reform and the list of the shares on stock can not only increase the funding for the tourism enterprises, but can also dump the non performing assets, select high quality asset for listing and raise more money (Zou, 1999, p.120). As the groups have not solved the core issues like the form of restructuring their corporate assets and property rights allocation, they failed to form an organic combination and failed to form a strong large scale and intensive management, resulting in the high cost of doing business, bloated organization and low efficiency; thus, the result of conglomeration is not obvious and the awareness is not high (Zhang & Zhang, 2000). The UK’s Travel Group should stand on the basis of the clarification of property rights, improvement of the level of capital operation, and transfer of the capital to cost effective enterprises and fields so as to achieve capital efficiency (Prahalad & Hamel, 1990, p.24; Ruan, 2000, p.57).
  2. Improved management: First, companies ought to concentrate on the development of human resources. After the establishment of a travel group, more expert consultants, strategic management staff and professional managers are needed. Tourism human resources development is an important guarantee for orderly and sustainable development of the group. Professional management is a necessary means to accumulate the core competitiveness for the travel group (Liu & Dong, 2001, p.132).

Secondly, travel groups need to establish related organizational structures. Organizational innovation of tourism enterprises has two means, one is to collaborate with organizations in the fields and the second involves collaborating with large companies and co-investing in tourism enterprises (Dai, 1999, p.127). Virtual chain entails a management model of using the strongest power and limited resources to maximize its effectiveness, based on computer network technology and it will be an indispensable operating mechanism in the future (Dong, 1999, p.125). With the development of tourism, it is a realistic and feasible way to develop UK’s tourism by establishing strategic alliance (He & Xu, 2007, p.52).

  1. The innovation of mode of operation: In the process of development, tourism groups need to create on operation mode according to their environment and conditions. Actually, the operation mode is diversified (Wei, 2000, p.130). The conglomeration needs to build five resource system, human resource, capital resource, material resource, time and space resource and information resource (Wei, 2000, p.133). From the perspective of market operation of tourism enterprises, the competition of level 1 is price competition, which is on the lowest level and most common one. Level 2 is quality competition, and level 3 or the highest level is culture competition (Wei, 2000, p.133).

Methodology

Introduction

Methodology is the process of instructing the ways to do the research. It is, therefore, convenient for conducting the research and for analyzing the research questions. The process of methodology insists that much care should be given to the kinds and nature of procedures to be adhered to in accomplishing a given set of procedures or an objective. This section contains the research design, study population and the sampling techniques that will be used to collect data for the study. It also details the data analysis methods, ethical considerations, validity and reliability of data and the limitation of the study.

Research philosophy

For this part, choosing a philosophy of research design is the choice between the positivist and the social constructionist (Easterby, Thorp & Lowe, 2008). The positivist view shows that social worlds exist externally, and its properties are supposed to be measured objectively, rather than being inferred subjectively through feelings, intuition, or reflection. The basic beliefs for positivist view are that the observer is independent, and science is free of value. The researchers should always concentrate on facts, look for causality and basic laws, reduce phenomenon to simplest elements, and form hypotheses and test them.

Preferred methods for positivism consist of making concepts operational and taking large samples. The view of the social constructionists is that reality is a one-sided phenomenon and can be constructed socially in order to gain a new significance to the people. The researchers should concentrate on meaning, look for understanding for what really happened and develop ideas with regard to the data. Preferred methods for the social constructionists include using different approaches to establish different views of phenomenon and small samples evaluated in depth or over time (Saunders, Lewis & Thornhill, 2009). For the case of analyzing the London Olympic business opportunities on the local tourism industry in the United Kingdom, the philosophy of the social constructionists was used for carrying out the research. Because it tends to produce qualitative data, and the data are subjective since the gathering process would also be subjective due to the involvement of the researcher.

Sample selection

Population refers to the total elements that are under investigation from which the researcher draws conclusion (Saunders, Lewis & Thornhill, 2009, p. 90). A sample is a subset of the population, i.e. it is a representation of the total population (Saunders, Lewis & Thornhill, 2009, p. 90). This study mainly used a non-probability design of sampling. In this design, not every participant in the study has an equal chance of being chosen. Non-probability sampling design does not utilize much cost and time, hence it is widely preferred. When smaller samples are used, a non-probability research design is susceptible to errors, thus, normally a larger sample size is selected. In addition, it was preferred for the number of observations to be more than the number of variables as a regression analysis was to be conducted.

Research design

In line with the main objective of this study which is to identify the relationship between employee commitment and job attitude on service quality for the elderly in tourism industry, this study employed a cross-sectional research design. Under this design 450 respondents were targeted. They were issued with questionnaires to assist with data collection. The respondents were assured of the confidentiality of their participation.

Statistical method

Descriptive statistics and inferential statistics were both applied in the study in order to test the hypotheses.

Descriptive statics

Descriptive statistics is mostly applicable for analyzing numerical data. It uses distribution frequencies, distribution of variables and measures of central tendencies (Saunders, Lewis & Thornhill, 2009, p. 93). The characteristics of the sample chosen will be used to compute frequencies and percentages with regard to the questionnaires.

Inferential statics

Inferential statistics gives the researcher the chance to convert the data into statistical format so that important patterns or trends are captured and analyzed accordingly (Easterby, Thorp & Lowe, 2008, p. 72). Regression analysis is utilized in inferential statistics. Regression analysis is employed to check on the relationship between a dependent variable and independent variable. It allows for the researcher to predict and forecast the expected changes to a dependent variable when one independent variable changes (Easterby, Thorp & Lowe, 2008, p. 72).

Data Collection and Instrumentation

Questionnaires were used to collect the data. The questionnaires were issued to 450 respondents who were mainly employees in the tourism industry. The participants’ responses were treated with much confidentiality.

Data Analysis Methods

Data from the survey were entered into the Excel spreadsheet program for future analysis. Data was analyzed using SPSS, ANOVA, regression and correlation analysis.

Limitation of data collection methods

There have been a lot of concerns on additional budgetary expenses for collection of the data, regardless of whether the gathered data is really genuine or not and whether there may be an explicit conclusion when interpreting and analyzing the data. In addition, some employees were reluctant to offer some information they deemed confidential and unsafe in the hands of their competitors. This posed a great challenge to the research as the researcher had to take a longer time to find employees who were willing to give out adequate information.

Validity and reliability

Validity of the data represents the data integrity and it connotes that the data is accurate and much consistent. Validity has been explained as a descriptive evaluation of the association between actions and interpretations and empirical evidence deduced from the data. More precaution was taken especially when a comparison was made between employee commitment and job attitude. The impact of the Olympics games may differ from country to country and may not be identical in an industry. Reliability of the data is the outcome of a series of actions which commences with the proper explanation of the issues to be resolved. This may push on to a clear recognition of the yardsticks concerned. It contains the target samples to be chosen, the proper sampling strategy and the sampling methods to be employed.

Results, Data Analysis and Interpretation

Introduction

This section covers the analysis of the data, presentation and interpretation. The results were analyzed using SPPS, ANOVA, regression and correlation analysis.

Descriptive statistics

Biographical information

237 respondents (52.6%) of the expected 450 respondents completed the questionnaires. The respondents had varied age distribution which is summarized in the Figure 4.1 below.

Age distribution of respondents.
Figure 4.1 Age distribution of respondents.

The figure indicates that many respondents were from the age group 40-49 years (43%, n=101). This was followed by respondents in the age group 30-39 years (24%, n=57). The third largest age group was 50-59 years which had 55 respondents (23%). The age group under 30 years had the lowest number of respondents (10%, n=24).

An analysis of the gender of the total respondents was made. The gender distribution is summarized in Figure 4.2 below.

Gender distribution.
Figure 4.2 Gender distribution.

The figure indicates that many respondents (60%, n=142) were female, whereas only 40% (n=95) were male emloyees.

An analysis of the respondents’ acaemic qualification was made. The qualification level is summarized in Figure 4.3 below.

Respondents’ academic qualification distribution.
Figure 4.3 Respondents’ academic qualification distribution.

The figure shows that many respondents (54%, n=128) had Bachelors degrees. This was followed by those who had Higher diplomas (18%, n=42), Diploma holders (16%, n=39) and Masters degree holders (12%, n=28) in that order.

An analysis of the employment category of the respondents was done. The employment category is summarized in Figure 4.4 below.

Employment category distribution.
Figure 4.4 Employment category distribution.

The figure shows that a majority of the respondents (55%, n=130) were employed on a permanent basis. This was followed by 89 respondents (37%) who were temporarily employed. Only 8% (n=18) of the respondents were employed on contract.

Summary of descriptive statistics

Descriptive statistics using the measures of central tendencies were computed from the results gathered from the questionnaires. The questionnaires focused on the economic effects of sports tourism in UK.

Results for economic effects of sports tourism

Respondents who were majorly employees in the tourism industry were issued with questionnaires in order to express their responses regarding the role of sports tourism in UK’s economy. The summary of the results is in Appendix 2. The results show that from the sample of 237 respondents, the mean for tourism’s role in exploitation of natural resources is 113.20 with a standard deviation of 14.30. From this computation, it can be deduced that many employees believe that sports tourism contributes to the exploitation of the county’s natural resources; this is indicated by the higher value of the standard deviation. In addition, the calculated arithmetic means for the role of sports tourism in improving terms of trade, balance of payment and balanced economic growth are less than the calculated arithmetic mean for the role of sports tourism in creating employment. It is, therefore, evident that sports tourism is a major employment creator. Sports tourism creates employment (Mean=127.20, SD=15.30) than balancing the economic growth (Mean=114.35, SD=14.22), improving balance of payment (Mean=103.10, SD=10.80), and improving terms of trade (Mean=102.12, SD=11.30).

Results for the economic impact analysis

Respondents who were majorly employees in the tourism industry were issued with questionnaires in order to express their responses regarding the role of sports tourism in UK’s economy. The summary of the results is in Appendix 3. The results show that the total environmental impact of sports tourism had a mean of 65.43 and a standard deviation of 19.24. With regard to the fact that an average level of impact is represented by a mean of 60, it is evident that sports tourism has a significant environmental impact. In addition, economic impact (mean=60.12, SD=13.02) stipulates that sports tourism has great economic benefits. Fiscal impact (mean=62.41, SD=15.02) stipulates that sports tourism had an effect on the country’s expenditure or spending. Financial impact (mean=67.02, SD=17.41) stipulates that there are financial benefits associated to sports tourism.

Inferential statistics

The results of inferential statistics were used to establish the relationship that exists among the variables that analyzes the economic effects of sports tourism; in addition, inferential statistics was used to ascertain the connection among the variables. The results are summarized in the Appendices 4 to 7.

The results in Appendix 4 show that there are major correlations between improvement of terms of trade and sports tourism (r = 0.598, p < 0.01), employment creation and sports tourism (r = 0.585, p < 0.01), balanced economic growth and sports tourism (r = 0.386, p < 0.01) and between improvement of balance of payment and sports tourism (r = 0.268, p < 0.05). There was also a significant relationship between the exploitation of natural resources and sports tourism (r = 0.273, p < 0.05).

The results in Appendix 5 show that there is a relationship between economic impacts and the economic impact analysis (r = 0.342, p < 0.01). There was also a strong relationship between fiscal impacts and the economic impact analysis (r = 0.436, p < 0.01). Furthermore, there was a strong relationship between financial impacts and the economic impact analysis (r = 0.701, p < 0.01). There was a significant relationship between environmental impacts and the economic impact analysis (r = 0.472, p < 0.01).

The results in Appendix 6 are for the economic variables regressed against sports tourism. Appendix 7 shows the ANOVA Analysis. The result found out that the multiple R-value is 0.602. The R-Square value of 0.361 indicates that 36.1% of the variables explained the dependent variable. The F-statistic (5.295) is statistically significant at 0.01 level; meaning that the economic variables significantly enlighten 36.1% of the variance in sports tourism. Improvement of balance of payment is the best predictor of sports tourism as it has a beta coefficient value of -0.3189 and is statistically significant at the 0.01 level. In addition, improvement of terms of trade, exploitation of natural resources and balanced economic growth are statistically significant at 0.05. The negative value of the beta coefficient of balanced economic growth indicates that sports tourism has a higher effect in terms of economic growth in developed countries than in the developing countries. In the same manner, the negative beta value of the exploitation of natural resources coefficient shows that the natural resources are very important for sports tourism.

Discussion

Introduction

This chapter presents the summary of the findings and discussion of the results in accordance to the objectives of this study. Finally, the chapter contains the conclusions and recommendations.

Summary of findings

The general objective of this study was to determine the economic effects of sports tourism in the UK. In line with the general objective, the study examined the following specific objectives: to determine the role of sports tourism in exploitation of the country’s natural resource; to determine the effect of sports tourism on the country’s terms of trade; to determine the effect of sports tourism on the country’s balance of payment; to investigate the role of sports tourism in employment creation in the country; and to explore on the role of sports tourism on the balanced growth of the country’s economy.

The objectives were satisfied by collecting and analyzing pertinent data using various statistical techniques. In line with the objectives, the following hypotheses were tested: sports tourism does not exploit the country’s natural resources; sports tourism has no impact on the country’s terms of trade; sports tourism has no effect on the country’s balance of payment; sports tourism does not create employment opportunities; and sports tourism does not contribute to the balanced growth of the country’s economy.

According to the World Tourism Organization, the global financial crisis in the US and Europe crippled tourism market in mature economies, tourism in emerging economies is still developing. Tourism industry has become the first industry to rebound in the international financial crisis. It contributes to reducing the negative impact of the crisis and plays an active role in the global economic recovery (World Travel and Tourism Council, 2011). Since the occurrence of the global economic crisis, UK’s tourism industry continued to maintain the momentum of rapid development. Its international tourism ranked first in Europe in addition to a strong tourism growth domestically (Shiwen 2008, p.25; Sorensen, 2004).

With regard to the questionnaires issued to the respondents, the results revealed that sports tourism holds a significant weight in the UK’s economy. Sports tourism leads to the exploitation of the natural resources of the country. Sports tourism also leads to the balancing of the country’s terms of trade as it is a major foreign exchange earner. In addition, through sports tourism, the country is in a good position to correct the imbalances that exist in the balance of payment. Apart from also creating many employment opportunities, sports tourism contributes to the balanced growth of the UK’s economy as it stimulates the growth of other sectors of the economy.

According to the structure conduct performance model of industrial organization, market structure determines market behavior, and market behavior has further affected the market performance (Bain, 1968; Unger & Chan, 1994, p.37). Therefore, the poor performance of the UK’s tourism market can be attributed to the market structure. The tourism industry is majorly concerned with setting up enterprises or organizations that make it easy for people to travel from their normal environment to a different environment. The business of tourism can be divided into two levels, i.e. level one encompasses enterprises or organizations that cannot survive without the existence of tourism e.g. hotels, travel agencies and airlines. Level two encompasses enterprises or organizations that would still thrive even without tourism existing; however, their existence would be of a diminishing form. Some examples of these enterprises include: gift shops, taxis, rental car agencies, etc.

Conclusion

Sports tourism has the capability to produce from one sector of the economy to the other. It does this by facilitating the flow of income and resources from one sector of the economy to the other; combined with the multiplier effect, increased revenue, expansion of employment opportunities and increase in foreign direct investment and earnings from foreign exchange. All over the world, there is a wide perception that tourism contributes highly to the economic growth of a country; thus, making it play a significant role in the economy of the country. A well developed tourism sector will boost the public pride of the residents of the country, improve education system and professionalism, and improve earnings for the country.

UK is a major tourist destination with potential for further; UK is a big tourist destination, not a destination with powerful competitiveness. UK has a long way to go on efficiency of resource allocation and competitiveness of tourism enterprises as compared with the other developed countries. Potential converting into real productivity needs to establish a number of powerful national or multinational leveled enterprises with international competitiveness. Increasing UK’s tourism market performance should be attributed to improving tourism market structure, forming large scale tourism enterprises, improving the correlation of assets in tourism industry, optimizing the industrial structure, regulating the tourism market behavior and ordering market competition. The development of enterprise conglomeration is the only way for UK’s tourism. The quick growth and expansion of the tourism sector year after year has not failed to be noticed as the most outstanding element of tourism. In the 1950s, the number of international tourists was only 25 million visitors. Come the year 2000, this number had rapidly grown to at least 699 million visitors world wide. This indicates that the annual tourism growth rate has been 7 percent (World Travel and Tourism Council, 2011). The total revenue received from tourism or tourism related activities grew by 11 percent in this period.

Apart from direct and indirect economic effects, there are also induced economic effects. The induced effects are connected to the sales or the earnings received from the direct or indirect spending by the tourists. The induced economic effect of tourism is in most cases evident from the activities of the hotel employees or employees of catering companies. For instance, when they spend their salaries, they create more sales, jobs and incomes (Guo, 2000, p.208). The induced expenditure can be lost partly through savings or through importation of goods or services. When the losses occur, they are termed as leakages.

The expenditure by tourists creates extra economic effects to other sectors of the economy. As a result of this, the level of income and expenditure of the various households increase. Due to this a chain of spending and re-spending is initiated. This is referred to as the ‘multiplier effect’ (Leslie, 2009). Multiplier effect depicts the ultimate output change in the economy in relation to the original visitor’s expenditure change; in addition, the multiplier effect is important to the assessment of the economic effects of tourism in the economy. When the multiplier effect is so large, it means that the impact of the visitors’ expenditure to the economy is also great (Guo, 2000, p.207).

Experts in the industry thought that capital is the key for the success of UK’s tourism conglomeration. That means that capital management should be a mode of operation to form tourism groups. In order to develop tourism groups according to the market oriented standards, the expansion ought to follow the market laws. First, conglomerate groups should implement an internal management strategy to improve management and enhance the effectiveness of internal allocation of resources. By expanding markets, companies can develop new products; adjust the organizational structure; improve management; increase productivity and control costs to integrate the internal resources under the capital structure

Recommendations

The findings of this study reveal that sports tourism plays an important role in contributing to the economic growth of UK. Stakeholders and major players are called upon to formulate policies that support the growth and expansion of the tourism sector. In addition, the stakeholders should formulate policies that protect and conserve the environment and the tourist attraction sites so as to make the tourism industry to be sustainable.

The UK’s economy expects to earn a lot of foreign exchange from tourism. Thus, they should create much awareness to the local community so that they can know the country’s position with regard to the tourism sector. When this is done, everybody will be motivated to participate toward sustaining the tourism sector. The government should establish a scientific organizational structure to assist UK’s tourism industry. The development of tourism conglomeration must be based on their own development, and build a compatible property rights, governance structure, operational modalities and management mechanism with the market economy system.

When the government formulates the tourism policies effectively and plans properly, the tourism sector is greatly boosted. Thus, its chances of growing and expanding are majorly boosted. The economic effect of tourism in the economy cannot fail to be recognized as it is exceptional and easy to point out. The balancing of a country’s terms of trade is always regarded as a very positive contribution of tourism to the economy. Apart from impacting the country’s economy, tourism also has social impacts to the local societies. When there is a boom in tourism, the government moves swiftly to welcome and contain the visitors. In addition, sustaining and maintaining the tourism activities require extra money from the government or from the local community who pay tax.

These extra costs are required to meet the expansion of roads, airports, hotels and other infrastructure that are associated to the tourism sector. Tourism necessitates the development of social infrastructures such as hospitals, schools and colleges, cyber cafes, etc. These social infrastructures make it possible for the local society to be linked to the tourism activities and participate in one way or the other. As a result of this, several businesses are expanded as many interested investors opt to invest

Statement of contribution

Summary

The main aim of my study is to explore on the economic effects of sports tourism in the UK. In line with this objective, my study investigated whether sports tourism contributes to the exploitation of the country’s natural resources, whether sports tourism corrects the imbalances in both the terms of trade and balances of payment, whether sports tourism creates many job opportunities and whether sports tourism contributes to the balanced growth of the economy. My study explored elaborately on the various forms of economic impact analysis with regard to sports tourism. The study relied on primary data using structured questions to explain the main objective and the data was analyzed using statistical tools like SPSS, ANOVA, Pearson correlation and regression analysis.

The study found out that sports tourism plays a very important economic role to the UK’s economy. Apart from being the job creator for a great number of the population, sports tourism also necessitates the exploitation of the natural resources. It corrects the imbalances in both the terms of trade and the balance of payment. In addition, sports tourism also contributes to the balanced economic growth of the country. Other than the economic effects of sports tourism, there are also social effects which are drawn from the economic effects. The social effects include: expansion of roads, expansion of airports and building of hotels, construction of schools and hospitals, and development of other social amenities that are associated to sports tourism.

Contributions and impacts

According to the statistics of World Tourism Organization (UNWTO) and World Travel and Tourism Council (WTTC), in the next 10 years, as the world’s largest industry, the global tourism industry will grow by more than 4.4 percent annually, the number of international tourists and international tourism revenue is postulated to expand by between 4.3 percent and 6.7 percent annually; this is far much higher than the 3 percent of world’s wealth increasing rate. By 2020, tourist arrivals worldwide are expected to reach 1.6 billion passengers. The tourism industry revenue will increase to 16 trillion dollars, which is equivalent to 10 percent of the global GDP. At least 300 million jobs will be provided, accounting for 9.2 percent of the total global employment, further strengthening its position as the world’s largest industry. According to the World Tourism Organization, the global financial crisis in the US and Europe crippled tourism market in mature economies, tourism in emerging economies is still developing. Tourism industry has become the first industry to rebound in the international financial crisis. It contributes to reducing the negative impact of the crisis and plays an active role in the global economic recovery.

The tourism industry is majorly concerned with setting up enterprises or organizations that make it easy for people to travel from their normal environment to a different environment. The business of tourism can be divided into two levels, i.e. level one encompasses enterprises or organizations that cannot survive without the existence of tourism e.g. hotels, travel agencies and airlines. Level two encompasses enterprises or organizations that would still thrive even without tourism existing. However, their existence would be of a diminishing form. Some examples of these enterprises include: gift shops, taxis, rental car agencies, etc.

Ecotourism is the most recent style in the tourism industry. It entails travelling that consists of both conservation of the natural environment and maintaining the interests of the people who live in that environment. There are significant differences between ecotourism and traditional tourism. Ecotourism focuses on measures that guarantee that the visitors do not engage in any activity that endangers the natural environment. In addition, ecotourism encourages sustainable tourism. Thus, any tourism activity that causes harm to the environment or diminishes the local cultures of the people in the environment is not attuned to ecotourism.

The UK’s economy expects to earn a lot of foreign exchange from tourism. Thus, they should create much awareness to the local community so that they can know the country’s position with regard to the tourism sector. When this is done, everybody will be motivated to participate toward sustaining the tourism sector. The government should establish a scientific organizational structure to assist UK’s tourism industry. The development of tourism conglomeration must be based on their own development, and build a compatible property rights, governance structure, operational modalities and management mechanism with the market economy system.

When the government formulates the tourism policies effectively and plans properly, the tourism sector is greatly boosted; thus, its chances of growing and expanding are majorly boosted. The economic effect of tourism in the economy cannot fail to be recognized as it is exceptional and easy to point out. The balancing of a country’s terms of trade is always regarded as a very positive contribution of tourism to the economy. Sports tourism holds a significant weight in the UK’s economy. Sports tourism leads to the exploitation of the natural resources of the country. Sports tourism also leads to the balancing of the country’s terms of trade as it is a major foreign exchange earner. In addition, through sports tourism, the country is in a good position to correct the imbalances that exist in the balance of payment. Apart from also creating many employment opportunities, sports tourism contributes to the balanced growth of the UK’s economy as it stimulates the growth of other sectors of the economy.

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Appendices

Appendix 1: Questionnaire

My name is XXXX, a postgraduate student at XXX University, majoring in XXXX. The aim of the survey is to comprehend the economic effects of sports tourism in UK, which is a very important topic in my research. This is an academic research study and your participation is voluntary. Information provided will be confidential and individual data will be reported. Thank you

Part A

General background information of the employees (please tick where applicable)

  1. Gender
    • ( 01) male
    • ( 02) female
  2. Age_______ years.
  3. Job title _____________________
  4. Work experience _______ years, in this organization _____ years.
  5. Level of education and training
    • (01) Diploma
    • (02) Higher Diploma
    • (03) Bachelors
    • (04) Masters
  6. Terms of employment;
    • (01)Permanent
    • (02) Contract

Part B

The following 17 statements describe your degree of attachment and loyalty to the organization you are now employed with. Please respond by indicating the degree to which each of the statements applies to you using the following scale:

1
Strongly
Disagree
2
Disagree
3
Slightly
Disagree
4
Neither
Agree of
Disagree
5
Slightly
Agree
6
Agree
7
Strongly
Agree

There is no right or wrong answer. Write the number that best indicates to what extent each of the statement is true or not true in the parenthesis provided at the end of each statement

  1. Sports tourism promotes exploitation of the natural resources [ ]
  2. Sports tourism improves the country’s terms of trade [ ]
  3. Sports tourism improves the country’s balance of payment [ ]
  4. Sports tourism creates many job opportunities [ ]
  5. Sports tourism contributes to the balanced growth of the economy [ ]
  6. Sports tourism earns the country foreign exchange [ ]
  7. Sports tourism expands the country’s trade [ ]
  8. Sports tourism contributes to the development of local infrastructure [ ]
  9. Sports tourism leads to improvement of the peoples’ incomes [ ]
  10. Sports tourism contributes to improved standards of living [ ]
  11. Sports tourism enhances the conservation of the environment [ ]
  12. Sports tourism boosts the image of the country and the pride of the country’s residents [ ]
  13. Sports tourism leads to the expansion of the country’s social amenities [ ]

Appendix 2: Descriptive statistics for economic effects of sports tourism

Mean Standard deviation
Exploitation of natural resources 113.20 14.30
Improving terms of trade 102.12 11.30
Improving balance of payment 103.10 10.80
Employment creation 127.20 15.30
Balanced economic growth 114.35 14.22

Appendix 3: Descriptive statistics for economic impact analysis

Mean Standard deviation
Economic impact analysis 60.12 13.02
Fiscal impact analysis 62.41 15.02
Financial analysis 67.02 17.41
Environmental impact analysis 65.43 19.24

Appendix 4: Pearson correlation matrix for economic effects of sports tourism

Sports tourism
Pearson correlation Sig (2-tailed)
Exploitation of natural resources 0.273 0.044*
Improving terms of trade 0.598 0.000**
Improving balance of payment 0.268 0.042*
Employment creation 0.585 0.000**
Balanced economic growth 0.386 0.003**

NOTE:

  1. * = p<0.05
  2. ** = p<0.01

Appendix 5: Pearson correlation for economic impact analysis

Impact analysis
Pearson Correlation Sig (2-tailed)
Economic impact 0.342 0.021*
Fiscal impact 0.436 0.002**
Financial impact 0.701 0.000**
Environmental impact 0.472 0.000**

NOTE:

  1. * = p<0.05
  2. ** = p<0.01

Appendix 6: Multiple regression results: sports tourism and economic variables

Multiple R 0.602
R Square 0.361
Adjusted R Square 0.332
Standard Error 12.961
F 5.295
Sig F 0.00**
Variable Beta T Sig T
Exploitation of natural resources -0.2164 -0.2670 0.03969*
Improving terms of trade -0.2684 -2.4021 0.0108*
Improving balance of payment -0.3189 -3.0942 0.0029**
Employment creation -0.1537 -1.2951 0.0701
Balanced economic growth -0.1806 -1.1092 0.0229*

NOTE:

  1. * = p<0.05
  2. ** = p<0.01

Appendix 7: ANOVA Analysis results: sports tourism and economic variables

ANOVA-Analysis of Variance
Alpha0.05 F-table3.874
ANOVA Table
Sources SS df MS F-stat P-value
Between 138 4 68.7 5.295 0.04274
Error 192.5 12 18.3
Total Error 330.5 16
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