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Contributions of Tourism to Economic Development

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Contributions of Tourism to Economic Development

Economic Development and Tourism

Tourism has been seen as an important form of economic development.

It also promoted as an agent of an economic and social change

A service based industry capable of creating employment and income.

An important form of economic activity

The impact and role of tourism will vary from region to region.

Destinations can rise and fall in popularity.

Understanding Economic Impacts

Tourism in the Global Economy

1997 2007 Growth Jobs 262 Million 383 Million 68.4% GDP 3,3 Tr. USD 6,3 Tr. USD 52.4% Investments 801 Billion USD 1,5 Billion USD 53.4 % Taxes 716 Billion USD 1,3 Billion USD 55.1 %

1995 2000 2006 2020 Arrivals 567 million 698 million 842 million 1.560 billion Receipts 372 billion 500 billion 715 billion 1.600 billion Jobs 212 million 262 million ? 340 million (2005) Taxes 166 billion ? ?

Tourism in the National Economy

Tourism is a significant economic contributor to a nation's GNP.

Tourism impacts on KENYA's economy

Foreign exchange earnings from tourism are a significant percentage of gross receipts

Kenya 90%, Tunisia 6 %, Maldives 18 %, Barbados 32%.

Impacts of Tourism on Employment

1 in 9 workers worldwide (212 million people)

Tourism payroll $ 1.7 trillion (10.3 % of total payroll)

Provides direct and indirect employment

Year Direct Employment

% of Total Indirect Employment % of Total

Total 1991 4.9 5.3 10.2 1994 5.1 5.5 10.6 2005 5.4 5.9 11.3

Measuring Tourism Economic Impacts

Identifying Tourism Activity

Encompasses private and public sectors-transportation, accommodations, retail, food and beverage, reception, and convention centers.

Difficult to distinguish tourism activity from other economic activity.

Common standards are vital to make comparisons

Difficulty measuring industry: conflict on visitors-non-visitors

Tourism activity is best defined by a demand characteristics.

Structure of the Tourism Industry

Type of companies


Food service

Passenger transportation

Channelers (intermediaries)

Tourist activities

Tourism organizations

Direct, Indirect and Induced Benefits

Direct Benefits

Direct tourist expenditures for goods and services

Indirect Benefits

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