Bargain Breaks

Economic Impacts of Tourism

Economic impacts are those that have results on money and its subsidiaries. Many of the economic after effects (positive) of tourism are as follows:

Generates income: tourism constitutes a demand for services and consumer goods that stimulate the production system. This causes an increase in income levels leading to an automatic increase in total national consumption.
Employment opportunities : tourism is a labor-intensive industry. It can cater all types of laborers skilled, unskilled and semi-skilled laborers. But one of the major draw back is that these employments created are seasonal.
Raising tax revenue : the main source of revenue to the state is from taxation from tourist activities. E.g., custom duties, income tax and other expenditure on tourism. The taxes are levied for the services provided by the central and state governments on tourism.
Infrastructural development in order to promote tourism, countries provides themselves with good infrastructure that facilitates the needs of the tourists.
Generating foreign exchange: the arrival of foreign tourists to a particular destination generates foreign exchange, which is a useful asset to the home country.

The negative impacts are as under:

Smuggling and black marketing because of excessive money flowing into the economy because of more investment.
Seasonal i.e., it does not have the property of frequent occurrence and the revenue generated may not be stable and steady.
It requires more investment of huge amount. Therefore it faces fewer participants unless the investors are highly motivated.
Transformation of regional economy. Only local areas are benefited because of tourism. Many more unexplored places are present in developing and underdeveloped countries, which can generate revenues and employment for localities.

There are also some factors that shape up these negative impacts of both socio cultural and economic activities. They are pointed out below: