Travel Reference
In-Depth Information
hotels, caravan parks, guesthouses or tourist attractions
that provide an income for the people who own them
and create jobs for local people. The travel and tourism
sector has the ability to provide a variety of positive
economic impacts, the most important of which are:
FOCUS ON INDUSTRY
ECONOMIC IMPACT OF TOURISM IN THE GAMBIA
The Gambia is located in West Africa and has
developed a strong tourism economy since the
1990s, appealing particularly as a winter sun
destination to European tourists. According to
data from the World Travel and Tourism Council,
the country is expected to generate US$132 million
from tourism in 2010, representing 12.3 per cent of
total gross domestic product (GDP), i.e. the total
output of all goods and services in the country. Total
revenue from tourism is forecast to grow to US$414
by 2020. Tourism employs approximately 67,000
people, 9.9 per cent of total employment in the
Gambia. The number of jobs in tourism is expected
to grow to 91,000 by 2020.
•
Increased domestic income and foreign currency
earnings;
•
Economic multiplier effect;
•
Increased employment;
•
Improved infrastructure.
Increased domestic income and
foreign currency earnings
The travel and tourism sector generates income and
wealth for private individuals, local councils, companies,
voluntary bodies and national governments - from
the modest income earned by a couple running a
farmhouse bed and breakfast business to the millions
of pounds generated by large travel companies
and the billions of pounds earned from tourism by
many countries around the world. At international
level, the money that tourists spend in a country can
make a considerable contribution to its balance of
payments, i.e. the fl ows of money into and out of a
country. The USA, for example, earned nearly US$95
billion from incoming tourism in 2009, the most of any
country in the world. Many developing countries are
turning to tourism as a way of increasing their foreign
currency earnings and using the money they receive
from tourism to improve health, education and social
facilities. As well as receiving direct income from
visitors, governments also benefi t from tax payments
made by tourism businesses and tourists themselves,
e.g. hotel, aircraft and border taxes.
Economic multiplier ef ect
At local level, revenue generated by tourism
development is often vital to the economic well-being
of an area and is boosted by an important concept
known as the multiplier effect. Research has shown that
the amount spent by visitors to an area is re-circulated
in the local economy (by, for example, the wages of
somebody working in a tourist attraction being spent on
goods and services in local shops) and is actually worth
more to the area than its face value. For example, £200
spent by a couple on a short break in a hotel, could be
worth as much as £200 x 1.4 (the economic multiplier
effect for that area), i.e. a total of £280.
The actual value of the multiplier (1.4 in the above
example is merely an illustration), varies between
regions and different component industries in travel
and tourism. The multiplier for, say, a farm guesthouse
is likely to be greater than for a city centre hotel which
is part of a large multinational chain. This is because the
owners of the farm guesthouse are likely to spend their
money locally, buying food and other services for their
business, while the goods and services for the large
hotel may well be brought in from outside the area as
part of a national distribution contract, i.e. income is
lost to the area. In economic terms this loss in income
is known as a 'leakage' from the local economy.
Activity 12.1
Carry out some research to fi nd out just how much
your local area, or a tourist area nearby, benefi ts
from spending by tourists.
This activity is designed to provide evidence for P1.
