Positive and Negative Economic Effects of Tourism

In rural and developing countries, tourism can bring a whole deal of economic and social benefits, but mass tourism is also associated with negative effects. Tourism can only be sustainable if it is carefully managed so that potential negative effects on the host community and the environment are not permitted to outweigh the financial benefits.

Positive Economic Affects:
Tourism creates many jobs, both indirectly and directly. Indirectly through sectors such as retail and transportation. Directly through direct employment within the tourism industry. This all creates the "multiplier affect", when these people spend their wages on goods and services, it leads to creating more jobs. Not only does the tourism industry provide opportunities for small-scale business enterprises, which is especially important in rural communities, but it generates extra tax revenues, such as airport and hotel taxes, which can be used for schools, housing and hospitals.

Negative Economic Affects:
Successful tourism relies deeply on establishing a basic infrastructure, such as hotels, roads and visitor centers. The cost of this infrastructure typically falls on the government, so it then has to come out of tax revenues. Money formed by tourism does not always benefit the local community however, as some of it spreads out to large international companies, such as hotel chains. Jobs created by tourism are often seasonal (holidays, school breaks, summer), and poorly paid, but tourism can push the cost of goods and services and local property prices. Destinations dependent on tourism can be adversely affected by events such as terrorism, natural disasters and economic recession.

Simm, Carole. "Positive & Negative Effects of Tourism." Travel Tips. Demand Media, 2012. Web. 08 May 2013.