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Tourism quantified

For many poor countries tourism is one of their main industries. Having a better understanding of how tourism contributes to the economies of these countries is a very important step that until know has not been much understood.

“How much tourism contributes to the economies of developing countries is controversial and often not measured rigorously. Focusing on Mozambique, a recent study by S. Jones in the Development Southern Africa journal presents a simple accounting tool – a tourist-focused Social Accounting Matrix – which makes it possible to estimate the economic contribution of various tourism sub-types. Multiplier analysis is applied to evaluate the strength of backward linkages from tourism to the domestic economy. The results show the sector is moderate in size but has the potential to contribute significantly to aggregate economic development. However, potential weaknesses are already evident and careful attention must be paid to the full tourism value chain.”

Implications from Institute for the Future:
Having a better understand of how tourism affects a countries economy may be very beneficial to sustained growth. Tourism packages arranged by tourism companies from outside the destination country, for example, don’t provide much profit for the destination country as the tourism company takes the majority of the profit and the destination country tends to offer the services at cost. Being able to quantify these effects and then properly advertise to potential tourists may change the how tourists spend their money. This is particularly important for eco-tourism companies that tend to attract tourists who are interested in helping local communities but may not actually be doing so.

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Sources:

Source: Development Southern Africa, Vol 27 (5)

South Africa Node April 2011 pg. 4
http://newsletters.clearsignals.org/SANode_April2011.pdf#page=4