1.
INTRODUCTION
Tourism is the process where people from one place to another go for enjoyment and
spendthe time. It play great role for the development of a country. Through tourism
demand of different commodities increasing and different cultures of the world are
homogenized in one culture. On one side development occurred but on the other side
different diseases are transferred from one country to another in the world. In real sense
the tourism industry is link with every sector of the economy in the world which
positively and negatively affects the GDP of the country.
Through tourism industry many employments were generated which play great role in
poverty reduction and socioeconomic improvement of the world. Tourism improves the
trade of the country and also boosts the industrial sector of the world. There are so
many factors which attract the visitors to their country which push the tourism industry in
the world. Among these factors natural beautification and historical placesplay great role
in tourism industry development. Similarly security and peace also play great role in this
sector development.
Recently tourism was highly damaged by militancy in Pakistan in 2008 and 2009. Due
to terror the foreigner never entered to Pakistan because every time people were killed
by militant and they have spread terror everywhere in the country. Such type panics
were also present in Afghanistan and Sirilanka. So tourism industry need complete
peace and without peace tourism industry development is impossible. Every country of
the world try to develop tourism for economic improvement of the country. Recently
corona virus has created great problem for tourism development. All world countries
have imposed emergency and no one is allow to go to another country due to corona
virus spreading. They have sealed their boundaries and also people have lock down at
their home and no one cannot come out from their home because of this presently
tourism industry has totally damaged the global economy.
Tourism multiplies the vision of the people because they carried new idea to other
countries of the world which play great role in the development of a country. Tourism
mostly improves socioeconomic condition of the rural people. For natural scene the
tourist come while they purchase different commodities of that area on high price and
through this way their area cottage industries have been developed and the people earn
more money through tourism. So tourism on one side improves socioeconomic
condition of the world while on the other side their privacy have been leaked which is
transferred to other countries of the world. Similarly one country disease spread from
one country to the whole world such like corona virus which was spread from Wuhan
China to the whole world countries which have now crashed the global economy and no
world economy has been escaped from corona virus.
China has huge business and it is connected to the whole world business trade. Now by
this virus all sectors have been closed for solution of this problem. Similarly the oil price
goes down in the world and now other cracked down possibility is also possible. So
tourism gives benefit to the world community while sometime create panic in the world
and crash the world economy. Seeing to its importance the present study was arranged
to examine the factors which affect the tourism industry in the world and to know its
impact on the global economy of the world.
2. METHODS AND MATERIAL
The universe of the study is the whole world. Total 18 articles were downloaded from
the net and read many times in depth and analyzed the situation what factors affect the
tourism industry in the world and how tourism industry affect the global economy
negatively and positively in the world. The major variables which affect the tourism are
as Peace, Natural Beautification, Transportation facilities, Hospitality, Good attitude,
Historical places etc.
3. LITERATURE OF THE PAST ABOUT TOURISM INDUSTRY
Ohlan (2017) analyzed that tourism and economic growth has great relationship in
short and in long
run, So tourism play great role in the development of a country. It is necessary for
government to promote tourism and provide favorable environment to tourism because
it play great role in
employment generation in the country. Tourism further improve socioeconomic
condition of the
country.
Kreag (2001) explained that tourism growth increase the interest of the community
which further
increase tourism value in the [Link] tourism industry create economic
activities in the
country which further push the income level of the country and give prosperity to the
nation because
it generate employment in the country. It is a goose which not only lays a golden egg,
but also fouls
in its own nest. (Hawkins, 1982)
[Link]
Adrain (2017) told that tourism has close relationship with other branches of economy
because tourism increase the demand of the commodities through foreigner population
which further push the industrial development in the country and solve the problems of
the employment. So tourism industries not only develop the other industries but also
spread their goods in the world and increase the demand of these good. Through this
way not only industries are multiplied in the country while culture homogenization also
occurred in the world. One culture diffused in the other cultures which sometime also
give loss to the communities. So tourism on one side improve the socioeconomic
condition while on other side create social changes in the communities may be positive
or negative.
Businesses and public organizations are increasingly interested in the economic
impacts of tourism at national, state, and local levels. One regularly hears claims that
tourism supports X jobs in an area or that a festival or special event generated Y million
dollars in sales or income in a community. “Multiplier effects” are often cited to capture
secondary effects of tourism spending and show the wide range of sectors in a
community that may benefit from tourism. Tourism’s economic benefits are touted by
the industry for a variety of reasons.
Claims of tourism’s economic significance give the industry greater respect among the
business community, public officials, and the public in general. This often translates
into decisions or public policies that are favorable to tourism. Community support is
important for tourism, as it is an activity that affects the entire community. Tourism
businesses depend extensively on each other as well as on other businesses,
government and residents of the local community.
Economic benefits and costs of tourism reach virtually everyone in the region in one
way or another. Economic impact analyses provide tangible estimates of these
economic interdependencies and a better understanding of the role and importance of
tourism in a region’s economy. Tourism activity also involves economic costs, including
the direct costs incurred by tourism businesses, government costs for infrastructure to
better serve tourists, as well as congestion and related costs borne by individuals in the
community.
Community decisions over tourism often involve debates between industry proponents
touting tourism’s economic impacts (benefits) and detractors emphasizing tourism’s
costs. Sound decisions rest on a balanced and objective assessment of both benefits
and costs and an understanding of who benefits from tourism and who pays for it.
Tourism’s economic impacts are therefore an important consideration in state, regional
and community planning and economic development. Economic impacts are also
important factors in marketing and management decisions. Communities therefore need
to understand the relative importance of tourism to their region, including tourism’s
contribution to economic activity in the area.
A variety of methods, ranging from pure guesswork to complex mathematical models,
are used to estimate tourism’s economic impacts. Studies vary extensively in quality
and accuracy, as well as which aspects of tourism are included. Technical reports often
are filled with economic terms and methods that non-economists do not understand. On
the other hand, media coverage of these studies tend to oversimplify and frequently
misinterpret the results, leaving decision makers and the general public with a
sometimes distorted and incomplete understanding of tourism’s economic effects.
How can the average person understand these studies sufficiently to separate good
studies from bad ones and make informed choices? The purpose of this bulletin is to
present a systematic introduction to economic impact concepts and methods. The
presentation is written for tourism industry analysts and public officials, who would like
to better understand, evaluate, or possibly conduct an economic impact assessment.
The bulletin is organized around ten basic questions that either are asked or should be
asked about the economic impacts of tourism.
This report is an analysis of the effects of the global economic crisis on the employment
of poor and vulnerable groups in the tourism sector. The 2008–2009 global economic
crisis has severely impacted on international tourism, causing a decline of 4% in
international tourist arrivals and a decrease of international tourism revenues by 6% in
2009. Since tourism has become a major economic engine at a global level, this
deterioration had important impacts on various countries, and in particular in developing
countries, where the sector has become an increasingly relevant source of income and
employment.
During the last two decades, international tourism has been of rising importance
particularly among lower income countries, where tourism exports have become a
growing source of external income compared to other exporting sectors. According to
UNWTO data, tourism accounted for 45% of the exports of services of least developed
countries (LDCs) in 2009. In the same year, emerging economies received 410 million
international tourist arrivals, a 47% share of the global volume, and US$ 306 billion in
international tourism receipts equaling 36% of the global volume. Growing international
tourism receipts have strongly contributed to the global growth of GDP per capita.
Tourism’s economic development potential is advocated for its foreign exchange
earnings, government revenues, as well as the incorporation of local suppliers.
Furthermore, due to its labourintensive nature, tourism offers employment and income
opportunities, both directly and indirectly, for poor and vulnerable groups such as youth,
women, low-skilled and low-wage workers and migrant workers. In consequence,
tourism has been recognized as a main lever for poverty alleviation and the
achievement of the Millennium Development Goals (MDGs).
Based on these preconditions, the study at hand investigates how the decrease in
tourism demand in 2009 resulting from the global economic crisis impacted on
employment, income opportunities and the livelihood of poor and vulnerable groups, as
well as on the capacity of households to cope with such shocks. This evaluation allows
an insight into the ramifications of the crisis for the everyday life of people. Reflecting
the basic objective of the RIVAF programme, the present study combines a comparative
large-N macroeconomic analysis with three country case studies on the Maldives, Costa
Rica and Tanzania.
The purpose of the country case studies is to gain insights into the impact of the global
crisis on employment levels/opportunities and household incomes of low- and unskilled
tourism employees. The macro-economic analysis reveals that international tourism
within advanced economies has been much more affected than in emerging economies.
Growth of international tourist arrivals turned negative during 2009 across the globe with
the exception of low income countries. Apart from Africa, where growth rates remained
on a positive level, all regions experienced a negative growth of international tourist
arrivals in 2009. Countries with strong links to the European and North American source
markets were the most negatively affected.
Countries with more diversified source market basis have been comparatively less
affected by the decrease in international tourism during the global economic crisis. In
terms of tourism segments, business travel suffered the most. Compared to other
economic sectors, employment in hotels and restaurants was less impacted by the
global economic crisis. On average, growth of employment in the first quarters of 2009
was still positive, Negative growth of employment in hotels and restaurants has been
observed only among advanced economies, and by region in Europe and the Americas.
The most common policy responses to the crisis across regions and income groups
have been marketing, public/private partnerships and a combination of fiscal and
monetary measures. Policy measures in the field of marketing and promotional efforts
directed at European and North American source markets have been the most effective
short-term instrument for coping with the negative effects of the global economic crisis
on international tourism. While specific policy measures aimed at poor and vulnerable
groups within the tourism sector have rarely been implemented during the recent
economic crisis, a number of policy actions targeting international tourism demand hint
at indirect effects on these social groups.
Long term policies intended to further improve destinations’ global competitiveness, as
well as to make the sector more resilient to shocks are the most promising instruments
for absorbing the potential negative effects of similar crises in the future. The three case
studies demonstrate that the crisis had a particularly negative impact on poor and
vulnerable groups. The case studies Findings from the case studies carried out in Costa
Rica, the Maldives and Tanzania reveal that the decrease in visitor numbers as a result
of the global economic crisis had different impacts.
Each of the countries had to cope with a decrease of international tourist arrivals in
2009, ranging from 4% for the Maldives to 5% for Tanzania and 9% for Costa Rica. The
decrease in tourism receipts was even higher (8% for the Maldives, 9% for Tanzania
and 10% for Costa Rica), as arrivals, especially from high spending source markets
dropped (e.g. United States of America and United Kingdom), and tourists tended to be
more cost conscious and spend less time in the country.
The impact of such declines on the livelihoods of poor and vulnerable groups, as well as
the mitigation measure adopted also varied by country: In Costa Rica, the majority of
large chain hotels and domestic tour operators promptly reacted by implementing a
number of crisis-mitigating measures in order to reduce fixed costs, including layoffs,
reduced working hours and the enforcement of unpaid leave for two to three months.
Social insurance data show that 3% of the employees working in hotels and restaurants
in Costa Rica lost their jobs in 2009 and the overall tourism related work force declined
by around 4.5% (over 5,000 jobs). In addition, the remaining employees saw their
purchasing power reduced by an estimated 12% due to increased prices. Women and
low-skilled workers were comparatively more exposed to the negative effects of the
crisis than qualified personnel and male employees.
The ability of vulnerable groups to cope with the crisis was quite limited. Savings,
support from neighbors and the establishment of micro and small businesses helped to
face the difficult times, since most of the low-skilled people had problems finding a new
job during the economic downturn. The decline in tourism demand and spending in the
Maldives forced operators in the accommodation industry to adopt cost-reduction
strategies which significantly impacted on the labour market. Research showed that
1,477 foreign employees (44% of the foreign workforce in hotels and resorts), most of
them lowskilled workers from Bangladesh, India, Sri Lanka or the Philippines, lost their
jobs during the crisis.
Furthermore, an estimated 10% of the domestic labour force in hotels and resorts
(1,200 employees) was made redundant. In addition, reduced tourists’ spending
resulted in a significant decrease in the service charge, which is an important part of the
income for low-skilled workers, causing income losses of about 20 to 30% for
approximately 7,000 Maldivian tourism employees with low-skilled positions. Their
purchasing power further diminished due to an inflation of 17% between 2008 and 2009.
With an average household size of 6 to 7 persons, research estimates that
approximately 19% of the Maldivian population, and most of them belonging to poor and
vulnerable groups, got affected through job losses or income decreases in the tourism
sector, resulting in a significant reduction in purchasing power.
The case study in Tanzania focused on Mount Kilimanjaro and the Northern Safari
Circuit. Research showed that tour operation in these areas was less affected by the
crisis. Numbers declined by 2% in Kilimanjaro and by 9% in the Northern Safari Circuit,
most operators and hotels managed to increase package prices and room rates
throughout the crisis. Job losses have been more relevant for skilled and managerial
workers, yet there has still been a significant negative impact on unskilled labour,
especially seasonal workers.
This decline is most likely due to the increase in the minimum wages in January 2008,
and many employers might have used the crisis as an excuse to reduce the number of
unskilled workers and alter permanent contracts into short-term or seasonal contracts.
One group that saw their annual incomes significantly decline between 2008 and 2010
were the Kilimanjaro porters. Attracted by the higher salaries per expedition and limited
job opportunities in other sectors, the number of porters rose from 12,204 in 2008 to
20,590 in 2010. Together with a lower number of porters hired per expedition this
resulted in a sharp decline in the number of trips made per porter and their annual
income decreased by 50%.
The final group to have been impacted by the crisis was the small stall owners and
workers, a group of approximately 28,000 people, which showed a decrease in revenue
of around 25% throughout the crisis. Crisis mitigation measures. The report’s overall
recommendations deal with the public policy and business measures undertaken to
mitigate the impacts of the crisis. Possible crisis mitigating measures are distinguished
with regard to emphasizing: The need to advance the generation of tourism and
employment data and indicators, in particular short term data, in order to achieve a
more effective crisis monitoring.
This implies the expansion of basic tourism statistics at national level, the development
of the Tourism Satellite Account (TSA) and, in particular, the creation of short term
indicators of tourism performance and employment to serve as early warning indicators.
These could be derived from sources such as credit card records or tourism booking
trends (airlines, hotels). Such indicators could inform governments on the performance
of the sector and provide useful information to develop adequate and timely policy
responses.
In sum, particular attention should be given to: a) early warning systems; b) short-term
performance indicators of tourism’s industries’ turn-over and employment derived from
administrative, fiscal or social security records; and c) business cycle indicators derived
from business confidence surveys. Thereby, the study reveals that the system of
tourism and employment statistics needs to be accelerated in order to achieve more
effective crisis monitoring. The introduction of Tourism Satellite Accounts (TSA) and a
more complete and credible System of Tourism Statistics (STS) are crucial steps in this
regard.
Measures to improve the resilience of the tourism sector and accelerate the recovery
from decreases in tourism demand are essential to minimize pressure on tourism
related labour markets. Increased marketing activities, combined with efforts to diversify
market segments, including the development of the domestic market, would help
strengthen the sector. Infrastructural improvements, easing of visa regulations and
reducing bottlenecks for air access can also help facilitate tourism growth and recovery.
Measures to improve the resilience of the sector should be based on active
communication, consultation and collaboration between the public, private sector and
local communities. Specific measures should be taken to mitigate the impact of potential
crises on poor and vulnerable groups living from the tourism sector. Options to be
further studied include granting tourism companies additional liquidity to outbalance a
crisis-induced decrease of revenues in the short term and link credit conditions
employee retention schemes.
As tourism SMEs (small and medium sized enterprises) provide a large number of jobs
to poor and vulnerable groups, they should be given priority access to economic
recovery schemes offered by governments during crises situations. In times of crisis,
extra emphasis can be given to training, in particular for youth, women Copyright ©
2013, World Tourism Organization (UNWTO) and International Labour Organization
(ILO) UNWTO, 28 May 2013, for International Labour Organization, for internal use,
only. and lowerskilled workers, as they generally have a higher risk to become
unemployed.
In order to minimize shocks on low-income households, governments can also pay
particular attention to promoting equal distribution of tourism revenue, e.g. from national
parks, to improving working conditions of unskilled and low-skilled employees, and to
exploring possibilities to introduce and improve social insurance schemes. Furthermore,
communication between public and private sector should be improved in order to
advance crisis monitoring and coordinate crisis reaction plans.
Measures that impact indirectly on the tourism labour markets by improving the overall
crisis resilience of the tourism sector and by accelerating recovery from decreases in
tourism demand are also strongly encouraged. Specifically, measures intended to
diversify the generating markets and segments appear to be a promising means to
reduce risks. Increasing marketing efforts, strengthening public and private sector
partnerships, implementing the measures advocated by UNWTO Roadmap for
Recovery, including the protection and support of SMEs, infrastructural development,
travel facilitation including easing of visa regulations, reducing bottlenecks on air access
and increasing promotion of domestic tourism can help stabilize and enhance future
tourism demand.
Finally, on the implementation of measures intended to directly impact on poor and
vulnerable groups the report focuses on issues such as the evaluation of tourism related
taxes, as well as ways to facilitate the granting of loans as tools to further release
pressure on the sector and mitigate crisis impacts on the levels of employment.
Additional education and vocational training programmes, especially for the youth and
women, and the implementation of social insurance schemes are identified as ways that
would likely increase the capacities and assets of poor and vulnerable groups to cope
with external shocks, thus substantially reducing their vulnerability to poverty. In this
context, the Tanzanian case study revealed that increased development and
promotional activity for pro-poor tourism products may significantly help poor and
vulnerable groups to overcome crisis.
