Scribd
Upload
430 views17 pages

The Economics of Tourism Chapter 4

The document discusses the role of tourism in economic development. It notes that many developing countries have used tourism as an alternative for economic growth due to the continuous global demand for international travel and its income elasticity. The OECD has concluded that tourism provides major opportunities for economic growth in countries at intermediate development stages that need foreign exchange. Tourism differs from international trade in that consumers transport the product and eliminate freight costs, and demand depends on non-economic factors like politics and media coverage. Tourism is a multifaceted industry that directly and indirectly impacts many economic sectors and provides non-monetary social, cultural, and environmental benefits.

Uploaded by

Roy Cabarles
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
430 views17 pages

The Economics of Tourism Chapter 4

The document discusses the role of tourism in economic development. It notes that many developing countries have used tourism as an alternative for economic growth due to the continuous global demand for international travel and its income elasticity. The OECD has concluded that tourism provides major opportunities for economic growth in countries at intermediate development stages that need foreign exchange. Tourism differs from international trade in that consumers transport the product and eliminate freight costs, and demand depends on non-economic factors like politics and media coverage. Tourism is a multifaceted industry that directly and indirectly impacts many economic sectors and provides non-monetary social, cultural, and environmental benefits.

Uploaded by

Roy Cabarles
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 17

2

Economics o
f Tourism
Chapter 4
11/02/2020
ROLE OF TOURISM IN ECONOMIC
DEVELOPMENT
Several developing countries have used
tourism development as an alternative to
help economic growth .
THE REASONS FOR THIS ARE :
1. There is a continuous dema
nd for international travel in
develop countries .

2.As income in developed coun


tries increases , the demand
for tourism also increases at
a faster rate .

3.Developing countries need fo


reign exchange to aid there
economic development

11/02/2020
The ORGANIZATION for ECONOM
IC COOPERATION and DEVELOP
MENT(OECD)

This organization has concluded that tourism pr


ovides a major opportunity for growth for count
ries that are the intermediate stage of economic
development and require more foreign exchang
e earnings.

11/02/2020
Tourism is an invisible export, which differs from
the international trade in many ways:

11/02/2020
1. In tourism , the con
sumer collects the pr
oduct from the expo
rting country, thereb
y eliminating the frei
ght costs for the exp
orter , except in case
s in which the airline
used are those of the
tourist receiving cou
ntry
11/02/2020
2. The demand for pleasure travel is largely depe
ndent on non-economic factors, such as:

• Local disturbances
• Political unrest
• Changes in fashionabilit
y of resorts/countries cr
eated mostly by media
coverage.
• Price elastic
• Income Elastic
This means that changes in price and
income will also change the dema
nd for pleasure travel .

11/02/2020
3. By using specific fiscal measures,
• The exporting or tourist receiving
country can manipulate exchang
e rates so that those for tourists a
re higher or lower (normally the l
atter is implemented in order to a
ttract large number of tourists ) t
han those in foreign trade market
s.
• Tourists are also allowed to buy in
domestic markets at the same pri
ce as the local residents (the exce
ptions are the duty-free tourist sh
ops operated in many Caribbean i
slands and elsewhere).

11/02/2020
4. Tourism is Multifaceted Industry
That directly affects several sectors i
n the economy such as:
• Shops
• Hotels
• Restaurants
• Local Transport Firms
• Entertainment Establishments
• Handicraft Producers

Indirectly affects many others such a


s:
• Equipment Manufacturers
• Utilities

11/02/2020
5. Tourism brings many more
NON -MONETARY BENEFITS and costs than ot
her export industries such as:
• Socials
• Cultural
• Environmental bene
fits

11/02/2020
ECONOMIC IMPACT
• When travelers outside the destination area spend on goods a
nd services within the destination, tourism acts as export indu
stry by bringing in revenues from outside sources.

• Tourists expenditures also increase the level of economic activ


ity in the host area directly.

• Many countries have utilized tourism as a means to increase f


oreign exchange earnings to produce investment necessary to
finance economic growth.

• Tourism’s economic impact in an area provides a source of in


come, employment, and foreign exchange.
Direct and Secondary Effects
• In order to measure the economic impact of tourism
on the destination area, it is important to know the d
irect and secondary effects of visitor expenditures on
the economy of the area.

• Tourists expenditures received as income by business


es such as hotels, restaurants, ca rentals, tour operat
ors, and retail shops serving tourists have a direct eff
ect on the economy of the host area.

11/02/2020
Direct and Secondary Effects
• The term direct means that the income is received di
rectly.

• Indirect or secondary effects mean that the money p


aid by tourists to businesses are in turn used to pay f
or supplies, wages of workers, and other items used i
n producing the products or direct services bought by
tourists.

11/02/2020
Tourism Multiplier
• The term multiplier is used to describe the tot
al effect, both direct and secondary, of an exte
rnal source of income introduced into the eco
nomy.

• Tourism multiplier or multiplier effect is used


to estimate the direct and secondary effects of
tourist expenditures on the economy of a cou
ntry.
11/02/2020
11/02/2020
THANK YOU FOR LISTENING ...

GODBLESS :)

11/02/2020

You might also like