Direct spending by tourists and the associated economic multiplier effect
Tourism generates different types of income for a community: business income, wage earnings, share earnings, rates and levies. Direct spending by visitors has a positive impact on business profitability and employment growth. The money that is then circulated and re-spent in the economy is often referred to as indirect spending or the multiplier effect. Because much of a region’s tourism patronage comes from metropolitan centres, it is an effective way to redistribute wealth from urban to rural areas.
A varied economic base
The expectations and needs of visitors can often lead to the creation of new businesses and commercial activities. This builds a more diverse economic base and reduces reliance on one or two traditional industries, which is often the case in rural communities.
Tourism is a labour intensive industry and operates 24 hours a day, seven days a week. There are many opportunities for employment for young people and for people interested in part time or casual work. While some of the employment is skilled, there are also opportunities for people less skilled and who lack formal qualifications.
A thriving tourism industry supports growth in other sectors, such as transport, construction, agriculture and retailing. As tourism increases, there are more opportunities for small business to develop.
Increased commercial and residential development
Tourism development often results in increased revenue to councils through rates and other charges. Tourism can act as a shop window for the lifestyle of the area. It is increasingly common for people who visit and are impressed with the area to return as residents, thereby increasing demand for housing and other services.
Social BenefitsIncreasing community facilities
Tourism can stimulate new and expanded community facilities and infrastructure initiatives, such as the improvement of retail, restaurant and entertainment options, transport services, education and sporting facilities. These increase the quality of life for the community, which may not otherwise warrant the improvement, based on the residential population alone.
Preservation of cultural heritage
Tourism activity often prompts the conservation of cultural heritage, either as a result of increased awareness and pride, or because it can be justified on economic grounds as a tourist attraction.
A broadened community outlook
Tourism can encourage communities to widen their outlook and to embrace new ideas. It provides opportunities for residents to interact with other people, lifestyles and cultures.
Increased community awareness and pride
Attracting visitors to an area can heighten local awareness and interest, resulting in a greater sense of pride and ownership. The community takes stock of its assets and distinctive characteristics. This increase in pride can lead to community celebration or the revival of cultural activities. Knowing that others have travelled across the state, country or world to visit can considerably boost a community’s collective ego.
In many areas tourism has helped to slow or halt the drift to cities, by not only making the local area and its employment opportunities more attractive to young people, but by attracting ‘sea changers and ‘tree changers’ from major population bases.
Environmental benefitsWithout long term strategic planning, tourism development can be detrimental to the local environment. Embarking on major promotional campaigns for an area without first ensuring that the necessary infrastructure is in place can have devastating effects on the environment and resident community, with potentially costly consequences.
Tourism development based on an environmental and commercially sustainable approach, integrated into the wider planning process, can generate significant benefits for the local environment, business and community. It requires proper planning and land management policies to ensure that the environment (whether it is beaches, parks or gardens, heritage landscapes or streetscapes) is preserved.
On the credit side, tourism has been partly responsible for increased interest in, and concern for, the natural and built environment and its condition. Effective visitor information services, interpretative signing, guided tours etc can raise the profile of natural assets and issues surrounding them. In many cases tourism has provided an economic argument for conservation, preservation and restoration of natural and built resources.