Download The tourism industry generates substantial economic benefits to

The tourism industry generates substantial economic benefits to both host countries
and tourists' home countries. Especially in developing countries, one of the primary
motivations for a region to promote itself as a tourism destination is the expected
economic improvement.
According to the World Tourism Organization, 698 million people traveled to a foreign
country in 2000, spending 478 billion dollars. International tourism receipts combined
with passenger transport reached 575 billion dollars.
The main economic impacts of tourism relate to foreign exchange earnings,
contributions to government revenues, and generation of employment and business
opportunities.
An important indicator of the role of international tourism is its generation of foreign
exchange earnings. Tourism is one of the top five export categories for as many as
83% of countries and is a main source of foreign exchange earnings for at least 38%
of countries.
Foreign exchange earnings
Tourism expenditures and the export and import of related goods and services
generate income to the host economy and can stimulate the investment necessary to
finance growth in other economic sectors. Some countries seek to accelerate this
growth by requiring visitors to bring in a certain amount of foreign currency for each
day of their stay.
Contribution to government revenues
Government revenues from the tourism sector can be categorized as direct and
indirect contributions. Direct contributions are generated by taxes on incomes from
tourism employment and tourism businesses, and by direct levies on tourists such as
departure taxes. Indirect contributions are those originated from taxes and duties
levied on goods and services supplied to tourists.
The World Travel and Tourism Council estimates that travel and tourism's direct,
indirect, and personal tax contribution worldwide was over US$ 800 billion in 1998 - a
figure it expects to double by 2010.
Employment generation
The rapid expansion of international tourism has led to significant employment
creation. For example, the hotel accommodation sector alone provided around 11.3
million jobs worldwide in 1995. Tourism can generate jobs directly through hotels,
restaurants, nightclubs, taxis, and souvenir sales, and indirectly through the supply of
goods and services needed by tourism-related businesses. According to the WTO,
tourism supports 7% of the world's workers.
Stimulation of infrastructure investment
Tourism can induce the local government to make infrastructure improvements such
as better water and sewage systems, roads, electricity, telephone and public
transport networks, all of which can improve the quality of life for residents as well as
facilitate tourism.
Contribution to local economies
Tourism can be a significant, even essential, part of the local economy. As the
environment is a basic component of the tourism industry's assets, tourism revenues
are often used to measure the economic value of protected areas.
The importance of tourism to local economies can also be illustrated by the impacts
when it is disrupted: the catastrophic 1997 floods that closed Yosemite National Park
in California cause locally severe economic losses to the areas around the park. In
the most heavily impacted county, Mariposa County, personal income was reduced
by 6.6%. The county was also estimated to have lost US$1.67 million in county
occupancy and sales tax revenues, and 956 jobs, a significant number in a county of
fewer than 16,000 residents.
To prove the enormous impact of tourism on the economy, let’s take Australia for an
example.
Tourism is one of Australia's largest industries. It accounts for $48.7 billion or 8.6% of
Australia's Gross Domestic Product. This represents a greater contribution than the
agriculture or communication services sectors.
As part of the international economy, tourism is a major force as it generates 11.2%
of Australia's total export earnings, more than traditional exports such as coal, iron
and steel products. It is forecast that tourism's export growth rate will outperform all
key sectors by 2004-2005. Tourism is an important economic driver. In Victoria, $11
billion was spent by domestic and international visitors in 1998.
Revised forecasts from the Tourism Forecasting Council predict international visitor
arrivals to Australia will reach 9.4 million by the year 2010. International visitors are
forecast to grow at an average annual rate of 6.6% over the next 10 years.
The Australian economy is fundamentally shifting from primary industry to a service
and knowledge base. The total number of jobs increased by 17.3% between 1986
and 1996.
Tourism can promote and facilitate economic activity that supports aspects of
regional life. For example, farm stays, cellar doors and the purchase of local produce
support agriculture, while the purchase of other products supports local retail and
industry. Tourism spending also has a multiplier effect in the local economy as it is
spent and re-spent by employers and employees.
Tourism may generate income for local government in the form of rates and levies or
as a result of patronage of local government owned attractions and services. This
income contributes to the quality and quantity of local services and facilities provided
for the benefit of both residents and visitors.
As we can see the tourism industry has significant impact and potential for job
creation, export earnings, and social cohesion. It is estimated that the role of tourism
in an economy will grow constantly in the next few years. So we can expect that
tourism will become one of the major industries all over the world.