2.01 Recap

Economic Multiplier Economic multiplier – an effect in economics in which an increase in spending produces an increase in national income and consumption greater than the initial amount spent. Tourism not only creates jobs it also encourages growth in a specific industry. This is known as the multiplier effect which in its simplest form is how many times money spent by a tourist circulates through a country's economy. Example: Tourist spend money at local attractions- employees at the attraction earn money and spend their income on local restaurants and stores.

Economic Conditions Economic conditions greatly influence the demand in the travel and tourism industry. Travel and Tourism goes through economic highs and lows-goes through cycles. When visitors visit hospitality and tourism businesses the local economy thrives.  Recession-Spending on necessities vs. wants.  Examples: Not going to restaurants, attractions and no spending money for vacations. (off-season = higher unemployment)  Peak Stage-More $$ to spend on luxurious/desirable items.  Examples: Vacations, visiting restaurants or other attractions.

Globalization Globalization- process in which the economies of different nations becomes interrelated.  Travel among different countries strengthens national economies.  Attracting tourist improve infrastructure.  Increase in travel and tourism increases more employee opportunities.

Supply and Demand Supply - The total amount of a product (good or service) available for purchase at any specified price. Demand - Desire for certain good or service supported by the capacity to purchase it.  Example: A band touring in Charlotte will bring the demand for hotel rooms within the city.

Transnational corporation Transnational corporation – corporation that has major operations in several countries.  Example: Major hotel chain has 710 hotels in 64 countries.