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Tourism and its economic benefits and costs.

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Tourism and its economic benefits and costs.

  1. 1. Tourism and its Economic Benefits and costs
  2. 2. Advantages to Tourism  Tourism brings much needed investment into an area.  Tourism provides employment for local people.  The money that tourism brings in can be used to improve the infrastructure of the area.
  3. 3. INTRODUCTION The Tourism industry provides an important impetus to growth in other sectors such as agriculture, transportation, retailing and manufacturing and is therefore seen as a key ingredient of economic development It is one of the major foreign exchange earners and main growth sector for many countries especially developing countries that are rich in natural and cultural resources
  4. 4. Advantages to Tourism  Income from tourism may be used to help conserve the natural environment that is the reason why visitors come in the first place.  The country can benefit from overseas investment, primarily in the tourist industry, but also in other related industries.  Tourism may help to preserve local cultures and communities, as they become a tourist attraction.
  5. 5. Economic Benefits of Tourism  Foreign Exchange Earnings  Travel and Tourism expenditures  Generate income to the host economy and can stimulate the investment necessary to finance growth in other economic sectors.  accelerate this growth by requiring visitors to bring in a certain amount of foreign currency for each day of their stay.
  6. 6. CONTINUE..  Foreign Exchange Earnings   Tourism is one of the top five export categories for as many as 83% of countries and is a main source of foreign exchange earnings for at least 38% of countries. Contribution to Government Revenues  Direct contributions  Indirect contributions
  7. 7. Continue..  Generation of Employment Opportunities  Direct Employment  Indirect Employment  Induced Employment
  8. 8. Economic Benefits of Tourism  Infrastructure Investment  Tourism can induce the local government to make infrastructure improvements such as better water and sewage systems, roads, electricity, telephone and public transport network  This can improve the quality of life for residents as well as facilitate tourism.
  9. 9. MULTIPLIER EFFECT  Takes place when spending is circulated throughout an economy  Conceptualizes what happens when tourists spend money on destination.  Shows and distinguish the direct and indirect income derived from tourism
  10. 10. TOURISM DOES NOT ONLY HAVE BENEFITS BUST IT ALSO HAVE COSTS:  Inflation:  Increase in prices of land, houses and food that can occur as a result of tourism.  Opportunity Costs the cost of engaging in tourism rather than another form of economic activity.
  11. 11. CONTINUE….  Dependency    a place becomes over-dependent on tourism that other industries are abandoned. Over-reliance on tourism carries risks to tourismdependent economies. Seasonality  One of the major disadvantages in tourism  Its effect to jobs, investments and tourism-related enterprises
  12. 12. Economic Costs of Tourism  Leakage  Goes out of the local economy to pay for imported items, expatriate salaries or franchise fees.
  13. 13. REFERENCES     