International tourism: What, where and why

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(Last updated on: 14/05/2020)

The International tourism industry is stronger than ever before. Destinations around the world have developed their economies around international tourism and they are thriving (minus the ongoing Coronavirus pandemic, but I am confident that tourism will return so I am going to put that to one side for now). But what does it all mean?

In this article I am going to introduce you to the exciting world of international tourism- the industry that I have lived and breathed for so many years. The industry that I love. So here goes…

International tourism

What is international tourism?

Tourism is the generic term used to cover both demand and supply that has been adopted in a variety of forms and used throughout the world.

International tourism essentially refers to the activities undertaken by visitors, also known as the visitor economy. The tourism industry encompasses all activity that takes place within the visitor economy.

This includes activities that are directly related to the tourist, such as staying in a hotel, ordering a meal or visiting a tourist attraction. It also includes indirect activities, such as the transport company which delivers the food to the restaurant in which the tourist eats or the laundry company that has a contract with the hotel for cleaning bed sheets.

It is largely due to the indirect contributions to tourism, that defining and measuring the tourism industry is so difficult!

International tourism definitions

Tourism is a phenomenon with no universally accepted definition, owing to the complexity and individualism of the travellers themselves and the activities that they choose to undertake.

The most widely utilised definition of tourism, proposed by the World Trade Organisation (WTO) and United States (UN) Nations Statistics Division (1994), prescribes that in order to qualify as a tourist one must travel and remain in a place outside of their usual residential environment for not more than one consecutive year for leisure, business or other purposes.

Matheison and Wall (1982) on the other hand, do not impose a timeframe, simply stating that one must travel to a destination temporarily.

Leiper (1979) believed that defining tourism is more complex than this, proposing that there are three approaches that can be taken. The economic stance focuses on tourism as a business, the technical stance focusses on the tourist in order to provide a common basis by which to collect data and the holistic stance attempts to include the entire essence of the subject.

The Cambridge Dictionary define tourism quite simply as; ‘the business of providing services such as transport, places to stay or entertainment for people who are on holiday’.

As there is no universal definition for the term ‘international tourism’, for the purposes of this article I will define it as follows:

‘International tourism is the act of travelling to another country other than where you live for no more than one year for purposes of leisure or business’.

Why is international tourism important?

International tourism is hugely important. There are a number of key reasons for this that I will outline below.

Value to the economy

International tourism can help economies to bring in money in a number of different ways. Below I have provided some examples of the positive economic impacts of tourism.

Foreign exchange earnings

The importance of international tourism is demonstrated through foreign exchange earnings. 

Tourism expenditures generate income to the host economy. The money that the country makes from tourism can then be reinvested in the economy.

How a destination manages their finances differs around the world; some destinations may spend this money on growing their tourism industry further, some may spend this money on public services such as education or healthcare and some destinations suffer extreme corruption so nobody really knows where the money ends up!

Some currencies are worth more than others and so some countries will target tourists from particular areas. Currencies that are strong are generally the most desirable currencies. This typically includes the British Pound, American, Australian and Singapore Dollar and the Euro. 

Tourism is one of the top five export categories for as many as 83% of countries and is a main source of foreign exchange earnings for at least 38% of countries.

Contribution to government revenues

The importance of international tourism is also demonstrated through the money that is raised and contributed to government revenues. Tourism can help to raise money that it then invested elsewhere by the Government. There are two main ways that this money is accumulated. 

Direct contributions are generated by taxes on incomes from tourism employment and tourism businesses and things such as departure taxes. 

According to the World Tourism Organisation, the direct contribution of Travel & Tourism to GDP in 2018 was $2,750.7billion (3.2% of GDP). This is forecast to rise by 3.6% to $2,849.2billion in 2019.

Indirect contributions come from goods and services supplied to tourists which are not directly related to the tourism industry. 

There is also the income that is generated through induced contributions. This accounts for money spent by the people who are employed in the tourism industry. This might include costs for housing, food, clothing and leisure Activities amongst others. This will all contribute to an increase in economic activity in the area where tourism is being developed. 

Employment generation

The importance of international tourism can be demonstrated through employment generation.

The rapid expansion of international tourism has led to significant employment creation. From hotel managers to theme park operatives to cleaners, tourism creates many employment opportunities. Tourism supports some 7% of the world’s workers. 

There are two types of employment in the tourism industry: direct and indirect. 

Direct employment includes jobs that are immediately associated with the tourism industry. This might include hotel staff, restaurant staff or taxi drivers, to name a few.

Indirect employment includes jobs which are not technically based in the tourism industry, but are related to the tourism industry.

It is because of these indirect relationships, that it is very difficult to accurately measure the precise economic value of tourism, and some suggest that the actual economic benefits of tourism may be as high as double that of the recorded figures!

Contribution to local economies

The importance of international tourism can be further seen through the contributions to local economies.

All of the money raised, whether through formal or informal means, has the potential to contribute to the local economy. 

If sustainable tourism is demonstrated, money will be directed to areas that will benefit the local community most. There may be pro-poor tourism initiatives (tourism which is intended to help the poor) or volunteer tourism projects. The government may reinvest money towards public services and money earned by tourism employees will be spent in the local community. This is known as the multiplier effect. 

Overall economy boost

International tourism boosts the economy exponentially.

This is partly because of the aforementioned jobs that tourism creates, but also because of the temporary addition to the consumer population that occurs when someone travels to a new place.

Just think: when you travel, you’re spending money. You’re paying to stay in a hotel or hostel in a certain area – then you’re eating in local restaurants, using local public transport, buying souvenirs and ice cream and new flip flops. As a tourist, you are contributing to the global economy every time you book and take a trip.

For some towns, cities and even whole countries, the importance of international tourism is greater than for others. In some cases, it is the main source of income.

For example, according to the World Travel and Tourism Council, tourism accounts for almost 40% of the Maldives’ total GDP. In comparison, it’s less than 4% in the UK and even lower in the US! In the Seychelles the number is just over 26% while in the British Virgin Islands it is over 35% – so tourism is vastly important in these nations.

Value to society

The importance of international tourism is not only recognised through economic factors, but there are also many positive social impacts of tourism that play an important part. Below I will outline some of the social gains from tourism.

Preserving Local Culture

It is the local culture that the tourists are often coming to visit and this is another way to demonstrate the importance of international tourism.

Tourists visit Beijing to learn more about the Chinese Dynasties. Tourists visit Thailand to taste authentic Thai food. Tourists travel to Brazil to go to the Rio Carnival, to mention a few…

Many destinations will make a conserved effort to preserve and protect the local culture. This often contributes to the conservation and sustainable management of natural resources, the protection of local heritage, and a renaissance of indigenous cultures, cultural arts and crafts. 

Strengthening Communities

The importance of international tourism can also be demonstrated through the strengthening of communities.

Events and festivals of which local residents have been the primary participants and spectators are often rejuvenated and developed in response to tourist interest.

The jobs created by international tourism can also be a great boost for the local community. Aside from the economic impacts created by enhanced employment prospects, people with jobs are happier and more social than those without a disposable income. 

Local people can also increase their influence on tourism development, as well as improve their job and earnings prospects, through tourism-related professional training and development of business and organisational skills.

Provision of Social Services

The importance of international tourism is shown through the provision of social services in the host community.

The international tourism industry requires many facilities/ infrastructure to meet the needs of the tourist. This often means that many developments in an area as a result of tourism will be available for use by the locals also. 

Local people often gained new roads, new sewage systems, new playgrounds, bus services etc as a result of tourism. This can provide a great boost to their quality of life and is a great example of a positive social impact of tourism. 

Commercialisation of Culture and Art

International tourism can see rise to many commercial business, which can be a positive social impact of tourism. This helps to enhance the community spirit as people tend to have more disposable income as a result. 

These businesses may also promote the local cultures and arts. Museums, shows and galleries are fantastic way to showcase the local customs and traditions of a destination. This can help to promote/ preserve local traditions.

Revitalisation of Culture and Art

Some destinations will encourage local cultures and arts to be revitalised. This may be in the form of museum exhibitions, in the way that restaurants and shops are decorated and in the entertainment on offer, for example. 

This may help promote traditions that may have become distant. 

Preservation of Heritage

Another reason for the importance of international tourism is the preservation of heritage. Many tourists will visit the destination especially to see its local heritage. It is for this reason that many destinations will make every effort to preserve its heritage. 

This could include putting restrictions in place or limiting tourist numbers, if necessary. This is often an example of careful tourism planning and sustainable tourism management. 

Empowering communities

International tourism can, if managed well, empower communities. While it is important to consider the authenticity in tourism and take some things with a pinch of salt, know that tourism can empower communities.

Small villages in far off lands are able to profit from selling their handmade goods. This, in turn, puts food on the table. This leads to healthier families and more productivity and a happier population.

Value to the environment

Whilst most media coverage involving international tourism and the environment tends to be negative, there are some positives that can come from it: demonstrating the importance of tourism once again.

Protecting nature

Some people think that international tourism is what kills nature. And while this could so easily be true, it is important to note that the tourism industry is and always has been a big voice when it comes to conservation and the protection of animals and nature. Tourism organisations and travel operators often run (and donate to) fundraisers. 

As well as this, visitors to certain areas can take part in activities that aim to sustain the local scenery. It’s something a bit different, too! You and your family can go on a beach clean up walk in Spain or do something similar in the UAE. There are a lot of ways in which tourism actually helps the environment, rather than hindering it!

International tourism statistics

Tourism brings with it huge economic potential for a destination that wishes to develop their tourism industry. Employment, currency exchange, imports and taxes are just a few of the ways that tourism can bring money into a destination.

In recent years, tourism numbers have increased globally at exponential rates, as shown in the World Tourism Organisation data below. There are a number of reasons for this growth including improvements in technology, increases in disposable income, the growth of budget airlines and consumer desires to travel further, to new destinations and more often.

Here are a few statistics providing by the UN and Statistica:

Inbound tourism
Inbound tourism
Outbound tourism

Here are a few facts about the economic importance of the tourism industry globally:

  • The tourism economy represents 5 percent of world GDP
  • Tourism contributes to 6-7 percent of total employment
  • International tourism ranks fourth (after fuels, chemicals and automotive products) in global exports
  • The tourism industry is valued at US$1trillion a year
  • Tourism accounts for 30 percent of the world’s exports of commercial services
  • Tourism accounts for 6 percent of total exports
  • 1.4billion international tourists were recorded in 2018 (UNWTO)
  • In over 150 countries, tourism is one of five top export earners
  • Tourism is the main source of foreign exchange for one-third of developing countries and one-half of less economically developed countries (LEDCs)
There is a wealth of data about the economic value of tourism worldwide, with lots of handy graphs and charts in the United Nations Economic Impact Report.

International tourism: Conclusion

International tourism is arguably the largest industry in the world. There are many benefits of international tourism to local economies as well as society and the environment. The many components of tourism that make up the industry are integral to livelihoods the world over.

Further reading

  • An Introduction to Tourism: a comprehensive and authoritative introduction to all facets of tourism including: the history of tourism; factors influencing the tourism industry; tourism in developing countries; sustainable tourism; forecasting future trends.
  • The Business of Tourism Management: an introduction to key aspects of tourism, and to the practice of managing a tourism business.
  • Tourism Management: An Introduction: gives its reader a strong understanding of the dimensions of tourism, the industries of which it is comprised, the issues that affect its success, and the management of its impact on destination economies, environments and communities.

1 Comment
  1. Gabriella Pappadà

    Thanks for your article. If you are interested in publishing an article summarizing the impact of covid 19 on international tourism, we will publish in quarterly journal of Labour economics
    Published by Franco Angeli in Milan.
    I am the director of Ceres
    Socio economic centre

    Reply

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Hi, am Dr Hayley Stainton

I’ve been travelling, studying and teaching travel and tourism since I was 16. Through Tourism Teacher I share my knowledge on the principles and practice of travel and tourism management from both an academic and practical perspective.

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