ECONOMIC IMPACTS OF TOURISM
ECONOMIC IMPACT <ul><li>study of the economic effects of the 'shocks' to the system caused by climatological, environmenta...
 
POSITIVE ECONOMIC IMPACTS OF TOURISM <ul><li>Foreign exchange earnings </li></ul><ul><li>Contributions to government reven...
FOREIGN EXCHANGE EARNINGS <ul><li>Proceeds from the export of goods and services of a country, and the returns from its fo...
CONTRIBUTION TO GOVERNMENT REVENUES <ul><li>DIRECT CONTRIBUTIONS </li></ul><ul><li>are generated by taxes on incomes from ...
<ul><li>The rapid expansion of international tourism has led to significant employment creation. </li></ul><ul><li>Tourism...
INFRASTRUCTURE INVESTMENT <ul><li>Tourism can induce the local government to make infrastructure improvements such as bett...
CONTRIBUTION TO LOCAL ECONOMIES <ul><li>As the environment is a basic component of the tourism industry's assets, tourism ...
<ul><li>The positive side of informal employment is that the money is returned to the local economy, and has a great multi...
 
NEGATIVE ECONOMIC IMPACTS OF TOURISM <ul><li>Leakage </li></ul><ul><li>Enclave tourism </li></ul><ul><li>Infrastructure co...
LEAKAGE <ul><li>LEAKAGE   is the non-consumption uses of income, including saving, taxes, and imports </li></ul><ul><li>Ec...
2 MAIN WAYS THAT LEAKAGE OCCURS <ul><li>IMPORT LEAKAGE   </li></ul><ul><li>occurs when tourists demand standards of equipm...
<ul><li>EXPORT LEAKAGE   </li></ul><ul><li>an export leakage arises when overseas investors who finance the resorts and ho...
SOURCES OF LEAKAGE <ul><li>imports of materials and equipment for construction;  </li></ul><ul><li>imports of consumer goo...
ENCLAVE TOURISM <ul><li>ENCLAVE </li></ul><ul><li>describes an area of a country, region or city that is occupied by peopl...
<ul><li>Local businesses often see their chances to earn income from tourists severely reduced by the creation of  &quot;a...
INFRASTRUCTURE COST <ul><li>Tourism development can cost the local government and local taxpayers a great deal of money.  ...
<ul><li>Increasing demand for basic services and goods from tourists will often cause price hikes that negatively affect l...
ECONOMIC DEPENDENCE OF THE LOCAL COMMUNITY ON TOURISM <ul><li>DIVERSIFICATION   in an economy is a sign of health, however...
SEASONAL CHARACTER OF JOBS <ul><li>PROBLEMS  that seasonal workers face include: </li></ul><ul><li>JOB (and therefore inco...
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Economic

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Economic

  1. 2. ECONOMIC IMPACTS OF TOURISM
  2. 3. ECONOMIC IMPACT <ul><li>study of the economic effects of the 'shocks' to the system caused by climatological, environmental, physical, and other changes </li></ul>
  3. 5. POSITIVE ECONOMIC IMPACTS OF TOURISM <ul><li>Foreign exchange earnings </li></ul><ul><li>Contributions to government revenues </li></ul><ul><li>Employment generation </li></ul><ul><li>Infrastructure investment </li></ul><ul><li>Contribution to local economies </li></ul>
  4. 6. FOREIGN EXCHANGE EARNINGS <ul><li>Proceeds from the export of goods and services of a country, and the returns from its foreign investments, denominated in convertible currencies </li></ul><ul><li>Tourism is one of the top five export categories for as many as 83% of countries and is a main source of foreign exchange earnings for at least 38% of countries. </li></ul>POSITIVE IMPACT
  5. 7. CONTRIBUTION TO GOVERNMENT REVENUES <ul><li>DIRECT CONTRIBUTIONS </li></ul><ul><li>are generated by taxes on incomes from tourism employment and tourism businesses, and by direct levies on tourists such as departure taxes. </li></ul><ul><li>INDIRECT CONTRIBUTIONS </li></ul><ul><li>come from taxes and duties levied on goods and services supplied to tourists. </li></ul>POSITIVE IMPACT
  6. 8. <ul><li>The rapid expansion of international tourism has led to significant employment creation. </li></ul><ul><li>Tourism can generate jobs directly through hotels, restaurants, nightclubs, taxis, and souvenir sales, and indirectly through the supply of goods and services needed by tourism-related businesses. </li></ul>EMPLOYMENT GENERATION POSITIVE IMPACT
  7. 9. INFRASTRUCTURE INVESTMENT <ul><li>Tourism can induce the local government to make infrastructure improvements such as better water and sewage systems, roads, electricity, telephone and public transport networks </li></ul><ul><li>This can improve the quality of life for residents as well as facilitate tourism. </li></ul>POSITIVE IMPACT
  8. 10. CONTRIBUTION TO LOCAL ECONOMIES <ul><li>As the environment is a basic component of the tourism industry's assets, tourism revenues are often used to measure the economic value of protected areas . </li></ul><ul><li>Other local revenues that are not easily quantified, as not all tourist expenditures are formally registered. </li></ul><ul><li>Money is earned from tourism through informal employment (e.g. street vendors, informal guides, rickshaw drivers) </li></ul>POSITIVE IMPACT
  9. 11. <ul><li>The positive side of informal employment is that the money is returned to the local economy, and has a great multiplier effect as it is spent over and over again. </li></ul><ul><li>The WTO estimates that tourism generates an indirect contribution equal to 100% of direct tourism expenditures. </li></ul>CONTRIBUTION TO LOCAL ECONOMIES POSITIVE IMPACT
  10. 13. NEGATIVE ECONOMIC IMPACTS OF TOURISM <ul><li>Leakage </li></ul><ul><li>Enclave tourism </li></ul><ul><li>Infrastructure cost </li></ul><ul><li>Increase in prices </li></ul><ul><li>Economic dependence </li></ul><ul><li>Seasonal character of jobs </li></ul>
  11. 14. LEAKAGE <ul><li>LEAKAGE is the non-consumption uses of income, including saving, taxes, and imports </li></ul><ul><li>Economic Leakage occurs when all of the foreign currency earned through tourism does not remain within the host country </li></ul><ul><li>In most all-inclusive package tours, about 80% of travellers' expenditures go to the airlines, hotels and other international companies, and not to local businesses or workers. </li></ul>NEGATIVE IMPACT
  12. 15. 2 MAIN WAYS THAT LEAKAGE OCCURS <ul><li>IMPORT LEAKAGE </li></ul><ul><li>occurs when tourists demand standards of equipment, food, and other products that the host country cannot supply. </li></ul><ul><li>* Much of the income from tourism expenditures leaves the country again to pay for these imports. </li></ul>
  13. 16. <ul><li>EXPORT LEAKAGE </li></ul><ul><li>an export leakage arises when overseas investors who finance the resorts and hotels take their profits back to their country of origin. </li></ul><ul><li>* Often, especially in poor developing destinations, they are the only ones that possess the necessary capital to invest in the construction of tourism infrastructure and facilities . </li></ul>2 MAIN WAYS THAT LEAKAGE OCCURS
  14. 17. SOURCES OF LEAKAGE <ul><li>imports of materials and equipment for construction; </li></ul><ul><li>imports of consumer goods, particularly food and drinks; </li></ul><ul><li>repatriation of profits earned by foreign investors; </li></ul><ul><li>overseas promotional expenditures and </li></ul><ul><li>amortization of external debt incurred in the development of hotels and resorts. </li></ul>
  15. 18. ENCLAVE TOURISM <ul><li>ENCLAVE </li></ul><ul><li>describes an area of a country, region or city that is occupied by people ethnically or culturally distinct from their neighbors. </li></ul><ul><li>ENCLAVE TOURISM </li></ul><ul><li>refers to geographically isolated and closed-off resorts containing all tourism facilities and services required by tourists, and thus encouraging them to stay inside and spend within the compounds of the enclave . </li></ul>NEGATIVE IMPACT
  16. 19. <ul><li>Local businesses often see their chances to earn income from tourists severely reduced by the creation of &quot;all-inclusive&quot; vacation packages. </li></ul><ul><li>When tourists remain for their entire stay at the same cruise ship or resort, which provides everything they need and where they will make all their expenditures, not much opportunity is left for local people to profit from tourism. </li></ul>ENCLAVE TOURISM
  17. 20. INFRASTRUCTURE COST <ul><li>Tourism development can cost the local government and local taxpayers a great deal of money. </li></ul><ul><li>Developers may want the government to improve the airport, roads and other infrastructure, and possibly to provide tax breaks and other financial advantages, which are costly activities for the government. </li></ul><ul><li>Public resources spent on subsidized infrastructure or tax breaks may reduce government investment in other critical areas such as education and health. </li></ul>NEGATIVE IMPACT
  18. 21. <ul><li>Increasing demand for basic services and goods from tourists will often cause price hikes that negatively affect local residents whose income does not increase proportionately. </li></ul><ul><li>Tourism development and the related rise in real estate demand may dramatically increase building costs and land values. </li></ul><ul><li>This makes it more difficult for local people to meet their basic daily needs. </li></ul>INCREASE IN PRICE NEGATIVE IMPACT
  19. 22. ECONOMIC DEPENDENCE OF THE LOCAL COMMUNITY ON TOURISM <ul><li>DIVERSIFICATION in an economy is a sign of health, however if a country or region becomes dependent for its economic survival upon one industry, it can put major stress upon this industry as well as the people involved to perform well. </li></ul><ul><li>Over-reliance on tourism carries risks to tourism-dependent economies. Economic recession , the impacts of natural disasters such as tropical stor ms and changing tourism patterns can all have a devastating effect. </li></ul>
  20. 23. SEASONAL CHARACTER OF JOBS <ul><li>PROBLEMS that seasonal workers face include: </li></ul><ul><li>JOB (and therefore income) insecurity </li></ul><ul><li>no guarantee of employment from one season to the next </li></ul><ul><li>difficulties in getting training, employment-related medical benefits, and recognition of their experience </li></ul><ul><li>unsatisfactory housing and working conditions. </li></ul>NEGATIVE IMPACT
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