Economic impacts of Tourism Page # 1
Economic Impacts of Tourism
Daniel J. Stynes
Businesses and public organizations are increasingly interested in the economic impacts of tourism at national, state, and local levels. One regularly hears claims that tourism supports X jobs in an area or that a festival or special event generated Y million dollars in sales or income in a community. “Multiplier effects” are often cited to capture secondary effects of tourism spending and show the wide range of sectors in a community that may benefit from tourism.
Tourism’s economic benefits are touted by the industry for a variety of reasons. Claims of tourism’s economic significance give the industry greater respect among the business community, public officials, and the public in general. This often translates into decisions or public policies that are favorable to tourism. Community support is important for tourism, as it is an activity that affects the entire community. Tourism businesses depend extensively on each other as well as on other businesses, government and residents of the local community.
Economic benefits and costs of tourism reach virtually everyone in the region in one way or another. Economic impact analyses provide tangible estimates of these economic interdependencies and a better understanding of the role and importance of tourism in a region’s economy.
Tourism activity also involves economic costs, including the direct costs incurred by tourism businesses, government costs for infrastructure to better serve tourists, as well as congestion and related costs borne by individuals in the community. Community decisions over tourism often involve debates between industry proponents touting tourism’s economic impacts (benefits) and detractors emphasizing tourism’s costs. Sound decisions rest on a balanced and objective assessment of both benefits