The Relationship Between Tourism Development and Business Growth in Local Tourism Industry

The Relationship Between Tourism Development and Business Growth in Local Tourism Industry

Cecille D. Polon, Elgen B. Lonzaga, Jessa Mae S. Argoncillo, Annacel M. Blasé, Lara Mechaella C. Corroz

Business Administration Department Bukidnon State University, Kadingilan Satellite Campus

DOI: https://dx.doi.org/10.47772/IJRISS.2025.909000413

Received: 10 September 2025; Accepted: 15 September 2025; Published: 14 October 2025

ABSTRACT

This study investigates the relationship between tourism development and business growth within the local tourism industry in selected municipalities of Bukidnon, Philippines. Using a quantitative descriptive approach, data was collected from 100 respondents comprising tourism business owners and employees across Kadingilan, Kibawe, Dangcagan, Don Carlos, and Damulog. Key tourism development variables examined include marketing and promotion, infrastructure development, and policy and regulatory frameworks; business growth indicators include revenue, employment opportunities, and local business expansion. Results show most tourism businesses are relatively new and small-scale. Tourism development was perceived as highly effective across all dimensions and exhibited a strong and statistically significant positive correlation with business growth. The findings suggest that targeted improvements in infrastructure, marketing, and policy support can enhance local economic development through tourism. Recommendations focus on coordinated local government initiatives for marketing, infrastructure upgrades, business support, and community involvement to sustain tourism growth and local business development.

Keyword-Tourism Development, Business Growth, Local Tourism Industry, Local Business, Tourism

 INTRODUCTION

Tourism is a social, cultural, and economic phenomenon that involves the movement of people to destinations outside their normal environment for personal or professional reasons. According to Saayman and Saayman (2016), tourism is the temporary movement of people to destinations outside their usual environment for leisure, business, or other purposes, involving at least one overnight stay and excluding activities related to permanent residence or gainful employment. Tourism has been a source of income of the people in the community that helps them from their daily living. Tourism development creates job opportunities, increased revenue, and increased numbers of local businesses in the local communities. According to Yehia (2019), tourism is crucial for many economies as it not only boosts revenue but also creates thousands of jobs and enhances infrastructure, fostering cultural exchanges between visitors and locals. As tourism grow, local accommodations, local transportations, local dining and food services, local attractions, local tour operators and travel services, and local support services that caters tourists will be needing more employees and manpower.

By embracing sustainable tourism practices and involving local communities in decision-making processes, it ensures that the positive impacts of tourism are maximized while minimizing its potential negative consequences (Ekstrom, 2023). Tourism development can have its direct effects to the growth of local tourism businesses; these can create job and business opportunities for locals. These benefits will help a certain tourist spot to be developed, known and preserve. Bukidnon, Philippines is popular with its hidden treasures, rich culture and local products and services. When it comes to developing tourism, local tourism businesses can have their opportunities in terms of growing their business and expanding their products and services that caters tourists.

The interplay between tourism development and local businesses is multifaceted. As tourist arrivals increase, local businesses often experience growth in demand for goods and services. According to Gadve (2017), the more will be the tourism in the region the more will be the demand for these businesses which are direct contributors to the tourism industry. Hence the infrastructural development on the tourism sites and destination is highly needed in the region so that the tourism should increase, in the result, it will directly affect the local economy positively due to the growing market demand. Despite of its benefits of tourism are significant, it is important to address the potential negative impacts associated with rapid tourism development. Pololikashvili (2024) noted that, while tourism can drive economic growth, it can also lead to environmental degradation and cultural dilution if not managed responsibly.

According to the Department of Tourism (DOT) in June 2024, the local tourism industry of Bukidnon is ready for growth, with the support of the province’s rich natural and cultural attractions and government initiatives aimed at infrastructure development and sustainable tourism. With the upcoming completion of the Bukidnon Airport Development Project in 2025 is expected to improve accessibility, facilitating increased tourist arrivals and opening opportunities for eco- and farm tourism. It can also be a great opportunity for those tourism businesses to showcase their products and services.

This study aims to identify the relationship between tourism development and business growth in local tourism industry. Also, to aid the gap between tourism and business growth on how tourism development generates business growth. And, how tourism development influences the operation of local businesses in local tourism industry.

According to Magallanes (2018), tourism has become an important sector that has an impact on development in Bukidnon economy. Its main benefits are income creation and generation of jobs. In general tourism industry is extremely profitable process in loads of countries. It is a product and service-oriented industry, generate widespread benefits and impact to the economy and society.

THEORETICAL FRAMEWORK

This study was anchored on the Social Exchange Theory by John Ap (1992). The social exchange theory states that positive actions in a relationship lead to positive responses, fostering mutual benefit and cooperation. To have positive responses from local tourism industry, the tourism development must implement positive actions. In other words, as tourism improves such as hospitality, transportation, hotels, restaurants and attractions, the local businesses benefit from increased tourist spending, which generates job creation, revenue and the growth of local businesses in the community. By listening to the demand of the local businesses and involving local communities in the decision-making processes, the tourism development will have the support of the local community as well as the local businesses.

There was this study of Scarpi et al. (2022) that improves the Social Exchange Theory by John Ap (1992). The study of Scarpi et al. states that also the residents perceive that tourism is beneficial from three main perspectives: first, an economic outlook where tourism generates revenue and employment opportunities; second, from socio-cultural benefits including preservation and appreciation of local culture; and third, environmental benefits related to conservation and sustainable use of natural resources. This study uses Social Exchange Theory (SET) to evaluate how residents weigh these perceived benefits against costs, influencing their support for tourism development. It also emphasizes that different stakeholders may perceive these costs and benefits differently, affecting the dynamics of cooperation and mutual benefit in tourism contexts.

The theory was relevant to the study because it enables the researchers to explain their findings more clearly. It provides structured framework for understanding the mutual interactions between tourism stakeholders, which can improve and clarify how research findings are interpreted. In the context of tourism, this theory can help explain how local businesses and communities perceive and respond to tourism development based on the perceived benefits they receive in return for their support.

Statement of the Problem

This study aimed to examine the relationship between tourism development and business growth in local tourism industry.

The study addresses the following questions:

1 What is the business profile in terms of;

1. Number of years in operations
2. Number of employees

2. What are the respondent’s perspectives on the level of tourism development in the locality in terms of;

1. Marketing and Promotion
2. Infrastructure Development and;
3. Policy and Regulatory Framework8

3. What is the level of business growth in the local tourism industry in terms of;

1. Revenue
2. Employment opportunities and;
3. Local businesses expansion

4. Is there a significant relationship between tourism development and business growth?

5. Based on the findings, what development plan can be suggested to increase tourism in the locality.

METHODS

Research Design and Participants

This study used quantitative research design, particularly descriptive research method, to determine whether a relationship exists between tourism development and growth of businesses directly involved in local tourism industry. Quantitative research design is a research method that collects and analyzes data using statistical methods. A descriptive research method is a methodological technique used to describe and observe a population, phenomena, or circumstance in detail without changing any of the factors. The data for this research was collected from owners and employees from different local tourism businesses around Kadingilan, Kibawe, Doncarlos, Dangcagan, and Damulog Bukidnon. A survey questionnaire was used to find out the opinions of the participants.

Instrumentation and Validity

A researcher-designed survey questionnaire was used, validated by academic experts. It included demographic items and Likert-scale questions assessing tourism development dimensions and business growth indicators. Reliability analysis (Cronbach’s Alpha) was conducted to confirm internal consistency (values above 0.7 for all constructs).

Data Collection and Analysis

Data was collected after informed consent was obtained. Descriptive statistics (means, frequencies, percentages) characterized the sample and variable levels. Pearson correlation assessed relationships between tourism development dimensions and business growth. Multiple regression analysis identified significant predictors of business growth among tourism development factors.

The instrument employed a four-point Likert scale for respondents to rate their agreement with various statements, scored as follows:

• 4 – Strongly Agree (Highly Effective)
• 3 – Agree (Effective)
• 2 – Disagree (Less Effective)
• 1 – Strongly Disagree (Ineffective)

Responses were quantitatively scored according to the Likert scale described above. Frequency distributions were computed for demographic profiles including years in operation and number of employees. Percentages were used to evaluate perspectives on tourism development levels, while frequencies assessed business growth indicators such as revenue increases and employment opportunities. The scoring scheme ensured clear interpretation of the effectiveness levels as perceived by the respondents.

RESULTS AND DISCUSSION

Table 4 Participant’s Profile in Terms of Number of Years in Operations

Table 4 presents the business profile of the participants in terms of their number of years in operations. It is relevant a data for the research study because it shows how years of operation affects tourism development. The number of employees needs to be evaluated to determine how tourism development increase number of employees.

There are higher numbers of businesses with 1-5 years in operation from the selected municipalities because the businesses operating is not as big as those in other places, specifically in cities. The selected municipalities are starting to develop and grow its tourism businesses because of its growing population. The selected municipalities just recently Therefore the tourism development of the selected municipalities depends on the people of the selected municipalities who are willing to operate businesses who caters tourists.

Table 5 Participant’s Profile in Terms of Number of Employees

Table 5 presents the business profile of the participants in terms of their number of employees in local tourism industry. It is important for the research study to identify the number of employees for how tourism development increase the number of employees.

The Businesses’ Level of Tourism Development  

Most of the tourism businesses has 5 employees in the selected municipalities because most of the businesses recently started their business operation. As their business operation has recently started, the number of employees is not yet high unlike other long operating tourism businesses. The selected municipalities are not yet fully developed but continuously growing and expanding.

Table 6 Level of Tourism Development in Terms of Marketing and Promotion

Table 6 presents the respondents perspectives on the level of tourism development in terms of marketing and promotion. The data is essential to the research study to know the effect of marketing and promotion in tourism development. Also, how marketing and promotion increase the level of tourism development in local tourism industry.

Most of the respondents generally have a positive view of tourism marketing and promotion efforts, and there is a high level of agreement among them. The tourism businesses in the selected municipalities are mostly using the social media platforms in terms of marketing and promotion able for their business to be recognized and known by the tourist and visitors in the area. It means that the marketing and promotions are highly effective based on the response of the respondents.

Table 7 Level of Tourism Development in Terms of Infrastructure Development

Table 7 presents respondents perspectives on the level of infrastructure development in local tourism industry. It is relevant for the research study to know the level of infrastructure development because it helps the researcher if there is an increase of infrastructure development in the local tourism industry.

The respondents generally agreed the level of infrastructure development in tourism as highly effective. This positive perception reflects a strong approval of the current state of infrastructure, suggesting that it is viewed as a key strength in supporting tourism growth in the local tourism industry.

Table 8 Level of Tourism Development in Terms of Policy and Regulatory Framework

Table 8 presents the respondents perspectives on the level of tourism development in terms of policy and regulatory.

The respondent’s perceptions towards the level of tourism development in terms of policy and regulatory is highly effective. It indicates that this positive perception indicates confidence in the existing policies guiding tourism growth. And having a strong policy and regulatory framework is strengthen the tourism development in the local tourism industry.

Table 9 Level of Business Growth in the Local Tourism Industry in Terms of Revenue

Table 9 presents the respondent’s level of business growth in the local tourism industry in terms of revenue. This data is essential to the research study to know the level of business growth in local tourism industry in terms of revenue and how Local Tourism generate revenue.

It suggests a strong positive view of revenue generation within the industry. The result indicates that most respondents in the selected municipalities share a similar positive outlook on the industry’s financial performance. the business operations in the selected municipalities are generating revenue as to local tourism industry.

Table 10 Level of Business Growth in the Local Tourism Industry in Terms of Employment Opportunities

Table 10 shows the respondent’s level of business growth in the local tourism industry in terms of employment opportunities. This data is necessary to the research study to know the impact of employment opportunities in the local tourism industry. Also, it shows the impact and the improvement of local tourism on creating job.

It indicates that respondents perceive business growth related to employment opportunities in the local tourism industry as highly effective. This suggests that the expansion of businesses within the tourism sector in the selected municipalities is seen as a significant lead for creating jobs and increasing local employment. The increase of employment opportunities in the selected municipalities helps the tourism businesses operates smoothly and increase their business expansions and capacity to accommodate tourist and visitors in the area.

Table 11 Level of Business Growth in the Local Tourism Industry in Terms of Local Businesses Expansion

Table 11 presents the respondent’s level of business growth in the local tourism industry in terms of local businesses expansion. The data is essential to the research study to find out the effect of local businesses growth, this table provides a valuable insight of improvement of business growth in the local tourism industry. It provides a detailed response of business growth and expansion in the local tourism industry. Also, the data shows how much local businesses in tourism are growing and expanding, based on the responses.

The respondents’ perceptions regarding the expansion of local businesses within the tourism sector. This suggests that while there is optimism about the growth and contribution of local enterprises to tourism, the perception is cautiously favorable rather than overwhelmingly positive. Furthermore, the low standard deviation of 0.39 reflects a strong consensus among respondents, indicating that their opinions on this matter are generally aligned.

Correlation Analysis

Table 12 Relationship Between Tourism Development and Business Growth

Table 12 presents the correlation analysis of the relationship between tourism development and business growth. The data is essential to the research study to find out the relationship of tourism development and business growth in the local tourism industry.

It indicates that effective marketing strategies, improved infrastructures, and supportive policy frameworks are key enablers of economic strength, particularly in tourism dependent regions. These findings support the idea that tourism acts as a substance for local economic development by generating demand for goods and services, stimulating investment, and creating employment opportunities. Particularly, it underlines the importance of an integrated approach to tourism development linking strategic promotion, infrastructure support, and policy alignment to accelerate business growth. The strong correlation underscores that even within these boundaries, tourism initiatives in marketing, infrastructure, and policy already exert a measurable and positive influence on local business growth, suggesting that broader and more inclusive development strategies could further strengthen this impact.

CONCLUSION AND RECOMMENDATIONS

Tourism businesses in the selected municipalities are mostly new and small-scale, reflecting a developing local tourism economy. Tourism development in these areas has been highly effective, particularly in marketing and promotion, infrastructure improvement, and supportive local policy frameworks. This development has created significant benefits by generating employment opportunities, increasing business revenues, and encouraging the establishment of new enterprises within the community. There is a clear and strong positive relationship between tourism development and business growth, indicating that improvements such as better roads and facilities, effective advertising, support for local businesses, and active community involvement increase the growth of the local tourism industry and encourage overall business expansion. This highlights the importance of continuous government and stakeholder support to sustain and maximize the benefits of tourism-led growth.

RECOMMENDATIONS

1. Local governments should implement coordinated digital marketing strategies to enhance individual business efforts and increase visitor numbers.
2. Continue investment in infrastructure, especially roads and transportation, to improve accessibility and tourist experience.
3. Strengthen policy and regulatory frameworks that facilitate business operations, encourage entrepreneurship, and promote sustainable tourism.
4. Provide training programs for local businesses on digital tools, customer service, and market diversification.
5. Deepen community involvement by promoting locally managed tourism products, hiring residents, and organizing cultural events.

Future research should adopt longitudinal designs and qualitative methods to unravel causal mechanisms and deepen understanding of community perceptions.

ACKNOWLEDGEMENT

The researchers hereby express their sincere gratitude to Ma’am Nina Marie G. Jamisolamin, Campus In-Charge, for her invaluable support and guidance throughout this study.

Special thanks are extended to Ms. Charelle P. Tecson, the research instructor, for her expert advice, patience, unwavering dedication and consistently provided valuable guidance and support to the researchers throughout the completion of this study.

The researchers extend sincere appreciation to Ms. Lara Mechaella C. Corroz for her support and guidance to each stage of this research.

Special thanks to the rest of the panel examiners, Dr. Jason B. Montecanas and Dr. Jahzeel M. Candilasa, for being approachable.

To the passionate editor, Dr. Jahzeel M. Candilasa, the researchers are thankful for the suggestions and revisions that made the paper more understandable.

Lastly, the researchers wish to acknowledge the respondents for their cooperation and valuable time during the data collection phase, which was essential to the successful completion of this study.

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