ECONOMIC IMPACTS OF TOURISM

• The tourism industry Generates

Economic benefits to

Tourist

Host countries

• The primary motivations for a region to promote itself as a tourism destination

• •

Expected economic improvement. DEVELOPING

COUNTRY

Economic development brings along both

Positive and Negative Consequences

• According to the world tourism organization,

• International tourist arrivals

• are estimated to 880 million

• In 2009, international

• tourism generated US$ 852

• billion (€ 611 billion) in

• export earnings

• International tourism receipts combined with passenger transport currently total more than us$735 billion - making tourism the world's number one export earner, ahead of automotive products, chemicals, petroleum and food.

POSITIVE ECONOMIC IMPACTS

Foreign exchange earnings

Government revenues

Employment

Infrastructure investment

Contribution to local economies(income multiplier)

• 1.Foreign exchange earnings• 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. Source:UNWTO

• FEE during the month of February 2010 were US$ 1.4 billion as compared to US$ 923 million during the month of February 2009.

• 2.Contribution to government revenuesDirect contributions

taxes on incomes from tourism employment

by direct levies on tourists such as departure taxes.

• Indirect contributions From taxes and duties levied on

goods and services supplied to tourists.

• 3.Employment generationThe hotel accommodation sector alone provided around 11.3 million jobs worldwide

• 5.Contribution to local economies

• Employment in Tourism Sector

• 41.8 million.• Contribution of Tourism

to GDP is expected to be at US$ 187.3 billion by 2019

• No. of domestic tourist visit in 2005* were 461.16 millions

• FTAs during the Month of February 2010 were 601,000 as compared to FTAs of 547,000 during the month of February 2009. A growth of 9.9 per cent was registered in February 2010 over February 2009

NEGATIVE ECONOMIC IMPACTS

Leakage Enclave tourism

Infrastructure cost

Increase in prices

Economic dependence of the local community on tourism

Seasonal character of jobs

Economic crisis

Tsunami hits economies, business, markets

TOURISM LEAKAGE

Leakage describes an unwanted loss, or leak, of something which escapes from its proper location. The term refers to the way in which revenue created through tourism in LEDCs (Less Economically Developed Countries) can 'leak' back to richer countries.

• In most all-inclusive package tours, about 80% of travellers' expenditures go to the airlines, hotels and other international companies (who often have their headquarters in the travellers' home countries), and not to local businesses or workers.

• Import leakage occurs when tourists demands standards of equipment, food, and other products that the host country cannot supply. Especially in less-developed countries, where food and drinks are often imported .

• Export leakage Often, especially in poor developing destinations,

overseas investors are the only ones that possess the necessary capital to invest in the construction of tourism infrastructure and facilities.