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Tourism and
Hospitality
Chapter 6
Learning Outcomes
At the of this chapter, you should able to:
Direct Employment
Generated as a result of providing goods and
services directly to tourist in hotels,
restaurants, bars, nightclubs, and the like.
Indirect Employment
Consist of those positions that are
associated with other tourism related
activities but are used for both the local
resident and the tourist.
There are three types of employment generated by
tourism and hospitality. These are:
Induced Employment
Refers to people working in positions only
peripherally related to tourism and
hospitality, but generated because of it.
Examples are construction workers,
merchants, and professionals such as
doctors and accountants who service the
employees working directly in tourism
related.
Balance of payments
Tourism and hospitality has a major
influence on the country’s balance of
payments. Balance of Payments is an
accounting flow of goods, services, and
funds in and out of the country during a
given period. If a country pays or agrees to
pay more money that it receives, it has a
deficit in its balance of payments. If it
receives more money than it sends or
exports, it has surplus in its balance of
payments.
Balance of Payments
Most of the countries, particularly those
with good tourism and hospitality facilities but
little industrial or agricultural export
potential, appreciate the contribution that
incoming tourists can make to their balance of
payments account. They therefore take steps
to maximize their tourist receipts through the
development of new attractions, promotions,
subsidized exchange rates, and other
measures. They also try to keep their own
residents within the country by taxation on
outgoing tourists, limitations on foreign
exchange availability, or refusal to grant exit
permits.
Investment
and development
Once an area has become economically
successful, businessmen and government
agencies may be influenced to invest in
tourism and hospitality and other industries
in that area. This is known by economists as
an accelerator concept.
The negative
economic effects
of tourism
and hospitality
The negative economic effects of
Tourism and Hospitality
While most countries encourage tourism
and hospitality for its economic benefits,
there are some negative economic aspects
as tourism and hospitality that have to be
identified and discussed.
Inflation and Land Values
The inflationary effects of tourism and
hospitality can arise different ways. Rich
tourist can afford to buy items at high
prices. Retailers, realizing that their profits
can be greatly increased by catering to
tourist , increase their prices on certain
products and provide more expensive goods
and services. Such stores can compete more
successfully with those catering to local
residents. They can afford to pay higher
rent and taxes which are passed on to the
customers through higher prices. Thus, local
residents have to pay more for their goods.
Inflation and land values