Differentiate the difference among direct, indirect, induced, and dynamic impacts of tourism on the economy;Identify the positive and negative impacts of tourism on the economy.

1. TOURISM IMPACTS
on the ECONOMY
CRIS EDREN L. DELA PENA, MBA-TRM
College of Business Administration
University of the Visayas

2. DIRECT, INDIRECT,
DYNAMIC
IMPACTS
• Direct effects – are produced when tourists spend for such
commodities as accommodation, transportation,
entertainment, and attractions.
• Visitor exports – refer to spending by international tourists in a
country.
• Induced effects – are the collective spending by direct and
indirect employees on food and beverage, recreation,
clothing, housing, and household goods.
• Dynamic effects – refer to the longer-term macro-level effects,
such as general enhancement skills within the economy,
provision of better social services, and infrastructure.

3. Beneficial Impacts
of Tourism
on the Economy
• JOBS
• Tourism generates jobs, with the most optimistic estimate
being one job created for every tourist received by the
country.
• Value chain – refers to the suppliers of needed inputs for
tourism operations, as well as the other entities that benefit
indirectly from tourism development.

4. Beneficial Impacts
of Tourism
on the Economy
• LIVELIHOOD GENERATION
• Farming opportunities can venture into agritourism.
• Tourism and travel-related businesses support an ecology
of several other smaller operations.
• Special interest tourism activities provide significant
economic returns.
• Video – Cebu Big 5
• Video – Bicycle Tourism

5. Beneficial Impacts
of Tourism
on the Economy
• Hometown’s Share of Tourism Income
• The tourists’ places of origin and transit routes, which
include areas used as pit stops by travelers, take sizeable
chunk of travel and tourism-related expenditure.
• Items bought at their places of origin prior to the trip
• Residual spending
• Tourists’ spending at the destination
• Transit zones or pit stops

6. Beneficial Impacts
of Tourism
on the Economy
• TAXES and FEES
• How does the government earn from tourism?
• Passport processing fee
• Fees for NSO
• Certificates required for securing passport
• Travel tax
• Documentation fee for travel tax exemption
• Airport terminal fee
• Airport space rental fees
• Parking fee
• Value-added tax from tourism-related businesses
• Business permit fees
• Barangay clearance
• Taxes paid by employees in tourism establishments

7. Negative Impacts
of Tourism
on the Economy
• LEAKAGE
• POOR QUALITY OF JOBS
• PRICE INCREASE
• OVERDEPENDENCE
• OPPORTUNITY COST

8. Determinants of
Economic Impact
• The size of the multiplier effect from tourism spending is
dependent on how much money is retained in the host
community.
• The presence of organizers or tour operators that
integrate all the tourism supplies into a tour.
• Seasonality
• The quality of human resources has a certain effect on
the employment potential.
• Women agency or women empowerment

9. Determinants of
Economic Impact
• Agglomeration can lead to uneven distribution of
benefits and costs of tourism.
• Management
• Physical and social carrying capacity
• The capacity of the tourist destination to
absorb tourism before negative impacts are
felt by the host community
• The capacity of the tourist destination to attract
and satisfy tourists before negative impacts are
felt by tourists.

10. Class Activity
Choose a place where one of the members visited
for tourism-related purpose in the past six months. List
down all items that were bought or paid for at the
traveler’s (student’s) place of origin on the way to the
destination, and back; and the destination. Be as
specific as possible. For example, write “instant
noodles” instead of just “food.”
Write the items, under the columns for Place of Origin
(prior to trip); Place of Origin (after the trip); Transit
Zones / Pit Stops (on the way back to place or
origin); the Destination.
Analyze the list in terms of their direct, and indirect,
economic impacts.

11. TOURISM IMPACTS
on the ECONOMY
CRIS EDREN L. DELA PENA, MBA-TRM
College of Business Administration
University of the Visayas