ECONOMIC IMPACT OF TOURISM

TOURISM

TOURISM IS GOING AWAY OF PEOPLE AWAY FROM THEIR HOUSES FOR SOME SPECIFIC PURPOSE LIKE ADVENTURE,MEDICAL ETC BUT NOT STAYING THEIR AT NOT MORE THAN 365 DAYS.

TOURISM IS SAID TO BE DONE ONLY WHEN A PERSON IS NOT EARNING MONEY AT THE DESTINATION .IF A PERSON IS EARNING THERE THEN WE CANT SAY THAT TOURISM.

THERE ARE MANY IMPACTS OF TOURISM WHICH THIS SERVICE INDUSTRY DOES TO THE COUNTRY LIKE IT HAS ITS IMPACT ON ECONOMY,SOCIAL,GEOGRAPHY,ENVIRONMENTAL ETC.

HERE WE WILL DISCUSS ABOUT ECONOMIC IMPACTS OF TOURISM.

ECONOMIC ASPECT

TOURISM PLAYS AN VERY CRITICAL ROLE IN THE DEVELOPMENT OF COUNTRY.

THERE ARE CERTAIN FACTORS WHICH ARE EFFECTED BY TOURISM AND HELPS IN INCREASING THE ECONOMY OF INDIA.

ECONOMIC IMPACTS OF TORISM

INCOME:- INCOME IS ALSO GENERATED FROM

INTERST,RENT AND PROJECTS ON TOURISM BUSINESSES RANGING FROM THE INTERSTS PAID ON LOANS TO AN INVESTOR IN INFRASTRUCTURE.THE AMALGAM OF ALL INCOME IN AN ECONOMY IS CALLED “NATIONAL INCOME” WHILE THE SIGNIFICANCE OF TOURISM IN A COUNTRY’S ECONOMY CAN BE IDENTIFIED BY ITS CONTRIBUTION AS THE PROPORTION OF NATIONAL INCOME.

TOURISTS COMING TO THE COUNTRY SPEND MONEY ON NECESSARY ITEMS.THEY SPEND THEIR MONEY ON DESTINATIONS ETC AND THAT MONEY INCREASES THE COUNTRY INCOME.

THE MULTIPLIER EFFECT:-

IN ECONOMIC TERMS, THE TOURIST SPENDING IS AN EXPORT THAT BRINGS IN NEW MONEY. THE PART THAT REMAINS IN THE ECONOMY ,BEING SPENT AND RESPENT,SETS A TOURIST A INCOME MULTIPLIER (TIM).

THE GREATER THAT % OF SPENDING THAT REMAINS IN THE ECONOMY AND THE FASTER IT IS RESPENT,THE GREATER ITS EFFECT IN “HEATING”THE ECONOMY OF AN AREA.

FROM AN ECOMIC VIEWPOINT,SERVICES PERFORMED IN TOURISM ARE EXPORTS.THOUGH SERVICES ARE NOT TANGIBLES NEVERTHELESS,OFFERING SERVICES TO TOURIST PRODUCES INCOME FOR THE TOURIST DESTINATION AREA IN THE SAME MANNER AS TANGIBLE GOODS SHIPPED FROM THE AREA.

TIM EXPRESSED AS MATHEMATICALLY:- TIM=1-TPI/MPS+MPI TIM=TOURIST INCOME MULTIPLIERTPI=TOURISTS PROPENSITY TO IMPORTMPS=MAGINAL PROPENSITY TO SAVEMPI=MARGINAL PROPENSITY TO SALE

EMPLOYMENT:-

TOURISM NOT ONLY CREATES INCOME BUT EMPLOYMENT, TOO. WHILST SOME JOBS ARE FOUND IN TRAVEL AGENCIES,TOUR OPERATORS AND OTHER INTERMEDIATOR,SUPPLIYING SERVICES IN THE GENERATING AREA,BUT THE BULK OF JOBS ARE CREATED IN THE TOURIST DESTINATION THEMSELVES.

THE EMPLOYMENT POTENTIAL OF TOURISM COMPARED WITH OTHER INDUSTRIES HAS BEEN CRITICISECD ON SEVERAL GROUNDS:

THAT MUCH POTENTIAL IS SAESONALTHAT IT DOES NOT PROVIDE MEANINGFUL

JOBS.THE INHABITANTS ARE ,INFACT,RELIGATED TO INFERIOR,MENIAL POSITIONS-THE UNSKILLED,LOW PAYING JOBS

THE LOCAL POPULATION IS TOO SMALL TO FILL VACANCIES

IN MANY AREA THER ARE UNSUFFICIENT WORKERS WHICH SPECIFIC TECHNICAL AND MANAGERIAL SKILLS

OUTSIDERS ARE ATTRACTED IN BY HIGH WAGES AND THE OPPURTUNITY TO LIVE AND WORK IN PLEASANT AND EXOTIC SURROUNDINGS

BALANCE OF PAYMENTS:-

IN A NATIONAL CONTEXT TOURISM MAY HAVE A MAJOR INFLUENCE ON A COUNTRIES BALANCE OF PAYMENTS.INTERNATIONAL TOURISTS ARE GENERALLY GOING SERVICES FROM THE ANOTHER COUNTRY AND ARE THERE FOR “INVISIBLES”

MANY OF COUNTRY TRY TO MAXIMISE THEIR TRAVEL RECIEPTS THROUGH PROMOTINAL AND MARKETING STRATETGIES.

WHILST INBOUND TORISM IS IMPORTANT DUE TO ITS ECONOMY WEIGHT OF FOREIGN EXCHANGES,OUTBOUND TOURISM IS AS MUCH AS BUREDN ON THE FOREIGN EXCHECKER OF THE COUNTRY,AND INTERESTINGLY BOTH THE DIMENSION OF TOURISM MOVE ALONG SIMULATIONLY INDEPENTLY.

GOVRNMENT REVENUE OR TAXES AS TANGIBLE BENEFITS:-

TOURISM ACTIVITY IS USED BY CERTAIN ECONOMIES AS AN IMPORTANT RESOURCE FOR GENERATING GOVT REVENUES.

TOURISM GENERATES TAX INCOME,SOME OF WHICH IS DIRECTLY IMPLIED AND SOME COMPUTED INDIRECTLY.

MANY GOVTS RAISE MOST OF THEIR TAXES FROM IMPORTANT DUTIES WHICH ARE EASIER TO COLLECT THAN INCOME TAXES.

THE TRAVELLER PAYS THE TAXES BY BUYING FOOD,BEVRAGES,AND OTHER GOODS THAT HAVE BEEN IMPORTED AND BY STAYING IN HOTELS AND OTHER FACILITIES THAT HAVE IMPORTED BULIDING MATERILAS AND MANY OF THE GOODS USED IN THEIR OPERATIONS.

INVESTMENT AND DEVELOPMENT:-

ONCE OF THE ECONOMY OF AN AREA IS ON THE RAILS THAT IS GOOD BUSINESS AND INCOME LEVELS HAVE BEEN GENERATED,THE PRIVATE AND PUBLIC SECTOR MAY BE INDUCED TO INVEST EVEN MORE IN THAT AREA,AND THIS IS WHAT ECONOMISTS CALL ACCELERATOR EFFCT.

INVESTMENT IN TOURISM IS HOWEVER,REMAINS AS IT DOES IN ANY OTHER INDUSTRY BECOUSE THERE IS NO OBVIOUS AND CLEARLY DEFINED RELATION BETWEEN TOURISM PROMOTION AND ECONOMIC DEVELOPMENT DUE TO COMPLICATING FACTORS LIKE INFLATION,DIVERSIFYING CAPABILTITY OF AN AREA AND THE WILLINGNESS OF THE LOCAL PEOPLE TO WORK HARD.

NEGATIVE ECONOMIC IMPACT:-

LEAKAGEENCLAVE TOURISM

THERE ARE MANY HIDDEN COST TO TOURISM WHICH CAN HAVE UNFAVOURABLE ECONOMIC EFFECTS ON THE HOST COMMUNITY.

OFTEN RICH COUNTRIES ARE BETTER ABLE TO EARN PROFIT FROM TOURISM THAN POOR ONES

WHEREAS THE LEAST DEVEALOPED COUNTRIES HAVE THE MOST URGENT NEED FOR INCOME,EMPLOYMENT AND GENERAL RISE OF THE STANDARD OF LIVING BY MEANS OF TOURISM.THEY ARE LEAST ABLE TO REALISE THESE BENEFITS.

AMONG THE REASON FOR THIS ARE LARGE SCALE TRANSFER OF TOURISM REVENUES OUT OF THE HOST COUNTRIES AND EXCLUSION OF LOCAL PEOPLE AND PRODUCTS.

IN ADDITION,SIGNIFICANT AMOUNT OF ACTUALLY RAETAINED AT DESTINATION LEVEL CAN LEAVE AGAIN LEAKAGE.

LEAKAGE:-

THE DIRECT INCOME FOR AN AREA IS THE AMOUNT OF TOURIST EXPENDITURE THAT REMAINS LOCALLY AFTER TAXES.PROFITS,AND WAGES ARE PAID OUTSIDE THE AREA AND AFTER IMPORT ARE PURCHASED,THESE SUBSTRACTED AMOUNTS ARE CALLED LEAKAGE.

IN MOST ALL INCRESIVE PACKAGE TOURS,ABOUT 80% TOURS OF TRAVELLERS EXPENDATURE DUE TO AIRLINES ,HOTELS AND OTHER INTERNATIONAL COMPANIES ,AND NOT TO LOCAL BUSINESSES OR WORKERS.

THERE ARE MAIN WAYS BY WHICH LEAKGES OCCUR.

IMPORT LEAKAGE:- THIS

COMMONLY OCCUR WHEN TOURIST DEMAND STANDARDS OF EQUIPMENT,FOOD AND OTHER PRODUCT THAT THE HOST COUNTRY CAN’T SUPPLY.

EXPORT LEAKAGE:- TNC’S HAVE A

SUSTAINAL SHARE IN THE EXPORT LEAKAGE.OFTEN,ESPECIALLY IN POOR DEVELOPING DESTINATIONS,THEY ARE THE ONLY ONES THAT POSSESS THE NECESSARY CAPITAL INVEST IN THE CONSTRUCTION OF TOURISM INFRASTRUCTURE AND FACILITIES.

ENCLAVE TOURISM:-

WHEN TOURIST REMAIN FOR THEIR ENTIRE STAY AT THE SAME CRUISE OR RESORT,WHICH PROVIDES EVERYTHING THEY NEED AND WHERE THEY WILL MAKE ALL THEIR EXPENDITURE.

NOT MUCH OPPURTUNITIES IS LEFT FOR LOCALS TO PROFIT FOR TOURISM.

THANK YOU EVERYONE