Tourism’s Forward and Backward Linkages

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Tourism’s Forward and Backward Linkages

  1. 1. Tourism’s Forward and Backward Linkages<br />HTM571 Presentation (April 28)<br />Cai, Leung, and Mak (2006) JTR<br />Presented by Suh-hee Choi<br />
  2. 2.
  3. 3. Tourism Impact Analysis <br />Linkage Analysis<br />Final demand<br /><ul><li>Direct and indirect impacts</li></ul>Tourism sector<br /><ul><li>Strengths of the inter-sectional forward (FL) and backward (BL) relationships between the tourism sector and the non-tourism industries</li></li></ul><li>tourism-related sectors<br />important demander<br />non-tourism industries<br />less important demander<br />local<br />Forward Relationship : tourism as suppliers<br />regional<br />national<br />goods and services to tourists<br />Backward Relationship : tourism as demanders<br />input-output<br />Identifying the strength<br />
  4. 4.
  5. 5. Defining Tourism <br />No designated NAICS code<br />TTSA<br />Industries that sell a significant portion of their output to visitors<br />
  6. 6. (3)<br />(6)<br />
  7. 7. Hotels<br />Automobile rental<br />Amusement services<br />Apparel and accessory stores<br />Food service<br />Museums and historical sites<br />Other state and local government enterprises<br />Sightseeing transportation<br />Miscellaneous store retailers<br />Travel arrangement and reservation services<br />Department stores<br />Investigation and security services<br />Advertising<br />Support activities for transportation<br />
  8. 8. Interindustry Linkage Analysis<br />Individual linkages for each tourism-related industry<br />(Indices) <br />Share of total tourist spending <br />
  9. 9.
  10. 10. Measuring BL and FL<br />Backward Linkage Measure<br />Forward Linkage Measure<br />Leontief supply-driven multiplier (LSD) <br />(Cai and Leung, 2004)<br />Ghosh (1958) supply-driven multiplier (GSD) <br /><ul><li>An industry’s relationship with its upstream suppliers
  11. 11. To generate 1$ of sales in hotel, how much of production is needed by its suppliers?
  12. 12. Direct and indirect relationship with its downstream buyers </li></li></ul><li>Leontief Supply-Driven Multiplier<br /> x = A x+ f <br />direct<br />input<br />coefficient<br />matrix<br />output<br />final<br />demand<br />Partitioned I-O model<br />i: industry I / j: rest of the economy<br />
  13. 13. Backward-linkage from one unit of output change in industry i :<br />Industry i’s Leontief supply-driven multiplier (LSDi) :<br />initial unit output change<br />in industry i<br />summation <br />vector<br />
  14. 14. Ghosh Supply-Driven Multiplier as a Forward Linkage Measure<br /> x’ = x’ B+ w’ <br />output <br />vector<br />direct <br />output<br />coefficient<br />matrix<br />primary<br />input<br />Partitioned I-O model<br />
  15. 15. Forward-linkage impacts of the unit output change in industry i on the output of other industries:<br />Industry i’s Ghosh supply-driven multiplier:<br />
  16. 16. backward<br />forward<br />To produce $1 of output in the hotel industry, hotels use $0.412 of output produced directly and indirectly by other industries.<br />
  17. 17.
  18. 18.
  19. 19. Interindustry Linkages for Nontourism Component<br />average: 1.928 1.436 <br />
  20. 20. Interindustry Linkages for Nontourism Component<br />1$ of output sold for tourism use generated $0.928 of downstream sales, but the same dollar of output sold for nontourism uses generates only $0.436 of downstream transactions. <br />average: 1.928 1.436 <br />
  21. 21. Linkage between Tourism and Nontourism Components<br />Assumption : there are no relationships between the two.<br />In reality, they are related.<br />Linkage analysis does not address this issue. <br />
  22. 22. Conclusion<br />Linkage analysis helps us to understand tourism’s relationship to the other industries in an economy. <br />Forward linkages appear to be complicated when producing for tourism. <br />

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