Micro Perspective of Tourism and Hospitality (Thc1)

PhilCST
PHILIPPINE COLLEGE OF SCIENCE & TECHNOLOGY

OLD NALSIAN ROAD, BRGY. NALSIAN, CALASIAO, PANGASINAN
MICRO PERSPECTIVE OF TOURISM AND

HOSPITALITY (THC1)
MODULE 7. IMPACTS OF TOURISM

Lesson 3. Direct, Indirect, and Dynamic Impacts
PhilCST
According to the United Kingdom's Overseas Development

Institute, tourism contributes to the economy along three
"pathways." These are direct, indirect, and dynamic effects. For
the World Travel and Tourism Council (WTTC), besides direct and
indirect effects, travel and tourism also produces induced effects.
PhilCST
According to the WTTC, direct effects are produced when

tourists spend for such commodities as accommodation,
transportation, entertainment, and attractions. Such spending
benefits industries that are involved in accommodation services,
food and beverage services, retail trade, transportation services,
and cultural, sports, and entertainment services.
The main sources of tourism-related spending are residents'
domestic travel and tourism spending the business sector's domestic
travel spending, visitor exports, and individual government travel
and tourism spending.
PhilCST
Visitor exports refer to spending by international tourists

in a country. Such spending is considered as export because the
visitors who are from other countries spend for goods and services
that are produced in the country being visited. Because the
buyers are the ones who come to the country instead of the goods
and services being shipped out of the country, tourism is
sometimes considered as an invisible export.
PhilCST
The indirect contribution of tourism to the economy comes

in the form of investments in tourism, government spending in
tourism, and the effect of purchase from suppliers. Non-tourism
suppliers could be farms for food products, utility companies for
water and electricity, and schools for human resource needs.
PhilCST
Induced effects are the collective spending by direct

and indirect employees on food and beverage, recreation,
clothing, housing, and household goods.
Dynamic effects refer to the longer-term macro-level
effects, such as general enhancement of skills within the
economy, provision of better social services (health,
education, security), and infrastructure (roads, airports
Internet).
PhilCST
According to ODI's research, direct effects in terms of

formal-sector jobs can range from 10% to 80% of income of poor
people. Several thousands of poor people gain access to the
tourism industry through the informal sector (livelihood and
businesses which are not registered). As a labor provider, it was
also found that tourism is generally more labor-intensive than
other sectors except for agriculture. Tourism is able to provide
work for more women and unskilled workers.
As far as indirect effects are concerned, ODI discovered that
they tend to be the biggest where the linkages are strongest, such
as in big, rich, diversified economies.
PhilCST
To increase the indirect impacts, it is important to

develop the linkages among the value chain. For example,
increasing the supply of fresh fruit areas vegetables from Lao
farmers to restaurants increasing the supply of Lao silk cotton
for handicraft production (replacing imports restructuring
product of in rural villages and increasing tourist time and
expenditure in the rural.
PhilCST
Senator Bam Aquino, author of entrepreneurship laws in the

Philippines speaking at a youth entrepreneurship convention at San
Sebastian College Manila on September 17, 2015, cited the case of
Boracay. He said that while the tiny island of Boracay generates 50%
of the total revenue of the whole province of Aklan, only 5% of the
raw materials needed by the establishments in Boracay are sourced
from within Aklan itself. That means that there is a high leakage
which suggests that a very small proportion of tourism-generated
income is re spent in the province, thereby, limiting its multiplier effect.
Multiplier effect refers to the number of times tourism
income is re-spent across sectors within the local economy. The higher
the multiplier, the bigger the impact on the local economy
PhilCST
Indirect effects boost the economic impact of tourism by 50% to

90% in small, poor countries. Linkages have important poverty-
reducing potential such as among food and craft industries.
In terms of dynamic effects, infrastructure can stimulate non-
tourist growth and redistribution to "yellow brick road to export
diversification. Tourism often pays a significant share of tax. However
tourism also has potential negative impacts on agricultural exports.
Tax revenues from tourism come from travel tax, value-added tax
(VAT) and income tax paid by business owners and tourism
employees. The government also generates income from the payment
of business registration, airport terminal fees, and highway toll fees.
PhilCST
- END OF LECTURE -
//dnnhvlr_2k21//

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PhilCST

PHILIPPINE COLLEGE OF SCIENCE & TECHNOLOGY

MICRO PERSPECTIVE OF TOURISM AND

MODULE 7. IMPACTS OF TOURISM

According to the United Kingdom's Overseas Development

According to the WTTC, direct effects are produced when

Visitor exports refer to spending by international tourists

The indirect contribution of tourism to the economy comes

Induced effects are the collective spending by direct

According to ODI's research, direct effects in terms of

To increase the indirect impacts, it is important to

Senator Bam Aquino, author of entrepreneurship laws in the

Indirect effects boost the economic impact of tourism by 50% to

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