Academic journal article International Journal of Business and Society

Direct Expenditure Effects of the Rainforest World Music Festival 2009 in Santubong, Sarawak

Academic journal article International Journal of Business and Society

Direct Expenditure Effects of the Rainforest World Music Festival 2009 in Santubong, Sarawak

Article excerpt

ABSTRACT

An economic impact analysis of a tourism activity could indicate the losses in benefits to the area if the activity were not to take place in the area. The potential losses are equated to the total amount of associated expenditures of visitors spending in the area. An ex post assessment is carried out to measure the impacts of visitors expenditure in a tourism activity, the 3-day Rain Forest World Music Festival 2009 (RFWMF2009) in Santubong, Sarawak. On site data on all associated expenditures spent in the area during the festival were collected from a sample of the visitors. The results show that 34%, 18% and 48 % of the visitors have participated in 1, 2 and 3 days in the festival, respectively. The average total expenditure of per participant is about RM334 per day. A simplified Money Generation Model (MGM) is used to derive the direct economic benefits of the RFWMF2009. The festival has created RM7.4 mil in total sales, 117 new jobs and RM3.3 mil in income to the region. The local authority has received RM0.69 mil in total tax revenue. The impacts are estimates of losses that would have resulted if the festival has not taken place.

Keywords: Input-Output, Participation, Transportation, Accommodation, Souvenir, Food, Culture

1. INTRODUCTION

Impacts to the communities surrounding a location in which tourism activities are undertaken may take several forms. The changes in economic activity that are generated can be evaluated in several ways. Changes in sales (or spending), changes in regional income, and changes in employment are among the common methods of measuring the impacts. When visitors spend within the local area, the expenditure becomes sales or receipts for local businesses or other organizations selling products and services to visitors. Income is the sum of wage and salaries accruing to workers in these businesses and proprietor's income and profits. The impact on employment is measured by the number of jobs supported by the given level of sales, these include part time and seasonal jobs. However, income or value added (that includes income and indirect business taxes) are the preferred measures of the contribution of recreation and tourism to a region's economy (Janke and Deller, 1996).

For recreation and tourism, the action for which impacts are estimated may be the opening or closing of a facility, or more generally some change in the quantity or quality of facilities or marketing efforts that would alter the number of visitors, types of visitors and spending in the local area, for example, the Sepang F1 Motor Racing, the Commonwealth Games in 1998, the Annual World Jazz Festival, etc. As with any impact analysis, the focus is on the estimate of the changes with vs without the action, not just before vs after. Thus the estimate of the increase or decrease in visitors that result from the action becomes the element of the impact analysis. The impacts in this case can be interpreted as the loss in economic activity to the region if all of these visits and the associated spending did not occur in the region.

The RFWMF is an annual event organized by the Sarawak Tourism Board, this event is organized in Santubong which is located about 25 km from the city centre within the City of Kuching. During the three day festival, various programs and activities are organized for the participants. These include cultural and traditional music workshops during the daytime, traditional music performances, by individuals and groups from various parts of the world, during the night time, and sales of local products and souvenirs.

The main purpose of the study is to determine the economic impacts of the RFWMF in terms of income, employment and tax revenue from visitors spending at the festival. The study will also analyze the characteristics of the festival participants and their spending patterns on the facilities and services during the three day festival.

2. IMPACT ANALYSIS: THE INPUT-OUTPUT MODEL

Input-output based models are the most widely accepted approaches to estimate the impacts of economic activities within a region. …

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