THE IMPACTS OF TOURISM

AND HOSPITALITY
THE IMPACT OF TOURISM AND HOSPITALITY
★ The rapid growth of tourism and hospitality in the twentieth century has
produced both problems and benefits for destination countries. It has had
visible impacts on the sociocultural and socioeconomic environment.

THE POSITIVE ECONOMIC EFFECTS OF TOURISM AND HOSPITALITY

★ Tourism and Hospitality affects the economy of those areas in which it
takes place. The area affected may be a resort, a region, or the entire nation.
The economic effects of tourism and hospitality may be classified in to Four
Groups Namely Effects On Income, On Employment, On the area's Balance
of Payments with the outside world, On Investment and Development.
INCOME
★ The tourism and hospitality industry obviously generates
income within a destination country.
★ Nations wanting to increase their income have used
tourism and hospitality as a means for reasonably quick
development.
★ Tourism income, in general, come from wages and
salaries, interest, rent and profits.
INCOME
★ Since tourism and hospitality is a labor-intensive industry, the
greatest proportion of its income is derived from wages and
salaries.
★ Income is also generated from interest, rent, and profits on
tourism and hospitality businesses.
★ Income is also obtained from direct taxation or indirect taxation.
Imposing value-added tax (VAT) on hotel bills is an example of
indirect taxation.
 INCOME
★ The sum of all income in a country is called the
BUSINESS

National income.

★ Multipliers are means of estimating how much

extra income is produced in an economy as a
result of the initial spending or injection of cash.
BUSINESS BUSINESS
EMPLOYMENT
★ The tourist industry offers more employment
opportunities than other economic sectors.
★ Tourism and hospitality generates
employment faster for developing nations than
for the developed ones.
THERE ARE THREE TYPES OF EMPLOYMENT
★ DIRECT EMPLOYMENT - is generated as a result of providing
goods and services directly to tourist in hotels, restaurants, bars
and etc.
★ INDIRECT EMPLOYMENT - consists of those positions that are
associated with other tourism-related activities but are used by
both the local resident and the tourist.
Ex. Food wholesalers, Tour wholesalers and shops.
★ INDUCED EMPLOYMENT - refers to people working in
positions only peripherally related to tourism and
hospitality, but generated because of it.
Examples are construction workers, merchants, and
professionals such as doctors and accountants who
service the employees working directly in tourism-related
positions.
BALANCE OF PAYMENTS
★Balance of payments is an accounting of flow of goods,
services, and funds in and out of the country during a given
period. BUSINESS

★ Most countries, particularlyBUSINESS

those with good tourism and
hospitality facilities but little industrial or agricultural export
potential, appreciate the contribution
BUSINESS that incoming tourists can
make to their balance of payments account.
INVESTMENT AND DEVELOPMENT
★ Once an area has become economically successful,
businessmen and government agencies may be
influenced to invest in tourism and hospitality and other
industries in that area. This is known by economists as an
accelerator concept.
 THANK YOU
REPORTER : MENDOZA,
JENNEL RUTH C.
Subject : THC 211 - Macro
Perspective of