The Economic, Social, Environmental, and Psychological Impacts of Tourism Development

By Maksim Godovykh

This book aims to introduce the methods, measurement tools, and management practices necessary to explore and maximize the impacts of tourism development on residents' quality of life, health, and well-being at different types of tourist destinations.

• Language: English
• Publisher: Maksim Godovykh
• Release date: May 10, 2022
• ISBN: 9798223779414

Maksim Godovykh

Dr. Maksim Godovykh is leading research projects aimed at exploring the impacts of tourism development on the quality of life, health, and well-being of local communities. He also focuses on developing new methods and technologies to measure tourists’ and residents’ experience, combining psychophysiological techniques, self-reported surveys, online testing tools, social media analytics, and other metrics to evaluate pre-visit, on-site, and post-visit experience. His works have been published in leading academic journals and disseminated through books, encyclopedias, industry magazines, and news media. He has developed several government programs and organized over a hundred conferences, forums, trade shows, and workshops.

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Economic impacts of tourism

The primary economic benefits of tourism are traditionally associated with tourism revenues, employment, and investments (Johnson et al. 1994; Nunkoo and Smith 2014; Seetanah 2011). Global export revenues from international tourism exceeded 1.7 billion dollars before the COVID-19 pandemic in 2019, while these numbers significantly decreased to 759 billion dollars in 2021 (Figure 12). This decrease has affected industry worldwide, causing job losses and reduced revenues for many businesses.

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Figure 12. Global tourism exports in 2021 (UNWTO, 2023).

THE DIRECT ECONOMIC contributions of tourism are generated from services directly associated with tourists, including the accommodation sector, travel agents, transportation, and other tourist activities (Figure 13). At the same time, indirect impacts are associated with spending and capital investment in other industries on tourism activities, governmental spending on tourism, and supply chain effects related to the purchase of goods and services in the tourism sector. In simple words, indirect contributions of tourism are related to the income consumed by tourists’ goods and services that are not directly related to tourism (Figure 14). At the same time, the induced impacts of tourism are connected with the expenditures of people who are employed in the tourism industry. These expenditures include food, housing, clothing, and other purchases (Figure 15).

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Figure 13. Direct contribution of tourism.

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Figure 14. Indirect contribution of tourism.

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Figure 15. Induced contribution of tourism.

TOURISM CONTRIBUTES to employment and can be broadly classified as direct and indirect employment. Direct employment is associated with jobs that are related to the tourism industry such as hotel and restaurant personnel, tour guides, and tourism transport drivers, while indirect employment includes all jobs related to the production of indirect outputs of tourism. Therefore, tourism can significantly impact employment rates and contribute to economic growth.

The tourism industry can also have an impact on the local community's income and development. For example, tourism can bring in additional revenue for local businesses, which can lead to increased employment opportunities and higher incomes. In addition, increased economic activity can lead to improvements in the infrastructure of the region, including the development of new hotels, restaurants, and other tourist attractions. As a result, the tourism industry can be an essential driver of economic growth in many regions worldwide.

In conclusion, the economic impact of tourism is significant and complex, encompassing both direct and indirect contributions. Tourism contributes to employment rates and generates revenue for local businesses, governments, and the global economy. Tourism contributed 10.4% to global GDP and generated about 334 million jobs worldwide in 2019 (WTTC, 2022). The traditional international indicators of the economic contribution of tourism are presented in Figure 12.

Research on economic impacts of tourism: The study by Cannonier and Burke (2019) used panel data from Caribbean countries to investigate the relationship between tourism development and economic indicators. They found different patterns of relationships between tourism and economic growth in different countries. In Haiti, for every 10% increase in per capita tourism receipts, economic output increased by about 4%, while in Bermuda, a 10% increase in tourism receipts led to a 0.4% increase in real income per person. The study also found that inflation and government spending have negative effects on the economy. Finally, the study revealed an ambiguous relationship between trade and economic growth, consistent with previous research. Overall, this research highlights the importance of tourism to economic growth in small island Caribbean economies but also underscores the need for careful consideration of country-specific factors when formulating tourism policies and strategies.

Overall, tourism has substantial economic impacts, generating revenue through expenditures and contributing to global GDP and employment. The COVID-19 pandemic has significantly reduced tourism revenues worldwide, resulting in job losses and decreased business revenues. Tourism contributes to employment through direct and indirect jobs, stimulating income growth and development in local communities. Additionally, it drives economic growth by attracting investment, improving infrastructure, and creating new tourist attractions.

REFERENCES

Cannonier, C., & Burke, M. G. (2019). The economic growth impact of tourism in Small Island Developing States—evidence from the Caribbean. Tourism Economics, 25(1), 85-108.

WTTC (2023). Economic Impact Reports. Retrieved from: https://wttc.org/research/economic-impact

Political Impacts of Tourism

Tourism can have significant political impacts on both the host country and the tourist's home country. It can influence government policies and promote diplomatic relations between countries. Tourism can also contribute to the formation of national identities and impact political attitudes and behaviors.

One significant political impact of tourism is its ability to influence government policies. As tourism becomes a critical part of a country's economy, it can push the government to prioritize policies that promote tourism development, such as investing in infrastructure, improving transportation networks, and creating more job opportunities in the tourism industry. In some cases, tourism can even play a role in shaping government policies related to environmental conservation and cultural preservation, as the industry relies