Economics Chapter 15: GDP, Linkages, and Tourism

Gross Domestic Product (GDP)

• GDP measures the size and value of goods and services produced in one year.
• It refers to the dependency and interaction between different sectors.
• The strength of linkages between sectors determines the size of the impact multiplier.

Linkages

• Inter-industrial linkages refer to the co-operation of different segments of the economy.
• Example: Textile industry delivering bed-linens to hotels in the tourism industry.

Leakages

• Leakages occur when the tourism industry uses imported goods, reducing the positive effects on tourism.
• Example: Sourcing bed-linens from France instead of locally in South Africa.
• Leakages are lower in economies where businesses supply each other rather than importing goods.
• Smaller economies tend to have low linkages and high leakages.

Enclave Tourism

• Refers to tourism development where most of the economic benefits are captured by the tourism business.
• Example: Cruise liner operations.

Tourism Satellite Account (TSA)

• Also known as TSA, it is a statistical instrument used to calculate the size of the tourism sector's contribution to the economy.

Impacts of Tourism

• Positive impacts:
  • Job creation spreads to accommodation, transport, agriculture, construction, manufacturing, and retail.
  • Government revenue increases.
• Negative impacts:
  • Financial costs
  • Employment costs
  • Economic costs
  • Inflation/increased living costs
  • Opportunity costs (investing in tourism rather than other sectors)
  • Over-dependence on tourism (drop in demand – crisis?)

Carrying Capacity

• Not mentioned in detail, but refers to the maximum capacity of a destination to accommodate tourists without compromising its resources.

This quiz covers the concepts of Gross Domestic Product (GDP), linkages, leakages, and their impacts on tourism, including enclave tourism and carrying capacity.