The Economy of Tourism in Bangladesh

Furthermore, it can also become an alternate option for foreign exchange earnings, which can reduce the risk associated with the RMG industry. Therefore, focus on tourism can also influence greater economic prosperity. This book will provide a detailed discussion of the tourism-related issues in Bangladesh for academic practices at different universities both at home and abroad for gaining a clear understanding for Bangladesh tourism among the students and also for policy analysis and advice coordinated tourism policies for Bangladesh.

 

2. Overview of Tourism in Bangladesh

 

Roy and Roy (2015) argue that the variety of tourist spots and subsequent policies bring sustainable economic benefits in developing and emerging countries. Therefore, the tourism industry in Bangladesh is recognised as one of the important drivers of the economy and for sustainable development tourism friendly policy should be implemented in Bangladesh. For example, Amin (2010) and Salam (2014) highlight that the most significant economic feature of the tourism receipts is that it contributes to five high priority socio-economic goals of the developing and emerging countries: the generation of income, jobs creation, foreign exchange earnings, improvement of the living standards, and poverty reduction. But before any policy measurement and decision making, the existing natural and economic resources of the country should be accounted first for proper, accurate, and pre-sighted policy measurement. Laws (2002) state that the tourist attractions and the image of any country can influence the tourists to make decisions on their destinations. Thus, depicting the overall scenario of tourism areas in Bangladesh in this chapter is important to have a crystal idea for knowledge gathering and policy measurement.

Bangladesh, being located in the mid-connecting point of South and South East Asian countries, is a land of scenic beauty, ethnicity, unique cuisine, rich heritage and historical relics, profound religious sentiments and much more. The tourism sector of Bangladesh has much to offer to its local as well as foreign travelers. Elena et al., (2012) found that from the ancient period, Bangladesh is famous for her scenic beauty, rich cultural legacy, and friendliness of the people. Besides, tourism is one of the profitable sectors in Bangladesh. The country has much more to attract both domestic and international tourists such as archaeological sites, historical mosques and monuments, resorts, beaches, forests and tribal people, wildlife of various species and most of all sea-side spots. Tourist spots in Bangladesh are not concerted in any particular place; however, they are spread throughout the country. For example, in the northern part, there are many archaeological sites and historical places which are truly a centre of attractions for tourists. In the south-western part, there is the Sundarbans, the largest mangrove forest of the world with Royal Bengal Tiger and spotted deer. One of the world heritage sites, 'the eighty-one domed Shat Gombuj Mosque' in Bagherhat, made by great Muslim saint Khan Jahan Ali in the 15th century is also situated here which is a center of attraction for tourists from both local and international arenas. In the south-eastern part, there are natural and hilly areas like the Chittagong Hill Tracts, along with sandy sea beaches. In the north-eastern part, there is a green carpet of tea plants on small hillocks. The readers will be benefitted from this chapter as they will have a clear insight about Bangladesh tourism and do not need any secondary information. 

References

Amin, S.B. (2010). Tourism development and economic growth in Bangladesh: An application of ARDL testing approach. Bank Parikrama 34-35, 60-82.

Elena, M., Lee, M.H., Suhartono, H., Hossein, I., Rahman, N.H.A., & Bazilah, N.A. (2012). Fuzzy series and sarima model for forecasting tourist arrivals to Bali. Technology Journal, 57 (1). 69-81. Laws, E. (2003). Tourism Marketing: Quality and Service Management Perspectives, Thomson Learning.



Roy, S.C., and Roy, M (2015). Tourism in Bangladesh: Present Status and Future Prospects. International Journal of Management Science and Business Administration 1(8), 53-61.

Seratto, M., Valenzuela, M., & Rayas, V. (2013). Improving tourism competitiveness: The case of Mexico. Business and Economic Research. 3(1), 388-405.

Salam, R. (2014). Tourism & socio-economic development: Focus on Bangladesh, a destination country. International Journal of Business and Management 1(2), 88-98.

 

3. Economic Importance of Tourism in Bangladesh

 

Tourism contributes to five high priority socio-economic goals of the developing and emerging countries: the generation of income, jobs creation, foreign exchange earnings, improvement of the living standards, and poverty reduction in Bangladesh (Amin, 2010; Amin & Rahman, 2019). The existing empirical literature has been conducted on the causal relationship between tourism and economic growth and found a correlation between tourism and economic growth. (Brida et al., 2013; Njoya & Seetaram, 2018; Payne & Mervar, 2010). Tourism activities can also increase government revenue through taxes as different types of taxes are imposed on tourism goods. Tourism development and the subsequent revenues earned by the host government can result in a more productive workforce, increase the living standards, and lead to economic development. In Bangladesh, tourism can play an essential role in maintaining a healthy fiscal balance. Although the tourism industry has many non-economic developmental impacts, only the economic dimension of tourism will be highlighted for the chapter.

Foreign exchange earned by tourism industry can play a very significant role in Bangladesh in generating income and stimulating the investment necessary to finance growth in other economic sectors. The well-known Singer Prebisch Theorem (1950) states that developing countries usually export primary agricultural products, and the terms of trade for primary commodities tend to decline over time. So, if any developing country's export earnings are heavily dependent on the primary product, then their development process is hindered because of the low-income elasticity of demand for the primary products. For the diversity of trade nature and export sector, the tourism industry in Bangladesh should be promoted.

Tourism is also a powerful engine for Balance of Payments (BOP) adjustments for a country like Bangladesh that face balance of payments difficulties because of a deficit in the trade account or capital account or both. It is a good alternative to improve the reserve currency, and it has a positive impact on the balance of payments through foreign currency, which enters the economy. The tourism industry can be a promising sector in Bangladesh in creating jobs directly through restaurants, transportations; tourism-related goods sales, and indirectly through the supply of goods and services needed by this industry. According to Aynalem et al., (2016), tourism and hospitality industries have created many job opportunities for millions of people in the world in di erent areas like accommodation, food and beverage.

Tourism industry provokes the small and informal enterprises who offer labour income to the poor people in Bangladesh. Tourism also affects the livelihoods of the poor in many ways other than cash flows. Supply chains play a significant role in reducing poverty by providing cash and the number of people involved. Also, tourism development may facilitate infrastructure and public service delivery, human resource development, private sector development, stimulate enterprise development, all of which can have important pro-poor impacts in developing countries. But the effect of tourism on poverty reduction may fail if the industry is located far from the places where the poor live. According to Chok et al., (2007), it is important to realise that tourism is but a tool for poverty alleviation. A tool may be used to perform or facilitate a task, but it cannot compensate for ill-conceived plans, lack of capacity and cooperation, inappropriate technology transfers and general dysfunction. Given these backgrounds, the main objective of this chapter is to create awareness among the students, academicians, policymakers regarding the economic importance of tourism sector towards Bangladesh economy. This will eventually help the country to achieve sustainable tourism development in the long run. 

References

Aguayo Eva (2011). "Impact of tourism on employment: An econometric model of 50 CEEB regions", Regional and Sectoral Economic Studies, 11(1), 37-46.

Amin, S.B., & Rahman, S. (2019). Linkages between tourism and energy sector in Bangladesh. In: Energy Resources in Bangladesh. New York, NY: Springer, Cham.

Amin, S.B. (2010). Tourism development and economic growth in Bangladesh: An application of the ARDL testing approach. Bank Parikrama, 34, 60-82.Aynalem., S, Birhanu., K, & Tesefay., S. (2016). Employment opportunities and challenges in tourism and hospitality sectors. Journal of Tourism and Hospitality 5(6), 1-5.



Brida, J., Lanzilotta, B., & Sebestian, J. (2013). A nonlinear approach to the tourism-led growth hypothesis: The case of the Mercosur. Current Issues in Tourism, 18 (7), 647-66.

Chok, S., Macbeth, J., & Warren, C. (2007). Tourism as a tool for poverty alleviation: A critical analysis of 'Pro-Poor Tourism' and implications for sustainability. Current Issues in Tourism. 10, 144-165.

Njoya, E.T., & Seetaram, N. (2018). Tourism contribution to poverty alleviation in Kenya: a dynamic computable general equilibrium analysis. Journal of Travel Research, 57(4), 513-524.Payne, J.E., & Mervar, A. (2010). The tourism-growth nexus in Croatia. Tourism Economics, 16(4), 1089-1094.



 

 

4. Different Types of Tourism & its Significance in Bangladesh

 

Tourism is known as one of the economic drivers of the 21st century due to the multiplier effect of tourist spending and the linkage of this industry to many other industries (Saayman & Saayman, 2006). According to Mason (2003), residents can benefit from tourism either through direct involvement in the tourism industry, such as restaurants and guide services or through the manufacture and sale of craft products, the staging of cultural performances and food production for tourists' needs. The tourism industry is one of the potential productive sectors of Bangladesh, which can contribute to GDP and the local community of Bangladesh. Bangladesh government reformed the national tourism policy in 2010 to generate jobs and ensure sustainable economic development (Siraj et al., 2009). The major objective of the plan was to develop Eco-tourism through conservation of natural resources and promote the well-being of the community, preservation of cultural values of the local community, and their participation and sharing benefits. Different types of tourism have different significance and its impact on Bangladeshi economies such as economic impact, social benefit, and environmental benefit (Roy and Roy, 2015). There are different types of tourism which depend on the reason for travel. The various aspects of tourism should be considered significant, and policy recommendation is foreseeable accordingly. So, the main objective of this chapter is to highlight the tourism options in Bangladesh, which are discussed below briefly.

1. Leisure Tourism: Tourists prefer to travel for a break from their stressful life and prefer to stay in some quiet and relaxed destination. Bangladesh can be an excellent place for leisure tourism as this country has green village sides and wonderful natural scenario which can pacify one's mind.

2. Cultural tourism: Culture remains as one of the most important determinants of tourism. Tourists are keen to enjoy the culture of different countries like food, music, architecture, etc. Bangladesh has a multicultural country where different types of culture are seen equivalents, such as Bengali, Muslim, Christian, Buddha, and other diverse cultures. People enjoy different cultural functions occasionally throughout the year. Cultural tourists may find Bangladesh is fascinating for such tourism.     

3. Religious tourism: Religious tourism is worldwide and expanding rapidly. New religious tourists visit holy places around the world nowadays. Every year thousands of Muslim tourists visit Bangladesh for religious purposes like World Ijtema and others.

4. Seaside Tourism: Among different types of tourism, seaside tourism is a kind of tourism which gives tourists a unique flavour of interaction between land and sea. It is the tourism that offers scenic beauty, rich and diversified biodiversity with historical heritage and healthy food. Seaside tourism includes different recreational activities such as swimming, surfing, sunbathing, coastal walks, fishing, sea adventure by boats, etc. At present, 12 out of 15 world's top tourist destinations are seaside areas. Bangladesh can take advantage of her natural seaside resources and utilise them with the fullest capability to boost up the economic growth as well as socioeconomic development goals.

References

Mason, P. (2003). Tourism impacts, planning and management. Amsterdam: Butterworth-Heinemann. 195p.

Roy, C.,Roy, S., & Mallika. (2015). Tourism in Bangladesh: Present status and future prospects. The International Journal of Management Science and Business Administration. 1. 53-61. Saayman, M. & Saayman, A. (2006). Creating a framework to determine the socioeconomic impact of national parks in South Africa: Case study of the Addo elephant national park. Tourism economics, 12(4), 619-633.

Siraj, S.B., Alam, G. M., Hoque, K. E., Khalifa, M. T. B., & Ghani, M. F. B. A. (2009). The role of agriculture education and training on agriculture economics and national development of Bangladesh. Afr. J. Agric. Res, 4(12), 1334-1350.



 

5. Prospects of Tourism in Bangladesh

 Bangladesh has a reliable platform for the tourism by offering rare beauty of enjoying sunrise and sunset in fascinating Kuakata, the rare beauty of the Sundarbans having the most significant mangrove forest area in the world and the abode of Royal Bengal Tigers, world's largest unbroken sandy sea beach in Cox's Bazar along with many more attractions. Among others, Armin et al., (2014), Amin (2008) argue that Bangladesh has a hundred gates to open, but no gate for departure. Among others, Khulna is famous for the home of the Royal Bengal tigers, Dhaka, is known as the city of mosques, Sylhet, is the land of fascinating hills and tea gardens and Mainamati, Mahasthangarh and Paharpur, archaeological treasures of Hindu and Buddhist rule in the country from 300 BC to 1200 AD (Hossain and Hossain, 2002). The sustainable tourism industry can also contribute to regional development, poverty reduction, and long-run economic growth in Bangladesh. However, the rate of arrival of foreigners and the local tourist is not up to the mark. Over the last 5 years, Bangladesh maintains almost a constant growth in this sector. But this growth of 8% to 10% is not satisfactory comparing to the world standard. In India, the growth rate was over 20%, and in Nepal, 23% last year. Globalisation has increased the competition almost in each sector, including tourism. Bangladesh needs to find out, highlight, and publicise its prospects and future fields of tourism to have competitiveness in the world. Thus, it is imperative for the tourists to know the potential tourist spots with their potentials for a country like Bangladesh. This chapter intends to highlight the prospects of Tourism in Bangladesh.



References:

Amin. S. B. (2008). "Tourism and economic development: Experience of the Asia-Pacific Region". Bangladesh Journal of Political Economy, 24(1 & 2), 681-699.

Armin, N., Raihan, M.A., & Elbushar. I.E. (2014). Prospect of tourism industries in Bangladesh: context of new vocationalism". International Journal of Engineering and Technical Research, 2(6), 203-206.

Hossain, M. A., & Hossain, M. J. (2002). Marketing promotion strategies of the tourism industry in Bangladesh: An empirical study of some selected tour operators. Social Science Review, 19 (2), Dhaka University, Bangladesh.

 

6. Challenges and Barriers of Tourism in Bangladesh

 

Although the tourism industry is potential to generate a substantially large amount of money in the national economy, the rudimentary development initiative, people's perception on the tourism, and country's culture hinder the development of the sector. To have a concept of the obstacles that influence tourism industry negatively, the study of challenges and hurdles of tourism in Bangladesh is a must, and hence, this chapter aims to give a clear idea about the drawbacks of the tourism industry. Numerous reasons stand as a hindrance to the development of the tourism sector of Bangladesh. Firstly, the recreational activities on the beach are very scanty. Tourists do not find any nightlife activities, after spending the day at the beach, but to sleep in hotel rooms. Secondly, Bangladesh's conservative culture is an obstacle to tourism sector development, for example, lack of availability of alcohol for foreign tourists. Thirdly, the necessary infrastructure of the country is a matter of great concern for both the local and international tourists.  Ahmed et al., (2010) argue that the quality of service emerged as an essential factor affecting the tour intention of Bangladeshi tourists. Moreover, the country has yet to build up well-equipped recreational facilities, well-trained tourist personnel, and other attractive entertainment facilities to attract foreign tourists. Fourthly, the lack of community support stands as a major barrier to the development of the sector. Skilled workforces of the local community are responsible for service quality and customer satisfaction, which have been critical concepts in the fields tourism industry (Lee et al., 2004). A significant number of the population in Bangladesh cannot read, write or speak in English, cannot correctly guide a tourist to his destination or lack initiatives to help them in case they need it. The law and order situation also is a very crucial barrier to the growth of the sector. The problems mentioned above and many other issues have been the reasons for Bangladesh tourism industry to lag far behind to reap the full benefits.

References

Ahmed, F., Azam, M.S., & Bose, T. K. (2010). Factors affecting the selection of tour destination in Bangladesh: An empirical analysis. International Journal of Business and Management, 5(3), 52-61.Lee, J., Graefe, A.R., & Burns, R.C. (2001). Service quality, satisfaction, and behavioral intention among forest visitors. Journal of Travel & Tourism Marketing, 17(1), 73-82.



 

7. Role of Government and Private Sector in Tourism in Bangladesh

 

Policies promoting increasing public-private partnerships play an essential role in the strengthening of the tourism sector. For example, the public-private partnership in the tourism industry could be developed in various ways. It could start with public-private strategies, joint proposals of regulations, up to growing business together, and so on. Grigorescu (2008) and Haddadi and Khodadadpoor (2015) argue that private sector investment through different patterns of public-private partnership is an effective way to provide the necessary capital and promote efficiency. To maximize the tourism potentials in Bangladesh, it is crucial to further reinvigorate the Public-Private Partnership (PPP) initiative in Bangladesh as a way of addressing constraints in infrastructure investment in Bangladesh.

For tapping tourism prospects, development of beach-based infrastructure starting from Cox's Bazar to Kuakata is crucial. Theme parks, shopping malls, should be developed by the government in areas adjacent to Cox's Bazar. Introduction of various water sports for recreational activities, construction and servicing of seaworthy pleasure boats and the required supporting infrastructure including marina ports could encourage the growth of coastal tourism. Entertainment zones with different facilities could be established for international visitors such as casinos, clubs, and modern cinema theatres. The government can welcome private entrepreneurs to invest in this sector and develop the tourism sector to a world class standard. Moreover, since Bangladesh has such long coastal areas, the government can develop a strait Riviera cruise route linking Teknaf and Sundarbans. Coordination among the government, private sector, travel agencies, airlines companies, and hotels are key for attracting more tourists in the country. It is also crucial for the country to become a tourist-friendly country with safe and secure roads, controlled law, and order situation and other necessary facilities.It is also an excellent way to involve the private sector for promoting tourism and thereby increase investment. In a developing country like Bangladesh, the government has to give more importance to the social welfare and essential service sector than tourism/hospitality sector due to budget constraints. For that reason, government tourism organisations usually cannot provide competitive service comparable to the private sectors. In this context, the public-private partnership is more suitable for the growth of this sector in any country like Bangladesh, and this chapter will discuss the importance of an integrated public-private partnership for promoting Bangladesh tourism. References



Grigorescu, M. (2008). Models of public-private partnership projects in tourism industry. MPRA Paper No. 25094, online athttp://mpra.ub.uni-muenchen.de/25094/Haddadi, M., & Khodadadpoor, M. (2015). The role of public-private partnership contracts in tourism industry development. International Journal of Academic Research in Economics and Management Sciences. 4(1), 234-244.



 

8. Comparative Analysis of Tourism Sector in the South Asian Countries

 

South Asia possesses many valuable tourist resources and attractions, which could be essential vehicles for reducing the widespread, persistent poverty in South Asia (Rasul and Manandhar, 2009). The region comprises the countries lying between the Himalaya range of mountains and the Indian Ocean (north to south) and between the Ganga and Indus river valleys (east to west) and attracts millions of tourists every year. The annual tourist arrival in 2015 was 23.5 billion, and international tourism receipt stood 39.5 billion USD.  However, the potential for tourism has remained mostly unrealised for several reasons. Maximising the mutual benefits of this growing wave of cross border tourism is an important priority for Bhutan, Nepal, Sri Lanka, India, and Bangladesh under the South Asia Sub Regional Economic Cooperation (SASEC) program. This chapter provides a basic synopsis of a comparison of South Asian tourism.

References

Rasul, G., & Manandhar, P. (2009). Prospects and problems in promoting tourism in South Asia: A regional perspective. South Asia Economic Journal 10(1). 187-207.

 

9. Regional Collaboration

 

Tourism is a crucial driver of socio-economic development, and South Asia is no exception.  So, the promotion of tourism becomes a policy priority of most of the countries in the world. South Asian region is also blessed with enormous tourism potentials, and the tourist attractions of these regions offer ample scope for the regional economic development (Pillai, 2017). However, tourism in the South Asian region has been operating at sub-optimal levels for an extended period. Regional cooperation can play an important role in the development of sustainable tourism in this region. Hall and Jones (1999) argue that absence of integrated transport infrastructure in South Asia in terms of cross-border road and rail links, limited air connectivity between major cities and lack of transit facilities within the region are a major constraint to developing intraregional tourism. Regional collaboration has the potentials to overcome these barriers and to accelerate economic growth, combat poverty, generate employment, and reduce economic inequality within the South Asian region. Findlay and Goldstein (2004) highlight that regional integration reduces the cost of trade attracts privatisation and promotes tourism. A remarkable restraint of the region is the existing visa regime as many of the countries have a burdensome visa-processing environment (Kanungo, 2018). So, a uniform visa through regional integration can allow the tourist to visit all the countries within this region and certainly benefits a country like Bangladesh. The region can adopt policies like the European countries and offer tour packages for all the countries. Developing tourism initiatives on a regional basis is gaining momentum as uniform branding, and marketing strategies can strengthen the competitiveness of tourism destinations benefits for each country individually and the region as a whole. The tourism industry depends on the spending of tourists and, therefore, ease of travel will factor heavily in the traveler's decision on whether to patronize a particular tourist destination. This chapter will address the existing barriers for regional collaboration in the tourism sector, highlights the benefits of regional collaboration and propose policies to facilitate regionalisation the tourism development projects.

References

Findlay, C. & Goldstein, A. (2004). Liberalization and foreign direct investment in Asia transport systems: The case of aviation. Asian Development Review. 21 (1), 37-65.

Hall, R., & Jones, C. (1999). Why do some countries produce so much more output per worker than others? Quarterly Journals of Economics. 114(1), 83-116.

Kanungo, A.K. (2018). Regional integration in service in South Asia: Opportunities and constraints. International Studies. 55(2), 167-193.

Pillai, K.R. (2017). Tourism in South Asia: An economic leverage to India. Asia Pacific Journal of Tourism Research. 1-11

 

10. Conclusion and Policy Recommendations

 

Ensuring security for tourists as well as residents is the first and foremost factor for sustainable development of tourism in Bangladesh. If the security measures are not taken into consideration carefully, then, tourist inflow will decline, and this will ultimately affect the tourism business in the long run. More law enforcement personals are needed to ensure law and order in the tourist spots in Bangladesh. Besides, public law enforcement agencies (Police and RAB), private agencies might be included to widen the security coverage. It has also been seen that the transportation system is not that much developed in many touristic areas. To visit different places, tourists sometimes face problems such as high fare or travelling through poor quality vehicles. Introducing a travel fare policy is necessary but also needs proper monitoring so that the policy is properly executed. The government can start tourist coaches for tourists to visit different places. Besides, to make the tourism spots more vibrant, development of infrastructures is a must. First of all, access to electricity has to be ensured in the tourist spots. It was found from the survey that, in the offseason, access to electricity remains very poor in many spots. Even in the peak season, there is a lack of electricity access in other areas than tourist spots. Hence, it is important to improve the infrastructures related with access to electricity so that access to electricity is ensured in both seasons. More roads, hotels/motels or recreation spots can be built to attract more tourists and their stay in the touristic places. As there is a lack of hospitals, more hospitals or medical teams are needed in the tourist spots. Providing such services will release mental pressure from the tourists regarding any emergency health issues. Roads have to be improved within the city so that connectivity remains efficient. Establishing a diplomatic zone can provide different bits of help to foreign travelers.