There are positive and negative impacts for ethnic tourism.
1. Economic Benefits
There will be economic benefits to locals, middlemen and country as a whole. The benefits are the same as in mass tourism. It creates more employment, higher income, improves standard of living etc. However, most of the benefits go to people outside the ethnic groups.
2. Cultural Revitalization
Ethnic tourism helps revive the local people's interest and pride in their cultural traditions and values. The influence of western culture has diminished the interests of local people in their traditions. The specific interest of the tourist in local culture and tradition revives the interests of local people in their own culture. The advanced higher level members of the local community will use this as an opportunity to re-educate and re-establish pride in traditional skills and values. There occurs a general revival of interest in traditional festivals and fairs in religious ceremonies, art forms and craft modulation. Ethnic tourism also contributes towards strengthening ethnic and political identities.
1. Commoditization of Ethnic and Cultural Products
Local culture itself is treated as a commodity in ethnic tourism. Travel agents and tour operators, in order to attract tourists will convert all products of local culture into marketable commodities. Local dresses, toys, architecture, idols, potteries, rituals, festivals and all are made sellable things. Local people are paid to perform and enact for the tourists. Tourists and local people are turned into buyers and sellers respectively in a competitive cultural market. If commoditization continues unchecked, it will be destructive to the local culture.
2. Natives Assume Artificial Behaviour
Tourists' demand for 'authentic' and 'original' manifestations lead to staged authenticity. Sometimes art forms would have evolved from what was written in the tourist brochures and advertisements. The tourists at times demand that they need the performance exactly as per the brochure. Thus, the locals are forced to perform in the way the tourists want, in order to meet their demand for 'authentic' and 'original' manifestations. Generally, local people wears western dress and puts up local dress thereby turning themselves into actors.