The Economic Impact of Tourism
Global Economy
Tourism plays an important role in the global economy.
Every year the number of international tourists is increasing with an expected 1.8 billion international travelers by 2030 according to UNWTO.
The loss of tourism as a result of the recent pandemic is evidence of the enormous impact the industry has on millions of people whose livelihoods depend on it.
Our travels are a great opportunity for us to help support the local economy of the places we’re visiting while having a positive impact.
The tourism industry provides 1 in 10 jobs globally while international travel contributed $1.7 US trillion towards global spending in 2019 according to the World Travel & Tourism Council.
Tourism Is Essential For The Local Economy
Tourism Brings Economic Challenges
1. Rising Cost of Living
Thriving tourism development can bring an increase in costs for the local people. Property values will often rise in areas surrounding tourist sites which can raise the price of goods, taxes, and rent making it unaffordable for locals.
2. reliance on Tourism
Some regions or countries become dependent on tourism and are not able to manage the impact of natural disasters, economic recession, or a decrease in tourists as seen by the pandemic.
3. No Job Security
Tourism-related employment is often seasonal or part-time work. These jobs can be low paying with unfavorable working conditions which leads to high turnover and offer minimal job security.
4. High Infrastructure Costs
A rise in tourism may require upgrades to the airport, roads, and tourist facilities. This development can come at a high cost for the local government and taxpayers while taking away from other critical areas such as education and health.
5. Enclave Tourism
Cruise ship and resort vacations severely reduce opportunities for local businesses. There is minimal interaction with tourists who are often encouraged to spend their time at the resort or restricted from leaving the ship.
Imported goods are commonly used which leaves limited opportunities for the growth of the local economy.
An estimated 80% of tourist spending on all-inclusive holidays goes directly to international hotels, airlines, and other businesses outside the host country.
6. Tourism Leakage
As tourism increases to a region it brings a rise in foreign investment which not only can harm local small businesses but often the revenue generated doesn’t stay in the host country.
This is particularly common in the least developed nations that often don’t have the ability to produce goods locally or to finance tourist infrastructure development so the host country must rely on importing many products and overseas investors.
According to UNEP, for every $100 US spent by tourists in the least developed countries, only $5 US remains in the local economy.
It is estimated that 80% of tourist spending in small island nations and 70% of money spent in Thailand leaves the country due to tourism leakage.
Making A Difference When You Travel Is Easier Than You Think
Make Educated Decisions
Follow responsible travel blogs and read honest reviews to ensure your tourist spending supports ethical businesses.
Use Local Tour Companies
Choose locally-owned tourism businesses and use local guides. Do your research on tipping guidelines around the world.
Responsible Consumerism
Do your research to make sure you’re buying ethically produced and quality-made products while avoiding counterfeit items which are often produced from forced labor and human trafficking with poor conditions for the workers.
Skip The Resorts
Support homestays, local hotels, and ecotourism rather than foreign-owned resorts and cruise ships.
Use Your Voice
Social media is a powerful tool that can be used to show support for your positive experiences and honest reviews may lead to improvements.
Post Pandemic Support
Plan your next adventure to the countries that are less traveled and whose livelihoods rely on tourism.
Shop Local
Eat at local restaurants and pay a fair price to local artisans when shopping for souvenirs rather than buying imported goods.
Support The Community
Donate your time, money, skills, or materials to local projects to help stimulate growth for the economy.
