Global and Caribbean

Tourism and
Its Contribution to The
Global Economy
 Introduction - Global Economy
• The global economy is best defined as
the sum of activities that take place both
within a country and between different
countries. These activities include
production and consumption exchange
of financial values, work in general and
our main focus which is “tourism”.
Global tourism simply refers to the
tourism activities that take place world
wide and Caribbean tourism simple
refers to the tourism activities that take
place within the Caribbean.
• Tourism is defined as the activities of persons traveling to and
staying in places outside of their usual environment for not more
than one consecutive year for leisure, business and other purposes.
Tourism also involves journey and service like:

Transport
Accommodation
Catering
And also Viewing
 Tourism Contribution to The
GDP
• Tourism contributed to over 10% of the
global GDP in 2019. Since 2020 that
share decrease to 5.5%. The United States
of America has the highest GDP from
tourism followed by Spain and France
holding the third spot. The tourism GDP
is the GDP that is generated by all the
tourism industries directly in contact with
visitors, or in simple terms the sum of
gross-value added generated by all the
industries in the economy as a
consequences of internal tourism
consumption plus net taxes on products
and imports at purchasers prices.
• These products “the tourism products” is a combination of tangible
and intangible elements, such as natural cultural and man-made
resources, attractions, facilities, services and activities around a
specific center of interest which represents the core of the
destination marketing mix and creates an overall visitor experience
including emotional aspects for potential customers. GDP is
important because it gives information about the size of the
economy and how an economy is performing. An increase in GDP
means that the economy is doing well and very low GDP means
that the economy is performing badly, when inflation is not a
problem.
 Tourism Contribution To
Employment
• Global and Caribbean tourism also
contributes to the economy by
employment generation. Workers
produce a valuable goods and services
and in turn receive a wage which they
can spend on buying the goods
produced. High employment also means
a greater amount of goods can be
produced as well as great number of
services can be offered. Tourism
contributes to over 319 million of jobs
to the world economy.
• Tourism creates different types of jobs. Tertiary jobs involve
providing a service to another person, for example housekeeper’s
bartender, travel agent and spa manager. Primary jobs involve getting
raw materials from the natural environment for example farmers,
fishers and miners. Secondary jobs involve making things
manufacturing for example textile production, car manufacturing,
construction jobs and processing. Quaternary jobs involve research
and development. For example software development, medical
services, tourism researchers.
• There are two types of employment in the tourism industry direct
and indirect. Direct employment includes jobs that are
immediately associated with the tourism industry. 
• These include hotel staff, restaurant staff or taxi drivers. Indirect
employment includes jobs which are not technically based in the
tourism industry. For example a fisherman doesn’t have any contact
with tourists but he sells his fish to the hotel which then serves the
tourists, for without the tourists he wouldn’t be supplying the fish to
the hotel. Tourism tends to employ younger individuals. Around half
of the employees in the hotel, catering and hospitality sectors are under
25 years old. This is important for the economies in the less developed
countries where the proportion of young people is greater. Tourism
provides jobs for people with little formal training. The tourism
industry is very labour-intensive, needing large number of people to
service rooms to prepare food and to maintain hotel infrastructures.
Tourism also goes where other sectors often don’t go by doing this
they provide jobs and income for thousands and hundreds of people.
 Tourism Contribution To Foreign
Exchange
• One of the biggest benefits of Tourism is the
ability to make money through foreign
exchange earnings. Foreign exchange or
Forex is the conversion of one country's
currency into another. foreign exchange
earnings means the Monetary gain by selling
goods and services, or by exchanging
currencies in the Global Market. Foreign
exchange helps in driving economic growth
and helps in reducing poverty both locally
and globally.
• Tourism expenditures, meaning the total consumption of
expenditure made by a visitor, or on behalf of a visitor, for and
during their trip and stay at a destination and generates income
to the host economy. The money that the country makes from
tourism is then reinvested in the global economy. Tourism is
one of the top 5 export categories for as many as 83% of
countries and is a main source of foreign exchange for at least
38% of countries. 
 Tourism Contribution To The Development
of Infrastructures
• Tourism promotes the development of infrastructures in the
different tourism destination regions. Infrastructures are defined as
the basic physical and organizational structures and Facilities
needed for the operation of a society or Enterprise. Visits by
tourist create additional development of places such as:
Parks and Gardens
Museums
Roads
And also Signage
• Infrastructures boost tourism development By raising the attractiveness
and competitiveness of the destination region. Tourist usually Expect
facilities in their chosen destination to be Comparable to what they
enjoy at home. Therefore, good infrastructures in a destination region
pulls the demand for its products . Infrastructure also reduces the
distance between regions and also integrates national Market And
connects them at low cost to their economies.

• An increase in the demand will lead to more employment, foreign

exchange earnings income, hence Contributing to the economy of the
different countries and the global economy at Large.
 Tourism Contribution To Government
Revenues.

• Tourism contributes to government

revenues. it helps to raise money that
is then invested elsewhere by the
government . There are two ways that
this money is accumulated, by direct
contributions and indirect
contributions 
• Direct contributions are generated by taxes and income from tourism
development And tourism business and other things such as departure
taxes. These taxes all differ considerably between the destinations.
According to the world tourism organizations, the direct contribution of
travel and tourism to the GDP in 2018 was $2,750.7 billion which is
3.2% of the GDP.

• Indirect Contribution comes from the goods and services supplied to

tourist, which are not directly related to the tourism industry. for
example, a tourist may buy food at a local supermarket. The
supermarket is not directly associated with tourism, but if it wasn't for
tourism its Revenue wouldn't be as high because the tourists wouldn't
shop there.
• There is also the income that is generated through Indirect
contributions. This is the money spent by the people who are
employed in the tourism industry. This might include the cost for
housing, food, clothing and leisure activities. All these things will
not just contribute to an increase in economic activities In the area
where tourism is being developed but also contribute to the global
economy significantly.
 Tourism Contribution To Cultural
Exchange
• Tourism creates a cultural exchange
between tourists and local citizens.
Cultural exchange is sharing different
ideas, traditions and knowledge with
someone who may be coming from a
completely different background other
than their Own. foreign tourists Bring
diversity and cultural enrichment to
the hosting country. Tourism is a great
opportunity for foreigners to learn
about a new culture, but it also creates
many opportunities for local citizens.
• It also allows young entrepreneurs to establish new products
and services that would not be sustainable on the local
population of residents alone. This will lead to more
employment generation, more government revenues, more
income and foreign exchange, as well as more infrastructure.
These all will contribute to the local economy and also will
contribute to the global economy consistently.
The End