Geography Reference
In-Depth Information
generated by further consumer spending (e.g. the purchase of goods and services by hotel
employees). For each round of spending per unit of initial visitor expenditure leakage will
occur from the regional economy until little or no further re-spending is possible.
Therefore, the recreation or tourism multiplier is a measure of the total effects (direct plus
secondary effects) which result from the additional tourist or recreational expenditure.
However, despite their extensive use, it should be noted that 'multipliers are difficult to
calculate precisely under the best circumstances. They require substantial amounts of
very detailed data. The methods used are also difficult and require a high degree level of
statistical and/or macro-economic expertise' (S.L.J.Smith 1995:16; see also Saeter 1998).
The size of the visitor multiplier will vary from region to region and will depend on a
number of factors, including
• the size of area of analysis
• the proportion of goods and services imported into the region for consumption by
visitors
• the rate of circulation
• the nature of visitor spending
• the availability of suitable local products and services
• the patterns of economic behaviour for visitor and local alike.
As a measure of economic benefit from recreation and tourism, the multiplier technique
has been increasingly subject to question, particularly as its use has often produced
exaggerated results (Archer 1977a, 1982; Cooper and Pigram 1984; Frechtling 1987;
D.G.Pearce 1989; S.L.J.Smith 1995; Sinclair et al. 2003). Nevertheless, despite doubts
about the accuracy of the multiplier technique, substantial attention is still paid to the
results of economic impact studies by government and the private sector as a measure of
the success of tourism development or as a way of estimating the potential contribution of
a proposed development in order to justify policy or planning decisions. As S.L.J.Smith
(1995:16) noted: 'Regrettably, the abuses of multipliers often seem to be as frequent as
legitimate uses—thus contributing further to the industry's lack of credibility.'
The size of the tourist multiplier is regarded as a significant measure of the economic
benefit of visitor expenditure because it will be a reflection of the circulation of the
visitor dollar through an economic system. In general, the larger the size of the tourist
multiplier, the greater the self-sufficiency of that economy in the provision of tourist
facilities and services. Therefore, a tourist multiplier will generally be larger at a national
level than at a regional level, because at a regional level leakage will occur in the form of
taxes to the national government and importation of goods and services from regions.
Similarly, at the local level, multipliers will reflect the high importation level of small
communities and tax payments to regional and national governments (Hall 1995).
According to Murphy (1985:95), 'for practical purposes it is crucial to appreciate that
local multiplier studies are just case studies of local gains and no more' and several
questions remain unanswered about the real costs and benefits of tourism on local and
regional development. Indeed, a major question should be: Who are the winners and
losers in tourism development? As Coppock (1977b) argued in relation to the use of
tourism as a tool for economic development:
