The impact of tourism on economy of the state

Abbosov Abdullo

3-3a-17

The impact of tourism on economy of the state.

Tourism is an important source of revenue to the treasury of any state. In many countries, tourism accounts for between a fifth and half of gross national product. Tourism employs 60% of the total workforce in the world. Tourism expands contributions to the country's balance of payments, develops areas of the world economy associated with tourism: production of consumer goods, trade, construction, transport, insurance and others. Every year, the number of industries involved in the tourism industry grows.

In short, tourism is an example of an economic policy pursued by governments because:

1. 
   it brings in foreign exchange
   
2. 
   it generates employment
   
3. 
   it creates economic activity
   

Tourism can help to raise money that it then invested elsewhere by the Government. There are two main ways that this money is accumulated.

Direct contributions are generated by taxes on incomes from tourism employment and tourism businesses and things such as departure taxes. Japan is known for its high departure taxes. Here is a video by a travel blogger explaining how it works.¹

Indirect contributions come from goods and services supplied to tourists which are not directly related to the tourism industry.

There is also the income that is generated through induced contributions. This accounts for money spent by the people who are employed in the tourism industry. This might include costs for housing, food, clothing and leisure Activities amongst others. This will all contribute to an increase in economic activity in the area where tourism is being developed.

1^ https://www.youtube.com/watch?v=ln8hAwJ_jZM&feature=emb_title