Tourism and Economic Development Issues - Tourism and Development: Concepts and Issues - page 80

of their trip or holiday. Another element of tourism consumption relates to
all expenditures made during the trip and stay at the destination, regardless
of the nature of the goods and services purchased. The sum of all these
expenditures is called gross tourism consumption (Planina & Mihalic, 2002).
In order to calculate net tourism consumption, the reduction of living costs
in the place of residence achieved via the traveller's absence is subtracted
from the gross tourism consumption figure. In other words, some consump-
tion (for example, food, drinks and certain variable household costs) does
not, of course, occur in the home residence context during an individual's trip
or holiday and, therefore, represents resources that can be spent on or during
the trip. Conversely, other, fixed expenditure (for example, mortgage repay-
ments) must be made irrespective of where the person is. This element of
normal, day-to-day variable consumption moves with the traveller to the
destination and can be spent on different goods and services, such as visiting
an attraction rather than paying a local energy supplier. Net tourism con-
sumption thus reveals the increase in personal consumption because a person
is travelling.
It may be argued that gross tourism consumption is the most relevant
indicator as it takes account of all tourism consumption effects and the redis-
tribution of national income, both geographically and within sectors of the
economy. In the domestic tourism context, net tourism consumption dem-
onstrates the total increase in consumption within the economy since the
tourism consumption of domestic tourists travelling within their own coun-
try remains within and contributes to the national economy. Consequently,
the economic impacts of international tourism in the host country are
derived from tourism consumption that enters the host economy. Since tour-
ism-generating markets are geographically separate or distant from the host
country, a significant part of a traveller's gross tourism expenditure may
never enter the host country's economy but may impact on other economies.
As mentioned, expenditures may occur at home for goods and services
intended for a trip. These may vary from expenditure on personal sport
equipment, clothing for the holiday or the processing of holiday photographs
to the cost of a package tour paid to a national or international outgoing tour
operator. In the latter case, only some of this amount will enter the host
economy when the tour operator settles its accounts with local suppliers at
the destination. Thus, although the economic contribution of international
tourism is usually measured in terms of receipts in the destination country,
the value of gross tourism consumption and its influence on economic
growth in total may be much higher.
However, despite its impressive growth and development over the last six
decades, tourism's economic potential has, on the one hand, often been exag-
gerated for political reasons, mainly in less developed countries that have
sought to develop their economies by developing tourism. On the other hand,
tourism's economic potential has frequently been overlooked, particularly in