The Economics of Tourism essay

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The paper examines the issue of economies of tourism. It defines the term and offers some examples of economies of tourism. The paper also gives the advantages and disadvantages of economies of tourism.


Tourism is an important industry in many countries of the world. Countries like Greece, Egypt, Libya, Kenya and Israel depend on tourism. In the US, tourism is a big industry that employs over 7.3 million people. The term economics of tourism refers to tourism as an industry that is both an employer and contributor to the GDP.Economics of tourism thus looks at tourism as an important industry in a country. It equates the importance of tourism to the importance of other industries like manufacturing and agriculture. It, however, acknowledges that tourism is a unique industry. This is because tourism is not defined as an industry by the traditional roles of supply and demand. As an industry, it does not also deal with tangible goods. It is a service industry that is unique (Chad, 2003).

Tourism plays a remarkably important role in the lives of many people in the world. As people travel for business and leisure across the world, the economies of most countries are improved. Not only Countries are affected by tourism, but companies and individuals. The economy of the travel industry world wide rests on the hands of the tourism sector. This includes air travel, water travel and land travel. Thus, and airlines like British Airlines and other airline depend on the tourism industry for business. Road travel companies and rail companies also depend on tourism to stay in business. The hospitality industry is solely dependent on tourism. The hospitality industry refers to the food and beverage industry that provide food to millions of travelers all over the world. It also provides accommodation services to people all over the world. A good example of economies of tourism is the entertainment industry. This encompasses entertainment venues such as Casinos, amusement parks, music venues and theaters among other venues (Chad, 2003).

The advantages of economies of Tourism

Tourism as an industry plays a central role in the economy of any country in the world. One of the things that tourism does to the economy of a country is that it provides employment. Millions of people all over the world are employed in the tourism industry. In the US, 7.3 million people are employed in the tourism industry. In 29 states in the US, tourism is either the first second or third largest employer. Tourism employs a lot of people because it cuts across many sectors and departments. The transport sector that is dependent on tourism employs people like drivers, taxicab managers, pilots and stewards among other employees. The tourism industry also employs people like caterers, hoteliers and restaurant managers (Losekoot & Wood, 2001).

Another advantage of economies of tourism is that it increases the gross national product of a country. This is because when tourists come to a country they spend so much money there that goes to increase the GDP of that country. For example, the US received $ 110 billion from tourism in 2008. This is a substantial amount of money. This is because, in some countries, the quoted amount is almost three times their GDP. A country like Spain received in the same year $61.6 billion. Germany, on its part, got $40 billion. These amounts demonstrate that tourism is a vital contributor to the GDP of any country (UNCTAD, 1971).

Another importance of economies of tourism is that it leads to the development of local industries in the visited country. The cottage industries thrive and prosper. This is because most tourists want to take souvenirs with them back to their countries. The prosperity of cottage industry also means that culture is preserved. This is because most cottage industries manufacture items that have cultural value and significance. This helps to preserve culture and tradition that are quite important to a country (UNCTAD, 1971).

Another advantage of the economies of tourism is that it leads to the development of infrastructure in the country. Infrastructure includes things like roads and telecommunications. This is because governments understand that tourist will only visit the countries where they can travel well. The government will thus put all efforts to make sure that transport networks like roads and rails are in good order. The building of infrastructure opens the country to development. Other industries that are not even related to tourism start to benefit. These include industries like the manufacturing and agricultural industries in a country (Blanke & Chiesa, 2009).

The economies of tourism are also instrumental in building good relationships between countries. This is because as people move from one country to another, they build relationships that are vital for international relationships. Good international relationships are vital for a country to thrive in this era of globalization. This is because they promote international trade (Losekoot & Wood, 2001).

With more tourists travelling for medical reasons or to take advantage of pricing and regulatory practices in some countries, Countries benefit. Also, the practice of educational tourism is a big boost to the targeted countries. This is because these two forms of tourism promote learning in a country. The visited country will improve its learning facilities and education will improve (Manning, 1999).                                                                                    

Disadvantages of economies of tourism

Economies of tourism post some disadvantages to the country. This is because the tourism industry has some ill effects to a country. One of these ill effects is that tourism sometimes leads to the introduction of dangerous diseases to the country. For example, in 2009, the US experienced an outbreak of West Nile virus. This is a disease that affects livestock and human beings. The livestock affected include horses, pigs, and cats and donkeys. It is a dangerous disease. In the US, the disease is thought to have originated from Greece where it comes with a tourist. Most contagious diseases are spread through tourism. The treatment of contagious diseases is very expensive. This is because most of them do not have medicinal cures (Blanke & Chiesa, 2009).

Another disadvantage of tourism is that it promotes bad habits and vices in the country. These include habits like gambling and prostitution. The said habits lead to the destruction of the morals of a country. These two are also criminal offences in most countries. In the US gambling is not a criminal offence. The two quoted vices lead to other crimes and criminal activity. They are tied to crimes like robbery and assault (Manning, 1999).

Tourism opens a country to attacks by terrorists. This is because terrorists pose as tourist when they enter a country. The damage they do to a country is irreparable. In the September 11 terrorist attacks, in America, it was found out that the attackers had come into the country as students. They had taken advantage of educational tourism to spy on America and attack it. The same trick was used by terrorists in Britain. They used education as a gateway to get into the country. Also, tourism can lead to the death of local industries. This is especially so in this era and age of globalization. This is because tourists demand the best products from the original manufacturer. Thus, those who serve them might be forced to keep on importing goods to meet the needs of the tourists. This is always at the expense of the local industries that produce similar goods (Losekoot & Wood, 2001).

All in all, tourism plays a very important role in the economy of most countries. It’s the chief foreign cash provider for countries like Greece Israel and Egypt among other countries. It provides employment to millions of people all over the world. It opens up a country to development. Tourism also has a dark side. That is it can open a country to dangerous diseases and terrorist attacks. The government should work hard to make sure that tourism continues to prosper in the country.

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