TRAVEL AND TOURISM

IMPACT OF TOURISM ON ECONOMY

Teacher In-charge:Dr. Mahesh Lavate NAME- MRUGAJA KAMBLE
Date of Submission - 12th October 2020 CLASS- SYBMS/D
ROLL NO. - 34
 DEFINITION OF TOURISM?

 The word tourist has been originated from the Latin word “TOURNUS”
which means a tool for describing a circle or a turner’s wheel . In this
sense a tourist is a person who undertakes a circular trip i.e. ultimately
coming back to the place from where he sets out his journey.
 Tourism is a phenomenon with no universally accepted definition, owing to
complexity and individualism of travelers and activities they undertake.
 The official definition of The United Nations World Tourism Organization
(UNTWO) is “ Tourism comprises the activities of persons traveling to and
staying in places outside their usual environment for not more than one
consecutive year for leisure, business and any other purpose.
 IMPACTS OF TOURISM ON ECONOMY

 The impact of tourism is the outcome of tourism development in an

area.
 The impact can be both- positive and negative.
 Positive impact includes rising income, employment, multiplier
effect, higher GDP growth, reduction of balance of payment
deficits, and poverty alleviation to a certain extent.
 The negative impacts includes displacement effect, demonstration
effects, carrying capacity issues, and environmental issues.
 Business that produce or
provide products services
Direct impacts directly to the travelers.
e.g.- Airline tickets, hotel rooms,
Impacts of tour guides.
tourism on
economy
Support business that provides
Indirect goods or services to tourism.
impacts e.g.- Food purchased for
restaurants.
 Positive impacts of tourism on
economy
 Foreign exchange
1. Tourism is one of the top five export categories for as many as 83% of
countries and is a main source of foreign exchange earnings for at least
38% of countries.
2. Tourism may befit the developed world more than the developing world.
 Infrastructure development and service enhancement
1. Tourism may be economic agent responsible for developing infrastructure
to certain extent in order to provide better services to the travelers.
 Taxes and employment
1. Government revenues- direct and indirect contributions.
2. Increase in employment opportunities.
a) Creates job opportunities.
b) Generates business opportunities.
 NEGATIVE IMPACRTS OF TOURISM ON
ECONOMY
 Infrastructure cost
1. Public resources spent on subsidized infrastructure or tax breaks may
reduce government investment in other critical areas such as education
and health.
 Increase in prices
1. Rise in land value with a concurrent rise in property taxes.
2. Tourism can create jobs but can also lead to inflationary pressure- level of
labor supply.
3. higher prices for consumer goods.
 Economic dependence of the local communities on tourism.
1. Vulnerability to shifts in in International demands.
 Seasonal characters of jobs.
 Enclave tourism
 POSITIVE IMPACTS
 Foreign exchange
 Employment opportunities
 Infrastructure development
 Service enhancement
NEGATIVE IMPACTS
 Infrastructure cost
 Increase in prices
 Seasonal characters of the jobs
 Enclave tourism
 CASE STUDY- KERALA

 The coconut lagoon was one of the earliest project to be implemented in

Kunarakom in the Kottayam district.
 At the time of implementation, the surrounding community was largely
rural, dependent on their farms.
 Total costs- 3.5 crores- local resources( land, labor) utilized.
 50 rooms property = 90 people employed.
 Tourists visited local spice farms.
 The farmer was paid Rs. 50 a day for a day’s experience.
 Tourists also bought the spices and the farmers mad approximately Rs.
1000 per day.
 Money earned by farmer increased his standard of living.
 CONCLUSION

 Tourism has a great potential in generating employment (direct and

indirect).
 It is economically beneficial for a nation to have more of inbound travelers
than outbound travelers.
 The tourism industry generates substantial economic benefits to the host
country.
THANK YOU