1. Impact Of Tourism On The Economy

2. Positive Impacts
One of the main reasons for the huge growth in tourism is the positive effect it can have on the economy of an area.
The nature of the industry means that it provides many jobs and generates substantial revenue.
This can be particularly important for less developing countries as it provides a valuable source of foreign revenue.

3. Positive Impacts
To evaluate the success of tourism you need to look at where the money generated goes.
If it is invested locally on new services such as infrastructure, schools and local projects, then any money generated by tourism is having a positive effect on the local economy and society.
The jobs generated should also go to the locals so that the economy will benefit from the multiplier effect.

4. Negative Impacts
The negative effects of tourism for an economy are determined by the distribution of the money generated and the allocation of jobs.
We use the term 'leakage' to help explain this.
Leakage is the amount of money that escapes (whether directly or indirectly) from the local economy.

5. British Tour Company Owns An Overseas Hotel
The management of the resort are British so a percentage of their wages will be leakage - especially if they are on a fixed contract for maybe a year or two.
British staff are employed to run the hotel on a seasonal basis.
Therefore a large percentage of their income will eventually be spent in the British economy.
Some tour operators export food to their hotels so suppliers in the UK benefit instead of the local suppliers.

6. Goa
There is a situation in Goa where one company owns the hotel, coach and airline.
So the holiday is booked in Germany (travel agent takes a cut), the tourists fly on a German airline, are met by that company's employee, taken on the company's bus to the company's hotel.
It is clear to see how little of the money spent by the tourists will get into the Goan economy!

7. Activity
Create 2 spider diagrams on both the positive and negative impacts that tourism has on the ECONOMY of a place.
For each of your points, explain reasons for them.
Is tourism all about strengthening a country’s economy? Explain both sides of this argument.