Step 1: Read the key terms list below. Make sure that you understand and could give a definition to somebody else.
Step 2: Read the information in Section 1. Answer the exam questions here – 13.2
Tourism can be a very important part of a country’s economy. However, different countries rely on tourism for national income to different extents. A country which has a large manufacturing industry, or an abundance of natural resources, will rely less on tourism than a country without these. However, a strong tourism industry is seen to be one of the best ways to earn foreign income and therefore create employment, improve infrastructure and living standards in a country.
The economic importance of tourism
The graph above shows the countries with the largest annual income from tourism in 2009 ($billion). All of these countries would be classed as ‘Developed countries’.
However, the contribution that tourism makes to a country’s wealth (GDP) can vary greatly. For example;
France – In 2014, 8.9% of France’s GDP came from tourism. That means that 91.1% came from elsewhere – Industry, agriculture, foreign trade etc. France is considered a developed country.
Cape Verde – In 2014 40% of Cape Verde’s GDP came from tourism. That means that only 60% came from elsewhere. Cape Verde is considered a developing country.
Therefore Cape Verde relies much more heavily on tourism for national income than France. It contributes far more to the overall economy.
Tourism multiplier effect
Tourism can be valuable to a country because it creates employment and generates income. The money generated from tourism can have a knock on effect on other parts of a country’s economy.
How many times money spent by a tourist circulates through a country’s economy is known as the Tourism Multiplier effect.
Case study – Dubai – The importance of tourism in developed/richer countries
Dubai is part of the United Arab Emirates (UAE)
A brief timeline of the development of Dubai
1966 – Oil is first discovered in Dubai leading to the rapid development of infrastructure, schools, hospitals and transport.
1969 – A new terminal is built at Dubai International Airport
1971 – Dubai joins up with other emirates to form the UAE
1990’s – Launches a plan to become a major tourism destination and invests heavily in tourism facilities and infrastructure.
Today – How does tourism contribute to Dubai’s economy?
- Dubai was the 5th most popular city destination in 2014 – above New York City
- 11 million hotel guests stayed in 657 hotels in 2013
- Travel and Tourism accounted for 9.1% of total employment in Dubai in 2013
- Tourism contributes $4.3 billion to Dubai GDP (31%)
Dubai attracts tourists through its beaches, wildlife and zoo’s, Duty-Free shopping malls, water sports and posh hotels – The Burj Al Arab sells itself as ‘ the worlds most luxurious hotel’ where £980 a night is the cheapest room!
Case study – Kenya – The importance of tourism in developing/poorer countries
Kenya is an example of a poorer country. Poorer countries often rely more heavily on tourism to provide national income.
For comparison,Kenya GDP per capita (per person) – $1,845,51. USA GDP per capita – $48,350,00
How does tourism contribute to Kenya’s economy?
- 1.9 million tourists visited Kenya in 2012
- Tourism contributed $982 million to Kenya’s GDP in 2013 (11%)
- Travel and Tourism accounted for 10.4% of total employment in Kenya in 2013
Benefits of tourism to Kenya
- Increased conservation of wildlife and Savannah areas
- Many people are employment in the Travel and Tourism industry
- Extra jobs are created indirectly in construction, catering and supplying goods
- Tourists buy local produce such as food and souvenirs
- Small businesses such as street food stalls and taxis benefit from tourist customers