Economic Impact Of Tourism
Being the largest growing industry in the world, it is but natural to discuss and understand the economic impact of tourism at all levels regional, national and local. Job generation, foreign exchanges earnings, development of infrastructure, etc., are cited as positive economic impact. Both the government as well as the industry highlight the benefits for a variety of reasons and stress upon the multiplier benefits and positive economic impact. At the same time, critics point out that these benefits will be there only if there are no leakages in the economy. And this brings in the question of costs. There is an ongoing debate in this regard and various dimensions have emerged in this context. The methodology of comparative studies and analysis, satellites accounting measures, etc. have added to this debate. For certain redone questions have been asked like if not tourism than what else, etc.
Characteristics of Economic Impact Of Tourism
The world tourism organization document lists six major areas of economic benefits of tourism.
- Export Earnings: International tourism being the world’s largest export earner, for many countries it is important as far as the balance of payments is concerned.
- Employment: Tourism employs about 100 million people in the world. It is considered as a job creator with multiplier effects. The jobs are mainly in small, medium sized and family-owned enterprises. Job creation in tourism is growing one and a half times faster than any other industrial sector.
- Rural Opportunities: By creating jobs in the underdeveloped regions, tourism helps to equalize economic opportunities throughout the country and provides an incentive against migration to cities.
- Infrastructure Investment: It stimulates investment in new infrastructure developments that improve the living conditions in the region where the projects are taken. Tourism development projects include airports, roads, civic systems and restoration of cultural monuments, etc.
- Tax Revenues: The tourism industry provides governments the huge tax revenues through the taxes levied on accommodation, restaurants and carious forms of fees, etc.
- Gross Domestic Product. International and domestic tourism combined generate up to 100 per cent of the world’s GDP and a considerably higher share in many small and developing nations.
Federally, the economic benefits of tourism are highlighted from the point of view of the tourism industry and the governments. However, critics mention that every thing is not good as far as economic impact is concerned. It highlights of factors like heavy Infrastructure costs and leakages in the economy by spending on imports, etc. whatever may be the arguments in both sides, there is no doubt that economic impact of tourism has a bearing on national, regional and local economies and the needs to be analyzed.