Outcomes

• Identify the economic benefits for a nation,

both nationally and internationally
• Be aware of the negative economic effects of
tourism for destinations
• Understand how tourism is measured
statistically
• Recognize the limitations of statistical
measurement
 Introduction
• Tourism is a human activity which arises in
part from economic circumstances of the
consumer.

• Tourism has an economic impact upon nations

and regions.
 Economics
• Economics analyses the ways
in which individuals, groups
and organizations use
resources to improve their
well-beings

• Scarcity, choice and

opportunity cost, etc
 The International Tourist Market
• Travel and tourism is probably the single most
important industry in the world.
• Tourism accounts for at least 10.4 percent of the
world’s gross domestic product (GDP) 2018.
• Tourism sectors employs over 319 million people.
• In 2018, there were over 1.4billionn international
tourist arrivals
• International tourism receipts grew to US$1.7
trillion in 2018
(WTO)
 The International Tourist Market
• Domestic tourism
– 3.1 billion domestic trips by Americans in 2006
– 66 million international outbound trips
– India is the fastest-growing market for domestic
tourism
• Trends in international travel
• Tourist destination
Most-visited Countries
International tourism receipts
International tourism expenditures
The relationship between cost, price
and demand
Cheap price

Low cost per

High demand
tourist

High load
factor
 The Value of Economic Data
• Gathering data on tourists is a vital task for
the government of a country as it is vital to its
own national tourist office and the providers
of tourism services
• Tourism organizations use such data to
forecast
• Future planning can be undertaken
• Can use these data in decisions regarding the
infrastructure and superstructure
 The Economic Impact of Tourism
• Income
• Employment
• Balance of Payment
• Investment and Development
• Balancing economic diversification and
overdependence on tourism
• Inflationary pressure
• The opportunity cost of tourism
 Income
• tax
• Salaries
• Interest
• Rent
• profits
Employment

• According to WTTC, jobs in tourism account for 8.4

per cent of total employment
• 296 million jobs by 2018
• Some jobs are seasonal or part-time, so tourism’s
contribution to full-time employment is
considerably less than the total employment figures
may suggest
• Technology threatens labour opportunities in
tourism
Employment
 Balance of Payment
• Tourism may have a major influence on a
country’s balance of payments.
• International tourists transactions will be
recorded in a country’s accounts as ‘invisibles’.
• Invisible export and imports
 Investment and Development
• Private investors see tourism investment as
high-risk investments
• Banks are reluctant to lend money for tourism
projects
• Investment is something of a chicken and egg
situation – accelerator concept
• Growth in tourism and economic
development is uneven
Balancing economic diversification
and overdependence on tourism
• For some countries or even regions, such as
rural areas or declining industrial areas,
tourism may offer an opportunity to diversify
the economy.
• tourism may amalgamate with farming
business – agritourism
• Over reliance on tourism can bring difficulties
Balancing economic diversification
and overdependence on tourism
 Inflationary pressure
• Tourism can push the cost of
resources (land, labour)
higher, creates an imbalance
in terms of supply.
• It can create inflationary
effect
• Local community may be
unable to afford the
increased costs
• Excluded from accessing their
own community’s resources
 The opportunity cost of tourism
• Resources used to support tourism industry is
unavailable to other industries

• When government tax local people for

tourism investment purpose
 Statistical measurement of
tourism
• Government use statistics to get to know the
contribution that tourism makes to the
economy in terms of income, employment,
balance of payment and investment.
• Government wish to know the trends, with
nation and across nations
• Tourist office use this information to forecast,
plan, promotion campaigns, etc
 Statistical measurement of
tourism
• The information must be both qualitative and
quantitative, e.g;
– Number of international visitors, number of domestic
tourism
– How these are distributed over the month of the year
– Tourist’s spending patterns
– Mode of travel
– Duration of stay
– Sociographic profiles – personality, lifestyle, etc
 Domestic and International
surveys
• Statistics of tourists belong to different
regions
• Global tourist statistics by organisations such
as OECD, UNWTO, etc
• Statistics about domestic tourism is also vital
• Done by local tourist offices, nation wide
tourism associations, etc
Techniques and problems regarding
measurement of tourism
• Demand for qualitative research
• Some criticisms of quantitative methods
• Tourism satellite accounts
– UNWTO introduced concept
– A system which include all indirect expenses and
their resultant contribution to GDP, employment
and capital investment
 Further issues
• Sustainability

• Effort to maximising
multiplier effect

• Computerization of data