MULTIPLIER

EFFECTS
OF
TOURISM
INDUSTRY
Tourism as the World's Largest Industry
The World of Tourism Council estimates that travel and tourism
provides employment for more than 100 million people
worldwide (that's one in sixteen workers) and is responsible for
over 7% of worldwide capital investment.
Multiplier Effect
This is known as the multiplier effect which in its simplest form is how many times
money spent by a tourist circulates through a country's economy. Money spent in a
hotel helps to create jobs directly in the hotel, but it also creates jobs indirectly
elsewhere in the economy.

•What is the simple definition of multiplier effect in tourism?

Applied to tourism, the tourism multiplier effect indicates the influence of national
income generated by the influence of the tourism expenditure on the activity of the
productive sectors. Almost all sectors of the economy benefit from the tourism incomes.

•Why is the multiplier effect important?

Understanding the formula for calculating a multiplier's effect helps measure the real
impact of changes in government investment. It also allows specialists to compare the
impact of different investments to determine what has been most valuable for the
economy.
•SUMMARIZED•
The multiplier effect in tourism refers to the impact of
tourism expenditure on a country's economy, affecting all
sectors. It indicates how much money circulates through the
economy, creating jobs both directly and indirectly.
Understanding this effect helps measure the real impact of
government investment and compare the value of different
investments.
Employment Opportunities
What Jobs Can You Get With a Tourism Management Degree?
As a qualified tourism manager, you can work in various jobs related to
the tourist industry. Some of these are:
Front desk clerk/receptionist
Events manager
Hotel or resortPLEASE
manager
Housekeeper ENTER A
Tour operator TITLE
Tourism marketing manager
Travel agency manager Click to view the next page

Tourist Information Centre manager

Accountant or sales manager
Guest relations manager
How Tourism Benefits Communities
Tourism undoubtedly is the best means to spread and promote
peace not only among nations but more precisely with in the
country to create better understanding and unity among its
citizens. One can ever understand the culture of people from other
regions of the country without spending time in such destination.
Economic Benefits
1. Jobs
Employment may be associated directly, such as tour guide
managerial position.
Economic Impact
The economic impact of tourism on a destination area is
enormous since it provides a source of income, employment and
foreign exchange. Tourist expenditures have direct and secondary
effects on the economy of a country.
2. Increased Spending
Tourism business can directly and indirectly promote the viability of
local businesses.

3. Economic Diversification
Economic diversification is, for many communities, an insurance
policy against hard times. By offering an additional means of
income, tourism can support a community when a traditional
industry is under financial pressure particularly where the
community relies heavily on a single industry.
Economic Benefits of Tourism
The main positive economic impacts of tourism relate to foreign
exchange earnings, contribution to government revenues,
generation of employment and business opportunities
.
1. Foreign Exchange Earnings
The export and import of all related income to the host.

2. Employment Generation
Creates local jobs and business opportunities, generates jobs
directly through hotels, restaurants, taxis, souvenir sales.

3. Contribution to the Government Revenue

For example the hotel accommodation sectors provided around 11.3
million jobs worldwide (1995). Government revenues from the
a. Direct Contribution - is derived from the taxes on incomes from
tourism.
b. Indirect Contribution - is derived from the taxes and duties on goods
and services supplied to tourist.

4. Stimulation of Infrastructure investment

Creating public transport network. All this can improve the quality of life
for residents as well as facilitate tourism.

5. Contribution to the Local Economies

Tourism can contribute directly to the conservation of sensitivePLEASE
areas
and habitats. ENTER A
TITLE
Economic Benefits

PLEASE
1. Helps diversify and stabilize the local economy.
ENTER Agovernments with extra revenues.
2. Provides
TITLE local jobs and business opportunities.
3. Creates

Farmers' Markets

Farmers' market is increasing economic development in regional areas.

Some of the benefits of farmers' markets include:
1. Showcase local produce and local products;
2. Encourage visitors from other areas;
3. Click
Showcase the local and regional areas;
to view the next page

4. Allow for community events to be incorporated;

5. Provide distribution opportunities for small businesses;
Contribute to the valuable economic development of the
area as money is spent locally.

Infrastructure
Infrastructure including roads, parks, and other public
spaces improved through tourism activity in a region
.
Social Benefits
Community identity and pride can be generated through
tourism activity in a region.
Environmental Benefits
Tourism, particularly ecotourism, can place a greater focus of the
conservation of natural resources through the recognition of their
importance to visitor experiences and their economic value to the
local community. Tourism provides a substantial proportion of the
money that supports our heritage and culture, and is one of the
main focuses for economic regeneration in many areas. It makes an
important contribution to the quality of life, supporting facilities and
services of the whole community. Providing in financial or in-kind for
the conservation of the local environment and natural resources will
enhance the reputation of any tourism business.
Conservation of Important Natural Areas
Mountains, caves and coral reefs are visited and appreciated by
domestic and foreign visitors.

1. Biological Conservation
Tourism has also been protecting plants and animal species.

2. Improvement of Environmental Quality and Enhancement of the

Environment

Tourists establishments to make themselves attractive.

3. Improvement of Infrastructure

Successful tourism bring appropriate infrastructure.

4. Increase of Environmental Awareness
Benefits in Making Community Engagement Work

Working with local communities does not necessitate complex and

costly activities. Activities build win-win partnerships with local.

Supporting the local Community Purchase locally

1. Purchase locally whenever possible food, fuel, equipment,
souvenirs and services;
2. Employ local residents;
3. Host community functions;
4. Sponsor local events, sporting teams, etc;
5. Sponsor local charities or community based organization;
6. Support community group clerical and business service support.
Educational Partnerships
1. Provide work for local resident, particularly for students
2. Make specialist equipment or staff expertise available to local
groups.
3. Speak at local functions and educational institutions.
4. Hold 'open days' for the community.

Responsible Product Development and Marketing

1. Incorporate opportunities local businesses, events or organizations
into local products of tourists.
2. Provide local community in your interpretive programs and
promotional
materials.
3. Provide the locals regular information updates business, photo
opportunities and media opportunities.
Best Practice
1. Benefit the local community as well as the local tourism industry.
2. Use environmentally friendly products or systems to local resources.
3. Educate clients on how they can also conserve local resources.
4. Incorporate interpretive best practice, encourage visitors decisions and
to purchase accredited tourism products.
5. Mentor new entrants to the local tourism industry.

Collaboration and Communication

1. Undertake direct consultation with the community
2. Cooperate with local Protected Area Managers
3. Work with your neighbors (adjoining property landholders) extend
local conservations initiatives on their own properties
4. Provide information results of local monitoring systems to other
operators and Protected Area Managers.
5. Ensure the local community is represented.
Infrastructure
1. Provision of maintenance of:
2. Public toilets
3. Visitor information center
4. Tourist information
5. Maps
6. Signage
7. Roads
8. Public parks and other public spaces

Provision of public Facilities on Private Land and Building:

1. Walking tracks
2. Picnic facilities
3. Toilet facilities
Funding for Tourism Community Projects

There should be Tourism Assistance Database (TAD) in very

governmental units that provides information on available funding
programs and sources of information and advice on tourism.

The Tourism Assistance Database provides:

1. information on relevant funding programs and grants for tourism and
tourism related industries; and
2. advise, hints and tips on submitting a funding application.
Impacts of Tourism to the Economy
Tourism can lead to economic development through direct and
indirect effects.

Economic Leakages
Several studies have pointed out that tourism industry generally
exhibits a high degree of leakage. Leakage generally created by
foreign ownership, interest payment on foreign loans and the
payment of the franchise and management fees to foreign
companies.

Economic Cost
Tourism development of infrastructure (airports, roads, etc.) can
cost the local government a great deal of money. May inflate
property values and price of goods and services.
Tourism Multiplier Effect
The multiplier effect continues until the money eventually 'leaks'
from the economy through imports- the purchase of goods from
other countries.

Environment Problems
From the earliest times, the enjoyment of environment-whether
defined in physical or in socio-cultural terms - has had a major
impact in shape a succession of tourism geographies.
Benefits and impacts of Tourism
Negative Impacts

1. Biodiversity Effect
Killing of animals for leisure (hunting) or to supply souvenir trade.
2. Resource Base
Depletion of ground and surface water
3. Pollution
Water pollution through sewage or fuel spillage and rubbish from
pleasure boat
4. Erosion Physical Damage
Overloading of infrastructure (water supply networks)
5. Visual Structural Change
Detrimental visual impact to natural and non-natural landscapes
through tourism development
Positive Impacts

1. Biodiversity
Encouragement to conserve animal as attractions
2. Erosion and Physical Damage Tourism revenue to finance ground
repair and site restoration.
3. Employment Opportunities
Tourism is a labor intensive industry and creates many job
opportunities, especially for young people and part-time and full-time
workers.
4. Diversification
Tourism can provide diversification, making the local economy less
reliant on a traditional base e.g agriculture and mining.
5. Opportunities for Business
Tourism creates opportunities for the establishment of new products,
facilities and services and expansion of existing businesses which
* Preservation of the Environment and Heritage
Tourism highlights the need for proper management and, through
effective policies and planning, can ensure that the environment,
heritage and inherent character of an area are preserved.
* The Catalyst for Residential Development
In many places, visitors who initially travelled to particular areas as
tourism, have relocated to those areas to become residents and
acquire a better quality of life.
* Improved Transport Services
Tourism can stimulate the establishment of new and improved
transport services to and within a regional area.
* A Broader Social Outlook
Tourism provides the opportunity for residents to interact with other
people and cultures and brings new ideas into the community.
How Tourism Benefits Communities

Tourism is one of the most effective ways of redistributing wealth, by

moving money into local economies from the other parts of the
country and overseas. It brings income into a community that would
otherwise not be earned.

Economic Benefits

1. Jobs - Employment may be associated directly, such as tour guide

or managerial positions; or in supporting industries like food
production or retail suppliers.
Economic Impact - The economic impact of tourism on a destination
area is enormous since it provides a source of income, employment
and foreign exchange.
 2. Increased Spending - Increased spending in the community
PLEASE
generated from visitors or tourism businesses can directly and
ENTER A promote the viability of local businesses.
indirectly
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3. Economic Diversification - is generally taken as the process in
which a growing range of economic outputs is produced.
Environmental Benefits

Conservation of important natural areas Biological conservation

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Improvement of environmental quality and enhancement of the

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environment Improvement of infrastructure Increase of

environmental awareness
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Supporting the Local Community

1. Purchase locally whenever possible - food, fuel, equipment,

souvenirs and services;

2 Employ local residents;

3. Host community functions;

4. Sponsor local events, sporting teams, etc.;

Thank you
classmate
s for
listening