The Role of Tourism in the Economic Development

Introduction 3. Induced impact: It refers to sales, revenue, or employment

 Tourism is critical in creating goodwill among people generated by
and, as a result, socioeconomic growth in the country. household spending as a result of tourist spending income
Tourism as an industry contributes significantly to the (either directly or
country's foreign exchange reserves and provides direct indirectly). Consumption of businesses that gain directly or
and indirect job possibilities to a broad segment of the indirectly from early
population. investment in the tourist sector is likewise an example of an
 Tourism is a major source of foreign money for many induced impact.
developing countries. Tourism Highlights, according to (TIT) total impact of tourism = direct impact + indirect
UNWTO (United Nations World Tourism Organization impact + induced impact
or World Tourism Organization in short): Tourism
accounts for 9% of global GDP in 2014, according to the • Tourism as an industry is a major contributor to foreign
World Tourism Organization. Tourism is expected to exchange reserves in the
contribute 9.01 percent of total jobs (direct and indirect), country, providing a large proportion of the population with
or one out of every eleven new jobs produced. direct and indirect
work opportunities.
ELITE vs MASS TOURISM • In addition, it will promote the arts and crafts of a nation to
preserve the beauty
Elite tourism and mass tourism are two more types of tourism of nature, its cultural heritage and the history of land and to
that we encounter. advance the process
• An elite tourist travels with a self-contained mentality and is of national unity and global brotherhood. It is necessary to
always self contained. He might be an antiquarian, a distinguish between
naturalist, or an adventurer visiting locations that few people various kinds of tourism for analytical reasons
visit or are unfamiliar with.
• Mass tourism occurs when large numbers of people visit the Macroeconomic Problems Concerning Economy
same place at any one time. This includes sunbathing on a
beach, eg the Costa del Sol (Spain), skiing in the mountains 1. poor growth
such as the Swiss Alps, visiting a national park such as Loch 2. high unemployment
Lomond and the Trossachs (Scotland), or travelling to a theme 3. alarming inflation
park, eg Disney World in Florida.
Tourism is a significant potential growth sector, which helps
 The huge beneficial effect generated by the tourism to reduce economic
industry has compelled many nations to strengthen their hurdles by generating revenue, creating jobs, increasing
efforts in growing their tourism sector and gear up to household income, and
grab as much of the ever-expanding worldwide tourist impacting the balance of payment
market as possible. As economic development
accelerates, it will encounter a slew of new obstacles. Macroeconomic factor
The tourism industry emerged as a prevalent sector in recent
IMPACT OF TOURISM TO GDP decades in terms of
providing jobs, enhancing foreign exchange, increasing
Tourism’s economic impact has been classified into three government revenue,
categories: and declining poverty in the country.
direct impact,
indirect impact, 10 Roles of Tourism in Economic Development
induced impact
1. INCOME GENERATION: Tourism generated income
1 Direct impact: Changes in industries that are directly can be used on a
related to tourist national and local level to better education, improve
expenditure are referred to as direct effect. infrastructure, to fund
2. Indirect effect: It has a multiplier effect due to backward conservation efforts, and to promote more responsible tourism.
and forward 2. EMPLOYMENT: The tourism industry encompasses
connections. It is about intermediate consumption in the many different areas, so
tourist industry for the it also creates jobs in many different areas. With tourism
creation of products and services. These are the goods and comes hotels,
services purchased restaurants, car rental agencies, tour companies, service
by tourist firms from their suppliers, which comprise the stations, souvenir
tourism supply chain. shops, sports equipment rentals, and much more.
3. BENEFIT LOCAL PEOPLE: The introduction and
development of tourism
allows local people an opportunity for economic and
educational growth that
would not otherwise be available.
4. RECREATION: Travel based recreation provides relief
from the monotony of
daily routine. A change in place and climate helps a traveler to
recharge his
mind, body and spirit.
5. ECONOMIC BENEFITS: Tourism can provide direct
jobs to the community,
such as tour guides or hotel housekeeping. Indirect
employment is generated
through other industries such as agriculture, food production,
and retail.
6. ENVIRONMENTAL BENEFITS: Tourism provides
financial support for the conservation of ecosystems and
natural resource management, making the
destination more authentic and desirable to visitors.
7. DIVERSIFICATION: This acts as an insurance policy in
case of hard times,
because the additional dollars coming in can help support
traditional industries in
case they come under financial pressure.
8. INFRASTRUCTURE: The additional revenue that comes
into a community
also benefits the local council or governments. It means more
tax dollars, which
allows public projects to be launched or developed. This
means the infrastructure
improves, with new roads being built, parks developed and
public spaces
improved.
The better facilities brings in more visitors, but is a fantastic
benefit to local
residents, especially when there is enough revenue to build
new airports, schools
and hospitals, which all support the economic development
even further
9. POVERTY REDUCTION:
Poverty is an economic condition of lack of both money and
such basic
necessities of successful life as food, water, education, shelter
and other basic
life needs. This could happen through the employment
opportunities tourism
could provide for them, offering of social infrastructure like
good motorable roads
to the communities hosting the tourist attraction centers,
school and health facilities, electricity and other social means
that could add life to the people in
question.
10. FOREIGN EXCHANGE GENERATION: In addition
to income creation and
employment opportunities, tourism equally helps a country to
overcome balance
of payment problem. This is because international tourists
who buy tourism
services add value to the receiving country’s revenue accounts
in that nation’s
invisible transaction.

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