TOURISM MULTIPLIER EFFECT (MIDTERM)

Multiplier

is derived from the fact that the value of tourism spending is multiplied by some estimated factor to determine the total economic impact

Tourism Multiplier Effect

which in its simplest form is how many times money spent by a tourist circulates through a country’s economy.

Direct

effects of this revenue are experienced by the providers of tourist goods and services, generating income for various economic agents and directly increasing a country’s gross domestic product (GDP).

Indirect

effects are derived from the intermediate consumption by suppliers of tourism goods and services.

Induced

In contrast, the income of workers and business owners provided by tourism revenue is spent acquiring different goods and services, leading to

Economic Leakage

is the act of money leaving the host country and ending up elsewhere.

Taxes

The resources collected by the government through direct (paid by individuals) and indirect taxes leave circulation, reducing the purchasing power of individuals and businesses

Savings

Part of the income of workers and business owners is saved and is not used to consume goods and services.

Imports

a portion of companies’ and individuals’ expenditures is allocated for purchasing imported goods and services