Tourism Multiplier Effect and Tourism Industry Impacts

Vocabulary flashcards covering the economic, sociocultural, and environmental impacts of tourism, including the multiplier effect and economic leakages, based on the provided handouts.

John Maynard Keynes

British economist who introduced the concept of the multiplier effect in the 1930s.

Tourism Multiplier Effect

In its simplest form, how many times money spent by a tourist circulates through a country's economy.

Direct Effects of Tourism Spending

Economic impacts experienced by the providers of tourist goods and services, directly increasing GDP through business profits, worker wages, and government sales taxes.

Indirect Effects of Tourism Spending

Economic impacts derived from intermediate consumption by suppliers of tourism goods and services, such as a restaurant buying ingredients or an airline purchasing fuel.

Induced Effects of Tourism Spending

Economic impacts generated when the tourism-derived income of workers and business owners is spent on non-tourism goods and services, such as paying school fees.

Economic Leakage

The act of money leaving the host country and ending up elsewhere, which weakens the multiplier effect over time.

Taxes (Economic Leakage)

Resources collected by the government through direct and indirect taxes that leave circulation and reduce the purchasing power of individuals and businesses.

Savings (Economic Leakage)

Portion of income saved by workers and business owners rather than spent on goods and services, decreasing induced economic impacts.

Imports (Economic Leakage)

Expenditures allocated for purchasing imported goods and services, which leak resources to other countries without generating local impact rounds.

Economy

The process or system by which goods and services are produced, sold, and bought in a country or region.

Foreign Exchange Earnings

Income generated for the host economy when international travelers trade their original currency for local currency to purchase goods and services.

Inflation (in Tourism)

The progressive increase in the general level of prices for land, houses, and food brought about when tourists place extra demands on local services.

Opportunity Costs

The cost of engaging in tourism instead of other forms of economic activity, such as investing in tourism instead of farming, gardening, or fishing.

Tourism Overdependence

A condition where a country becomes so reliant on tourism revenue that any change in demand leads to a major economic crisis.

Culture

Behavioral patterns, knowledge, and values that have been acquired and transmitted through generations.

Social Impact Aspect of Tourism

The study of how tourism affects people in groups, including residents (hosts) and tourists.

Cultural Impact Aspect of Tourism

The study of how tourism affects the culture of the host population and the culture of visitors.

Demonstration Effect

Behavioral changes occurring in local residents—especially young people—from observing tourists, which can cause resentment or crime when locals cannot obtain those lifestyles.

Acculturation

A process occurring when two cultures come in contact over time, exchanging ideas and products until convergence makes them similar, which reduces global cultural diversity.

Overcommercialization of Traditional Arts and Crafts

The loss of authenticity resulting when traditional dances, music, customs, and crafts are modified or performed out of context to suit tourist demands.

Natural Environment

Environmental features existing in nature, including climate, weather, land, topography, geology, water features, flora, fauna, and ecological systems.

Built Environment

Man-made physical features in a destination, including buildings, infrastructures, and archaeological and historic sites.

Visual Pollution

Aesthetic degradation caused by poorly designed tourist facilities, incompatible architectural styles, inappropriate landscaping, unattractive signs, and overhead utility lines.

Deforestation

The clearing or thinning of forests by humans.

Erosion

A geological process in which earthen materials are worn away and transported by natural forces such as wind or water.