Tourism brings in people from countries for holidays and adventure purposes which brings inflow of foreign exchange; which in turn boosts the economy. Tourism contributes to sales, profits, jobs, tax revenues, and income in an area. The most direct effects occur within the primary tourism sectors which are accommodation, restaurants, transportation, entertainment, and retail trade. Through secondary effects, tourism affects most sectors of the economy. One effect of tourism on GDP is that tourism affects the economy through the provision of employment. The main effect of tourism on GDP is the fact that tourism boosts the demand for goods and services. Such an increase in the consumption level increases the activity as the market consequently increases the GDP.
An area that has a high level of tourist-related activities creates a lot of employment opportunities for the local population. Hotels, amusement parks, tourist attractions and other such places need people to provide the necessary services. Since increases and decreases in employment affect GDP levels by influencing the spending habits of people, the employment provided through tourism has a positive effect on GDP. People who are employed have the income to spend and an increased level of consumption is a consequence of tourism on GDP. The tourism industry generates substantial economic benefits to both host countries and tourists home countries. Especially in developing countries, one of the primary motivations for a region to promote itself as a tourism destination is the expected economic improvement.
Economically it creates jobs, increased spending directly or indirectly; thereby promoting viability of local business, diversification of the economy, especially in countries that rely on a single industry.
BY: RABI ADAWIYYA UMAR