Caribbean studies term paper

Question
Crusoe hotel operates out of a small Caribbean country. This small hotel is owned by a Swiss couple who advertise in the European market. All inclusive packages are offered to tourist who pay the Swiss couple in their Swiss bank account. The hotel is operated by 5 locals on behalf of the owners who visit frequently. The guest are picked up at the airport and spend most of their time within the bounds of the hotel which has a beautiful bridge of its own. Entertainment is organized within the compound so there is very little reason for tourist to mingle with the local population. The menu of the hotel consists mainly of European type dishes and the food stuffs are imported directly from abroad by the owners.
a) In what way is the government deprived of revenues by this type of arrangement?
The government is deprived of revenues by this type of arrangement because it is not allowing them to benefit from the profits that the hotel is making. By having all revenues going directly to the couple’s account the government loses on foreign exchange and possible income for future investments and infrastructure for the country. In addition, all the revenues earned and transferred into the Swiss account is not accounted for and cannot be taxed by the government. Furthermore, it also affects the tourism sector and puts a strain on the government which should be able to provide jobs for the country but cannot due to the fact that the hotel is only providing employment opportunities for a few individuals rather than allowing more access to the local community to gain exposure and utilize their skills and abilities as individuals. In addition, the hotel is also restricting the locals from providing services as guests are solely on the compound grounds with limited access to other recreational activities that can surely bring in revenue.

b) What impact does this type of tourism have on the local agricultural sector?
The impact this type of tourism has on the local agricultural sector is that it is not allowing the agricultural sector to expand locally and internationally The hotel is not providing them with the business and income of supplying locally grown and produced foods and products to the guests, therefore hindering the county from displaying their local foods and products they have to offer on the world market. Furthermore, it prohibits access to the products and demand for these goods whereby it can potentially increase the GDP (Gross Domestic Product) as more exports will be providing income to the local business community.
c) What impact does this type of tourism have on the rest of the local economy?
The impact it has on the rest of the local economy is that it is hindering growth and development in the small Caribbean country. Especially if this income is making great profit, they are not paying taxes to the government. This in turn causes the economy to have a slight drop due to the fact that this is a small Caribbean country so all the income made by hotels affect the economic growth of the country. Also the direct income for an area is the amount of tourist expenditure that remains locally after taxes, profits, and wages are paid outside the area and after imports are purchased; these subtracted amounts are called leakage. In this case there is no direct income made by the government because it is all lost to leakages, therefore the economy of the small country doesn’t benefit none at all from the crusoe hotel.