This document discusses different types of tourism and their economic impacts. It defines inbound and outbound tourism for both international and domestic tourism. It then explains some of tourism's key economic effects, including generating income through wages, taxes, and business profits; creating employment opportunities both directly and indirectly; stimulating a multiplier effect through re-spending of tourism dollars in the local economy; and contributing positively to a country's balance of payments by bringing in foreign currency from international visitors. It notes that tourism is a major income generator for many countries and regions.

1. Types of Tourism and Impacts of TourismDr. Shweta Gaur

2. Types of TourismInternational Tourism – Understanding & definition of Inbound Tourism & Outbound Tourism; Domestic Tourism - Understanding & definition of Inbound Tourism & Outbound Tourism Dimensions of Tourism – economic significance, foreign exchange earnings, regional development, multiplier effect, employment generation, contribution to International goodwill and peace

3. Travel InsuranceNeed and Importance of travel Insurance, Air Travel Insurance, Baggage claim and insurance, Medical travel insurance

4. Types of TourismINTERNATIONAL TOURISMInbound TourismOutbound tourismDOMESTIC TOURISMInbound TourismOutbound tourism

5. TYPES OF TOURISM IN MTINTRABOUND DOMESTIC

6. Economic ImpactTourism is a powerful economic force providing employment, foreign exchange, income, and tax revenue. The generators of economic impact for a city, a state, a province, a country, or a destination area are visitors, their expenditures, and themultiplier effect

7. Economic ImpactsWe can say that incoming tourist spend is an export, while outgoing tourist spend is an import.Economic impact is measured in four ways:effect on income, on employment, on the area’s balance of payments andon investment and development

8. Effect on IncomeIncome is generated from wages and salaries,interest, rent and profits. In a labour intensive industry such as tourism, the greatest proportion is likely to be derived from wages and salaries paid to those working in jobs either directly serving the needs of tourists or benefiting indirectly from the tourists’ expenditure.

9. The total number of international arrivals reached 898 million in 2007, an increase of 52 million over 2006.Arrival of tourists is one of the indicators of their expenditure also.International receipts increased by $ 57 billion, for a 4.5 percent increase, very similar to the increase in arrivals

10. Receipts per arrival averaged $ 870. The Americas averaged the highest receipts per arrival at $ 1130, followed by Asia and the Pacifi c with an average of $ 920, Europe with $ 830, the Middle East with $ 660, and Africa with $ 590.Income will be greater in the areas which:generate large numbers of tourists, where visitors tend to stay for longer periods, where the destination attracts an up-market or more free-spending clientele, and where there are many opportunities to spend.Effect on Income

11. Tourism is the main income generator for one-third of the developing nations, It is also a major income generator in the Western world. In Britain, to take one example, tourism is of prime importance in areas where there is little industry, such as in the Scottish HighlandsEffect on Income

12. Income is also generated from interest, rent and profits on tourism businesses.This could include, for example, the interest paid on loans to an airline in order to buy aircraft, or rent paid to a landowner for a car park or campsite near the sea. Effect on Income

13. Taxation on tourism activities, such as value added tax (and occasionally additional room taxes) on hotel bills, duty and taxation on petrol used by tourists, and other direct forms of taxation which countries may choose to levy on tourists to raise additional public income. In Austria, to give one example, there is a Kurtaxe imposed on accommodation to raise money for the local authorityEffect on Income

14. EmploymentThe World Travel and Tourism Council estimates that in 2008, employment in the travel and tourism economy was 238,277,000 jobs or 8.4 percent of total employment which is 1 in every 11.9 jobs. By 2018, this should grow to 296,252,000 jobs, 9.2 percent of total employment or 1 in every 10.8 jobs.The 80,749,000 travel and tourism industry jobs accounted for 2.8 percent of total employment in 2008 and are forecast to rise to 97,983,000 jobs or 3.1 percent of the total by 2018.

15. Tourism provides both direct and indirect employment. Firms such as hotels, restaurants, airlines, cruise lines, and resorts provide direct employment because their employees are in contact with tourists and provide the tourist experience. Employees of firms providing goods and services to the direct employment firms, such as aircraft manufacturers, construction firms, and restaurant suppliers, create indirect employment.Employment

16. Multiplier EffectTourism’s contribution to the income of an area is enhanced by a phenomenon known as the tourism income multiplier (TIM). This arises because money spent by tourists in the area will be re-spent by recipients, augmenting the total. The multiplier is the factor by which tourist spend is increased in this process

17. The multiplier can be found by applying the formula: Multiplier = 1/ Proportion of leakagesSo in an economy with a high proportion of leakages, such as high tax rates (although we must remember that the government may choose to reinvest this tax money in the local economy, so much of it may not be lost for all time), or where many of the goods demanded by consumers are imported, TIM may be quite low, and the economy will not benefit greatly from tourismMultiplier Effect

18. Multiplier EffectLocal hotels may also be foreign owned, so that profits achieved are then transmitted to the hotel chain’s head office and so lost to the areaThis might be true of other tourist facilities in the area, and even local ground-handling agents or coach operators may be owned by companies based elsewhere, leading to further losses in the multiplier effect.Leakage is minimum when the firms are in the hands of the locals hence TIM is higher

19. LEAKAGESThe principal reasons for leakages include:cost of imported goods, especially food and drinkforeign exchange costs of imports for the development of tourist facilitiesremittance of profits abroadremittance of wages by expatriatesmanagement fees or royalties for franchisespayments to overseas carriers and travel companiescosts of overseas promotionadditional expenditure on imports resulting from the earnings of those benefiting from tourism.

20. Balance of paymentsInternational tourists are buying tourist services in another country, and these payments are noted in a country’s accounts as ‘invisibles’The money spent by an American visitor to Britain is credited to Britain’s balance of payments, becoming an invisible receipt for Britain, while it is debited as a payment against the American balance of paymentsThe total value of receipts minus the total payments made during the year represents a country’s balance of payments on the tourism account

21. It is always beneficial to have a large number of inbound tourists rather having bigger number of outbound travelers.Countries like Germany and Japan are struggling to increase inbound tourism as these were the countries producing a large number of tourists traveling to different countries.Italy and Spain are the examples of having a high number of tourists coming to their country hence high balance of payments.Balance of payments

22. ConclusionTourism has a great potential in generating employment (direct and indirect) Lesser the leakages from the economy greater is multiplier effect of the expenditure made in the local economy.TIM is very low for the developing countries as compared to the developed nations because of their dependency on imports of tourism products from outside.It is economically beneficial for a nation to have greater number of inbound travelers as compared to outbound.