Contributions of Tourism to Economic Development

Re-spending of tourism expenditures expenditure, such as payments to employees, payments to suppliers.

Induced Benefits

Additional income spending within a tourism destination, such as consumption of employees.

Multiplier Model of Tourism Revenue Turnover

Leakage: Tourism receipts leave the destination's economy.

Multiplier Effect

(Direct expenditures + Indirect Expenditures + Induced Expenditures) / Direct expenditures

Example:

Direct expenditures..... : $ 500

Indirect expenditures...: $ 300

Induced Expenditures. : $ 150

If direct expenditures $ 700, total effect will be $700 x 1.9 = $ 1330.

Input-Output Analysis

Analyzing industry relationships by tracking the flow of goods and services in an areas economy.

Sales of the total output of each sector

Total inputs from other sectors

Tourism Satellite Accounts

A satellite account re-organizes the national system of accounts to identify the contribution of tourism to a state or national economy.

Identify the benefit enjoyed by various tourism sectors of the economy and employment, income, taxes, and other benefits that flow from these sectors.

Provide a comprehensive picture of the size and scale of tourism in the country, thereby helping governments and businesses asses the value of tourism to the economy.

Cost Benefit Analysis

Potential Economic Benefits of Tourism

Increased income and standard of living

New employment opportunities

Increased tax base

Improved infrastructure and facilities

Increased resources for the protection of natural and cultural resources.

Potential Costs

Seasonal employment

Increased cost of living for residents

Increased traffic and congestion

Negative impact on cultural and natural heritage resources

Increased crime

Increased taxes

Leakage of revenue and dependency on imported goods and services

Monitoring Economic Impacts

Overall economic development of the destination

Analysis of the social, cultural, and environmental costs and benefits of tourism

Tourism development depend on more sophisticated understanding and documentation of the benefits and costs

Land values changes

Higher-price projects replace traditional and less profitable land uses

The local economy may have to rely on food imports due to limited land uses

Indicators in tourism monitoring

Establishing indicators that measure success and failure

Indicators are statistical devices that serve to measure conditions, such as the amount of air pollution in the area.

Site protection

Waste management

Consumer satisfaction

Overcrowding

Lack of safety

Loss of flora and fauna

Diminished water quality

Currency leakage

Fresh water shortage

Obstacles to Economic Development Through Tourism

Market Obstacles

Much of tourism activity is dependent on a variety of market factors, such as income levels, cost of fuel, job security, physical conditions, travel motivations.

Community Obstacles

Negative perception of tourism at the local level.

Environmental Obstacles

Protecting social and natural environments

Lack of Integration

Limited cooperation between many tourism business

Institutional Obstacles

Little public support

Employment and Training Obstacles

Limitation on training and education opportunities.

Facilitating Employment in the Tourism Sector

To take advantage of tourism as a form of economic development a number of programs and changes are necessary:

Better tourism planning and management practices

Coordination of activities

Improved cooperation between businesses and communities as well as between public and private sectors

The design and delivery of a wide range of tourism education and training opportunities

The provision of marketing and promotional assistance

More equitable access to employment, promotion, education and training for marginalized population groups