Travel Reference
In-Depth Information
Optimizing for the Local Economy
Tourism affects a region during periods of intense investment activity and afterward when the
investments are producing. The effects depend on linkages among economic units. Money spent for
investment will go to construction and a few other industrial sectors. These will have links to economic
units varying from households to manufacturing plants. Money spent by tourists will also be
introduced through a few sectors that will also be linked to the economy.
The
in both cases depend on the strength of the linkages. The multiplier re ects
the amount of new economic activity generated as basic income circulates through the economy.
Some sectors have strong links to other sectors in an economy and a large multiplier effect. Others
have weak links and small multipliers. It is possible to have a thriving tourist industry and abject
poverty in the local populace if there are no links. For example, linkages will be strong and the income
multiplier high if the year-round resorts in a particular destination area hire all local labor; buy their
flowers, fruit, vegetables, and poultry products from local farmers; hire local entertainers; and buy
furnishings for guest rooms from local manufacturers. Linkages would be weak if most of these goods
and services were imported from another state or country.
multiplier effects
Tourism Exports and Imports
The host region is de ned loosely as a county, a state, or a nation, depending on the level at which the
problem is being considered. For a county-level government, the income of the county is of primary
interest. A state government would perceive the maximization of the combined income of the entire
state to be its objective, and so on.
Regardless of which de nition of host region is being considered, expenditures in this area by
tourists coming from another region represent injections into the area ' s economy.
Japanese tourists traveling to the United States presumably earned their income in Japan. When
spending money in the United States as tourists, they are '' injecting '' money into our economy that
wasn ' t here before. As such, expenditures by foreigners in this country (for travel purposes) represent
tourism
for the United States. This may be somewhat confusing because we are accustomed
to thinking of something leaving the country as an export. When we export computers or cars, for
example, these commodities are sent out of the United States. In the example of the Japanese tourists,
the tourists are coming into this country. So how is it an export? There seems to be a contradiction in
terminology. As the astute student would note, however, when tourists come into this country, they
are purchasing travel experiences. When they leave, they take these experiences back with them. Thus,
we have exported travel experiences, which are, after all, what tourism is all about.
Figure 14.1 clari es this concept. When U.S. tourists travel to Japan and spend money there, this
becomes a tourism
exports
import
to the U.S. economy. Japanese money spent in the United States is a
U.S. Commodity Exports
Commodity Flow
USA
Japan
Payment Flow
U.S. Tourism Export
Tourist Flow
USA
Japan
Figure 14.1
Economic comparison: Commodity
flow and tourist ows.
Payment Flow
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