Th4.3: OS - Development of Tourism Flashcards
Some countries decided to take advantage of their climate and geography to build up a tourism industry, providing them with…
providing them with funds to develop their economy and improve living standards
What does the income elastic nature of tourism mean?
that as the global economy grows, demand for the industry will increase even further, allowing the developing country to continue development, but will suffer in recessions
What do tourists represent?
a source of foreign currency, which will fill the currency gap, so countries will be able to fund their imports without negative consequences
How is the tourism industry associated with an increase in imports?
holidaymakers’ demand for products from their home countries, meaning the currency gap may not close at all
What are countries likely to attract and what will this do?
investment from transnational hotel companies, who will also bring knowledge with them, which can then be used e.g improvements in infrastructure - this will have a multiplier effect through the economy
What are the jobs like that involve tourism?
jobs are created locally since the tourism industry relies heavily on low skilled workers who know the local area, rather than high skilled - very labour intensive
Why will the government see higher tax revenues?
due to higher income and higher profits - can provide funds to allow countries to diversify
However, how is the multiplier of this effect limited?
the industry is seasonal and involves low skilled, low paid jobs
What else is a problem regarding holiday destinations?
they can go in and out of fashion, meaning some areas will see a loss of employment and investment may only be short-term
Why will a large amount of wealth created by withdrawn?
as TNCs repatriate their profits, causing problems involving capital flight
What else can the country suffer from?
a larger number of externalities - pollution, waste, environmental damage and impact on culture
