Macroscopic Perspective on Tourism and Hospitality

• Tourism and hospitality analyzed macroscopically considers the extensive economic, social, and environmental effects of the industry on sizable areas.
• This analysis includes tourism's contributions to a country's GDP, employment rates, infrastructure advancement, and overall social well-being.
• The macro perspective also accounts for how government policies, international relations, and global events impact tourism and hospitality.

Economic Impact Of Tourism

• Tourism's economic impact equals the net economic change in a host location due to tourist spending.
• Tourist expenditure becomes income for service providers, who spend it on wages, supplies, etc.
• This spending creates a ripple effect throughout the economy.

Direct Impacts

• Direct impacts originate from tourists' immediate spending within the destination.
• This includes spending on lodging, food, transport, entertainment, and souvenirs.
• Direct revenue is received by hotels, restaurants, tour operators, and retail shops.
• Tourism directly generates employment in these sectors.
• Increased tourism can result in new tourism-related businesses.

Indirect Impacts

• Indirect impacts arise from tourism businesses' spending on operational goods and services.
• This incorporates supplies from farms, manufacturers, and other service providers.
• Supporting industries receive indirect revenue as a result of tourism.
• Tourism indirectly stimulates employment in supporting sectors.
• Hotels purchasing linens from a textile company exemplifies indirect revenue.

Induced Impacts

• Induced impacts result from the spending of those employed directly or indirectly by tourism.
• When employees of hotels, restaurants, and supporting industries spend their earnings, they contribute to the revenue of community businesses.
• Tourism-related income circulates through the wider economy.
• Induced employment is fostered across different sectors as businesses expand to meet consumer demands of tourism workers.
• An example of induced impact is a hotel worker spending wages at a grocery store or cinema.

Multiplier Effect

• The multiplier effect describes the comprehensive economic impact from initial tourist spending.
• It accounts for the direct, indirect, and induced impacts of tourist expenditure.
• Tourism investments can lead to a greater increase in economic activity and income.
• The multiplier size depends on import leakage and the strength of local supply chains.
• A greater multiplier means that each tourist dollar generates greater overall economic benefit.

Types of Multipliers

• Output Multiplier: Measures the total change in output (sales) throughout the economy resulting from a change in tourist spending.
• Income Multiplier: Measures the total change in income (wages, profits, rents) throughout the economy resulting from a change in tourist spending.
• Employment Multiplier: Measures the total change in employment (number of jobs) throughout the economy resulting from a change in tourist spending.
• Type I Multiplier: Combines direct and indirect effects to measure the total impact in the local economy
• Type II Multiplier: Combines direct, indirect, and induced effects to measure the total impact in the local economy

Leakage

• Leakage refers to tourism revenue failing to circulate within the local economy.
• Import leakage is when tourism businesses buy goods/services from outside the local area, weakening the multiplier effect.
• Saving leakage happens when tourism revenue is saved instead of reinvested locally.
• High leakage diminishes the overall economic benefits of tourism, as money leaves the region.
• Reducing leakage helps to maximize tourism’s economic benefits via local sourcing and investment.

Economic Benefits

• Increased GDP: Tourism raises a country's GDP through tourist spending and related activities.
• Job Creation: Tourism creates employment opportunities in accommodations, food service, transportation, and entertainment.
• Infrastructure Development: Tourism development can improve infrastructure, benefiting residents and visitors.
• Foreign Exchange Earnings: International tourism brings in foreign currency to finance imports and reduce trade deficits.
• Tax Revenues: Tourism generates tax revenue for governments through sales taxes and hotel taxes, useful for public services and infrastructure.
• Regional Development: Tourism can stimulate economic growth in undeveloped areas by attracting investment and jobs.
• Diversification: Tourism helps diversify local economies, providing income sources and reducing reliance on traditional industries.

Economic Costs

• Enclave Tourism: Tourism companies import as much as possible to maintain quality instead of buying locally.
• Infrastructure Costs: Developing tourism infrastructure can be expensive.
• Increased Prices: Tourism can raise prices, increasing the cost of living for locals.
• Resource Depletion: Tourism can strain water, energy, and land resources, causing environmental damage.
• Seasonality: Tourism demand can vary, causing employment and income fluctuations.
• Dependence: Over-reliance on tourism makes economies vulnerable to external issues.
• Opportunity Costs: Investing in tourism may divert resources from other sectors.

Tourism and hospitality from a macroscopic view considers the broad economic, social, and environmental effects. This perspective includes contributions to a country's GDP, employment, and infrastructure. It also accounts for government policies, international relations, and global events that impact tourism.