Economics of Tourism

Economy & Industry Travel and Tourism Economy - the direct and indirect spending associated with travel and tourism Travel and Tourism Industry - the provision of goods and services for travelers and tourists

Direct Impact Direct impact - tourist dollars spent on easily identified transactions, with positive economic benefits Direct employment - those jobs that deal directly with the travel and tourism industry ex. Tour guide, hotel owner, flight attendant etc.

Indirect Impact Indirect impact - secondary transactions generated by the direct spending of tourists Indirect Employment - those jobs that happen as a result of changes in the travel and tourism industry and are affected by the industry in times of success and times of trouble ex. Construction workers, taxi drivers, investors in airlines etc.

Multiplier Effect A process in which money spent on a project or event is re-spent many times so that its effect is multiplied many times, enlarging the economy. How many times money spent by a tourist circulates through a country's economy.

Case Study: Muskoka the heart of the Canadian Shield about 2 hours north of Toronto. vacation spot for all of Ontarians and some Americans alike for over 100 years. offers lots of freshwater lakes, rivers and beautiful landscapes. Many people own or rent cottages here during late spring, summer and early fall. variety of activities and attractions during this time and offers people of all ages a place for relaxation and recreation.

Muskoka has 3 small towns: Gravenhurst (population 10 000) Bracebridge (population 13 000) Huntsville (population 11 000) Getting 2 million visitors a year during it’s busiest months … that’s A LOT of people

Problem How do the people of these towns accommodate all the visitors? How different is the economy in the summer compared with in the winter? While the boom in travel to Muskoka rises for the warmer months, in the winter, employment rates drop as there are little tourists in the area Economy suffers greatly during winter months

Economic Benefits of Tourism Many developing countries rely heavily on tourism for their economy … tourism = money for the country Example: Thailand

Affects of Government on Tourism Most people want to travel where they feel safe Government plays a HUGE role in where people will pay to travel Some countries have governments that have specific tourist rules that must be followed while traveling there (Ex. China, Cuba)

https://www.cia.gov/library/publications/the-world-factbook/

Tourism Life Cycle 1) Exploration Stage at this stage, tourists have yet to discover it, considered remote and exotic by adventure tourists, with few amenities and the possibilities of expansion.

2) Involvement Stage at this stage tourist numbers increase, infrastructure develops such as airports, accommodations and attractions. Employment expands into direct and indirect. jobs and the place becomes more known

3) Development Stage at this stage there is rapid growth in tourism investments, number of jobs increases as demand for services and amenities increases. Promotion campaigns increase, effects on landscapes are present and improvements to infrastructure and elaborate accommodations are made. Sometimes, tourists outnumber local population, labour is imported and tourists targeted range from average to the elite.

4) Consolidation Stage at this stage the destination is part of the domestic and international tourist industry and is critical to the economics of the area. Large proportion of employment is in tourism and the investments include domestic and foreign.

5) Stagnation at this stage the area loses its attractiveness, becomes overused and there is overcrowding. Facilities are no longer being planned or developed.

6) Rejuvenation? Stability? Decline ? at this stage the area loses its attractiveness, becomes overused and there is overcrowding. Facilities are no longer being planned or developed.