Economic impacts of tourism

1. Economic
Impacts of
Tourism
PRESENTED BY,
SURYA ROSE K JOHNSON

2. Tourism is the one of the most important
aspect for
developing countries.
Both domestic and international tourism
must be
considered to evaluate the impact of tourism
on the
economy
To the host region/area travel provides a
basis for developing tourism as an export
industry, which means that the level of
economic activities of the area shall increase

3. Change in sales, income and jobs because
tourists came to the community and spent
money there

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7. It generates extra revenue for the country through:
Airport
Hotel taxes
Electricity
Water supply
Entrance fee

9.  The flow of money generated by tourist spending multiplies
as it passes through various parts of the economy.
 The multiplier is an income concept. The concept:
the ‘multiplier’ measures the impact of extra expenditure
introduced into an economy by a person

11. In the study of tourism, the leakage is the way in which
revenue generated by tourism is lost to other countries'
economies. Leakage may be so significant in some
developing countries that it partially neutralizes the money
generated by tourism.
Leakage occurs through seven different mechanisms:
 Goods and services
 Transfer pricing
 Foreign workers
 Infrastructure
 Promotional expenditures
 Tax exemptions
 Foreign factors of production

12. Remain for their entire stay at the same crui
ship or
resort, which provides everything they need a
where
they will make all their expenditures, not mu
opportunity
is left for local people to profit from tourism.
It creates a controlled tourist environment:
All inclusive holidays
Self-contained resorts
Fenced up boundaries
Little/ almost no tourist- local interactions.

13.  Tourism development can cost the local
government and local taxpayers a great deal
of money.
 Developers may want the government to
improve the airport, roads and other
infrastructure. Possibilities to provide tax
breaks and other financial advantages which
are costly activities.
 Public resources spent on subsidized
infrastructure or tax breaks may reduce
government investment in other critical
areas such as education and health.

14.  Many countries have embraced tourism as the single
most important way to boost their economy.
 This has made them very vulnerable to anything that
negatively affects the local tourism industry (e.g.
terrorist scares, military conflicts, impacts of natural
disasters) have a devastating effect on overall
economic climate.
 The Turkish economy for example has suffered a lot
because of the war in Iraq at the beginning of the
twenty-first century.

15. Increasing demand for basic services and goods fr
tourists will often cause price hikes that negative
local residents whose income does not increase
proportionately.
Tourism development and the related rise in real e
demand may dramatically increase building costs
values.
This makes it more difficult for local people to me
basic daily needs

16. The seasonal character of the tourism industry creates economic problems for
destinations that are heavily dependent on it.
Problems that seasonal workers face include job (and therefore income):
 Insecurity, usually with no guarantee of employment from one
season to the next,
 Difficulties in getting training,
 Employment-related medical benefits,
 Recognition of their experience,
 Unsatisfactory housing and working conditions.

17. Tourism may be the only means of
promoting the economic advancement of
less developed areas lacking in other
resources
Many of the economically backward
regions contains areas of high scenic
beauty and of cultural attractions.
Tourist expenditure at a particular area
has the development of many areas
around it

18.  Tourism emerged as a global phenomena in the
1960’s and the potential for tourism to
generate economic development was widely
promoted by national governments
 Tourism development focusses on national and
regional master planning
 Tourisms present excellent opportunities for
developing entrepreneurship, for staff training
and progression and for the development of
transferable skills

19. It has been cited as major contributor to
international goodwill and as prime means of
developing social and cultural understanding
among all peoples of the world
Tourism helps to breakdown prejudices values
and suspicions that exit between nations
It is an important medium of social and cultural
development and also promoting lasting goodwill
and friendship among the nations