Travel Reference
In-Depth Information
payments surplus that was not visible in the above-mentioned narrow travel
balance. In addition, international transactions connected to tourism FDI
also demonstrate how tourism's economic impacts are not only unidimen-
sional and might have diverse effects on the balance of payments. In the
above case, when the Japanese travel to destinations which are supported by
Japanese capital, the effect of the outgoing tourism on the Japanese balance
of payments is not only negative since transactions in relation to remitted
profits, salaries to Japanese employees, payments for imported goods from
Japan in order to support tourism business abroad are shown on the other
side. Moreover, tourism's true value to the balance of payments may, in fact,
be greater than suggested by focusing on the tourism sector alone. That is,
the tourism economy can include all industries and sectors beyond the actual
tourism industry per se.
Thus, tourism is an important source of foreign currency. In world
terms, tourism is the fourth top export category in the world after fuels,
chemicals and automotive products. In 2010, overall tourism exports, inclu-
ding passenger transport, exceeded US$1 trillion. Tourism exports account
for 30% of the world's exports of commercial services and 6% of total
exports (UNWTO, 2011e). By 2012, tourism exports reached US$1.3 trillion
(UNWTO, 2013b). For many developing countries, tourism is the main
source of foreign exchange earnings and their number one export category,
as well as an opportunity for development. It is, therefore, not surprising
that for many countries, particularly those with a limited industrial sector
or with few opportunities to develop alternative export sectors, tourism
provides a vital source of foreign exchange earnings. In Cyprus, in the 1980s
and early 1990s for example, tourism accounted for about 40% of total
exports and, until the mid-1990s, balanced the rapidly increasing imports
bill (Sharpley, 2001).
However, the figures in Table 3.1 demonstrate that tourism's contribu-
tion to exports in general, and the balance of international tourism expendi-
tures and receipts in particular, varies considerably from country to country
and, indeed, does not closely follow the level of a country's development as
the theory would suggest. For instance, less developed countries are expected
to show a positive travel balance as they are non-industrialised and consid-
ered to possess greater tourism attractiveness due to a less degraded environ-
ment. At the same time, they consider tourism to be an export opportunity
which has been subject to relatively high growth rates and holds the poten-
tial for higher earnings than more traditional forms of export. On the con-
trary, more developed countries are expected to show a negative tourism
balance the more their residents travel. In Table 3.1, the six countries that
belong to the G7 group simultaneously offer evidence for and against this
contention. On the one hand, Germany, Canada and the UK reveal a travel
deficit; on the other hand, the remaining three - France, the US and Italy -
reveal a travel surplus. And yet a more narrow geographical analysis of the
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