Tourism is a significant industry for many countries around the world. Not only does it provide a source of revenue for local businesses, but it also contributes to the overall economy of a country. How Tourism Can Effect on Economy?
The effects of tourism on the economy are both direct and indirect, and understanding them is crucial for policymakers and businesses to make informed decisions. This article will explore the ways in which tourism affects the economy and the benefits it can bring.
(adsbygoogle = window.adsbygoogle || []).push({});Direct Effects of Tourism on the Economy
The direct effects of tourism on the economy are primarily related to the money spent by tourists during their visits. This includes money spent on accommodation, transportation, food and beverages, and souvenirs. According to the World Tourism Organization, the global tourism industry generated $1.7 trillion in direct revenue in 2019, making up 2.8% of the world’s GDP. This revenue is generates by both domestic and international tourists, with international tourists typically spending more than domestic tourists.
Tourism can be particularly beneficial to local businesses, such as hotels, restaurants, and tour operators. These businesses can benefit from increased demand for their services, and the money spent by tourists can help support their operations and create jobs. In some cases, tourism can even help to revitalize local economies that were struggling.
(adsbygoogle = window.adsbygoogle || []).push({});One example of the direct economic benefits of tourism is the impact it has on employment. According to the World Travel & Tourism Council, the global tourism industry supported 330 million jobs in 2019, making up 10.3% of all jobs worldwide. This includes both direct jobs, such as those in hotels and restaurants, and indirect jobs, such as those in the supply chain for these businesses.
How Tourism Can Effect on Economy?
Tourism can also have a direct impact on government revenue through taxes and fees. In many countries, tourism-related businesses are subject to special taxes or fees, such as hotel taxes or airport departure taxes. Additionally, tourists may pay sales tax on their purchases, which can contribute to government revenue. According to the United Nations, tourism generates around 10% of the global GDP and 10% of global employment. The direct economic benefits of tourism are significant, but they are not the only way in which tourism can affect the economy.
Indirect Effects of Tourism on the Economy
The indirect effects of tourism on the economy are more difficult to quantify, but they can be just as significant as the direct effects. These effects are related to the impact that tourism has on other industries and the overall economy.
One way in which tourism can have an indirect impact on the economy is through the multiplier effect. The multiplier effect refers to the additional economic activity that is generated as a result of tourism spending. For example, when a tourist spends money at a hotel, that money is then used to pay the hotel staff, who in turn spend their money on other goods and services. This creates a chain reaction of economic activity, with each dollar spent by tourists generating additional economic activity.
(adsbygoogle = window.adsbygoogle || []).push({});Another way in which tourism can have an indirect impact on the economy is through the development of infrastructure. In order to support tourism, countries may need to invest in infrastructure such as roads, airports, and public transportation. This investment can help to improve the overall quality of life for residents and can also benefit other industries by improving access to markets and resources.
Tourism can also have an indirect impact on the economy by promoting the development of new industries. For example, a country that is known for its natural beauty may attract tourists who are interested in outdoor activities such as hiking and camping. This can create a demand for outdoor gear and equipment, which can in turn lead to the development of new businesses that supply these products.
Final Thought
Tourism can have an indirect impact on the economy by promoting cultural exchange and understanding. When tourists visit a new country, they have the opportunity to learn about the local culture and history.
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