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Tourism as a Very Important Sector in the World Economy Research Paper


Tourism has several effects on any given community. They include cultural, social and economic effects. Unlike the social and cultural effects that result from the interaction between the various parties, economic effects are associated with the ability of the industry to contribute positively in the economic development of the nation in question.

To enhance the economic development of a nation, the government has to be actively involved in nearly all the aspects of the sector especially in providing infrastructure and safety. This paper focuses on economic development as far as tourism is concerned.

How to enhance economic development via tourism

To bring out the full potential of the tourism industry in economic development, several aspects need to be put into consideration. Nations should embrace effective governance practices that reflect the changing global business and policy environment. This will play a pivotal role in the development of an integrated, whole-of-government approach to tourism.

Consequently, the government will be able to support greener and more inclusive tourism growth. Most of the nations lack not only an effective national tourism strategy but also a workforce development strategy.

This leads to the lack of appropriately skilled workers in the industry. Governments need to assume a greater leadership role in shaping the training and the education agenda to fully address the shortage of labor and skills within the industry.

In the development and implementation of policies in the industry, governments should set an evaluation policy or rather program. Evaluation is the most appropriate means of demonstrating the value of tourism to an economy. OECD argues that “adhering to an evaluation road map can help countries to improve the evaluation process” (7).

With a good evaluation process in place, governments are able to carry out continual development of the several aspects of the tourism sector to enhance its contribution to not only national but also global economic development.

The government should prepare adequately to survive in the highly competitive global economy as far as tourism attraction is concerned. Many nations have realized the economic value attached to the tourism industry.

The Organization for Economic Cooperation and Development (OECD) which is based in Paris recently released a report that identified the scope of international tourism in different regions of the world. According to the report, the OECD member countries play a pivotal role in international tourism. They represent 66% of the 2010 global arrivals while the European Union member countries accounted for 50.2%.

Domestic tourism consumption represents a highly significant share as far as the total tourism economy is concerned. It constitutes over 80% of the economy for Chile, Japan, Mexico, Germany, the United States of America and the United Kingdom. The OECD report also showed that there is an emerging trend in the tourism destination countries which outperforms the cooperation in terms of the GDP and employment.

Some of the countries that hold significant potential as sources of growth of traditional tourism destinations are South Africa, Argentina, India, Brazil, Indonesia and Egypt (OECD 3). This calls for governments to increase resources allocated for the development of the sector.

The government along with other key parties in the tourism sector such as the hospitality industry should join forces in marketing tourist attraction features that are present in the nation. Following the recent technological advances, the internet is one of the key instruments in marketing due to its global presence.

The internet as an asset in enhancing economic development via tourism

The adoption of internet services within the tourism sector leads to an increased flow of information about the availability of tourist sites to potential customers/tourists. Owing to this, potential tourists are able to gather the information they require to make informed decisions about the places they choose to tour.

The use of internet services reduces the time as well as the cost that a given tourism agency needs to reach their target group. With the advent of social networking cites such agencies reach multitudes of potential customers within a short time. This acts as a major asset to the tourism sector since the time and money they would have used in reaching the target market using other means can be channeled to other import aspects within the sector.

Some internet services allow users to create profiles. With such profiles, the tourism sector can be able to gather information about the potential customers/tourist groups. As the old adage goes, information is power-the sector can utilize the information to make informed decisions as far as the provision of their services is concerned.

Since most of the countries have embraced internet technologies to market their tourist attraction sites, the tourism agencies in a given country can use that to their advantage as far as competitiveness is concerned.

The agency in question is able to compare the features in other sites and initiate some changes to ensure that it does not lag behind. Additionally, the information provided in other websites may help the agency in question to adjust its costs to remain competitive within the region.

Internet is a basic tool in establishing business relationships between various parties within the tourism sector as far as e-marketing is concerned. Tourism business over the internet is on the increase across the world. For instance, internet activities in tourism make up 30% activities in the US tourism, while 50% transactions closed in e-commerce are associated with tourism.

The relationships fall in three categories. First, business-to-consumer relationships (B2C), defined as any electronic transaction between an enterprise and a final consumer, ranging from requesting information about operations to actually contracting a tourism service.

Second, business-to-business relationships (B2B), defined as any electronically-conducted commercial transaction between businesses, whether suppliers of goods and services or intermediaries (Garau et al. 77).

Finally, relationships between businesses and administrations (B2A), defined as electronic relationships between enterprises and governmental organizations, which range from paying taxes to processing documentation for business start-ups to relationships with the social security system.

How tourism contributes to the economic development of a nation

Provost and Claire (3) acknowledged that tourism is not only a substantial source of foreign currency but also investment for many of the world’s poorest countries. This is in line with the view of the World Tourism Organization that responsible and sustainable tourism plays a pivotal role in the eradication of poverty.

It is also an important aspect the World’s attempt to meet the millennium development goals. However, not all the people share the same concerns as far as tourism and economic development is concerned. Provost and Claire’s article records that some people in Colombia and Nazareth banned tourists claiming that they do not contribute much to the economy (7).

Tourism provides a source of income to not only the key stake holders in the industry but also to the communities located in rural areas that have tourist attraction features. A sample case study done by Kesar and Ferjanic show that tourism is important in the development of entrepreneurs in any given locality, which is essential in the economic development of a nation.

The study is based on the manufacture of wine for the tourists in Croatia-wine tourism. It is a perfect example of how the local communities in areas that attract large numbers of tourists can benefit. Data released in 2008 by the Central Bureau of Statistics in Europe showed that during that year, Croatia recorded nearly 11.3 million tourist arrivals and 57.1 million overnight stays (Kesar, and Ferjanic 1636).

Most of these figures are related to the Croatian Adriatic (coastal) tourist region that accounts for nearly 95% of the nation’s tourism performance-5% is generated by the continental region of Croatia. The local communities have embarked on the production of wine, mostly small scale entrepreneurs, with the tourists as the target market.

Kesar and Ferjanic documented that data released by the Croatian Institute of Viticulture, Enology and Pomology (IVEP) showed that in 2008, the nation had more than 17,000 wine producers with 84% of all the vineyards being smaller than 1 hectare (1638). Only 25 wine producers had vineyards that were larger than 50 hectares. This provided employment and a source of income for most of the local communities.

Rural communities located in tourist attraction centers can also be directly involved in the tourism industry by providing certain tourism facilities.

For instance, research has shown that Croatia has 379 registered tourist rural households that offer accommodation with the total number of beds being approximately 933 (Kesar and Ferjanic 1639).

The tourist rural households offer food and drinks to the tourists. Such a phenomenon significantly increases a nation’s ability to earn foreign currency enhancing it economic growth.

Maintenance of tourist attraction features

Governments need to protect tourist attraction centers to enhance the maximization of the resources. According to Travis (356), the concept of natural upland zone protection is important in the tourism industry. It is greatly associated with the protection of national parks with great emphasis on mountain areas, deserts, rainforests as well as other ecosystem types.

It seeks to “protect and conserve various features in their natural state, retain their natural characteristics, protect flora and fauna and ensuring their inviolability against forces of development” (ibid). It also advocates for the maintenance of ecosystems in their equilibrium state besides regenerating their natural landscape.

Last but not least, the concept seeks to provide incidental recreational or rather tourist experiences of the environments in their most natural state. This enhances man to experience the beauty as well as the wonder of nature and the environment in the wild state.

Any damage caused to the natural environments that act as tourist attraction centers lowers not only tourism activity but also the revenue that the sector generates. For instance, the BP oil spill in the Gulf of Mexico paralyzed tourism activity for nearly a year besides leading to the death of 11 workers (Weeks 677).


Tourism plays a pivotal role in the economic development of a nation. It brings foreign currency and creates job opportunities for the citizens. However, the government has to take a lead role in ensuring that the tourism sector runs smoothly besides protecting the tourist attraction centers/features.

Additionally, it should support the global marketing of the tourism sector to attract more tourists. As aforementioned, internet services are essential in marketing as well as establishing business relationships for the growth of the industry hence increased returns as far as economic development is concerned.

Works Cited

Garau, Vadell et al. “Internet Innovation for External Relations in the Balearic Hotel Industry.” The Journal of Business and Industrial Marketing 23.1(2008): 70-80. Print.

Kesar, Oliver, and Ferjanic Danijela. “Critical Aspects of the Managing Successful Wine Tourism Development in the Times of Global Economic Crisis-A Case of Croatia.” Journal of Economics 2.1(2010): 1629-1644. Print.

OECD. “World: Organization for Economic Cooperation and Development Issues Report on Problems Facing Global Tourism.” Asia News Monitor [Bangkok] 23 July 2012: All. Print.

Provost, Claire, and Cummins Jaz. Talk Point: Tourism and Development. 22 April 2011. Web. <>.

Travis, Anthony. Planning For Tourism, Leisure and Sustainability: International Case Studies. Wallingford, GBR: Cabi publishing, 2011. Print.

Weeks, Jennifer. “Gulf Coast Restoration: Can The Damaged Region Rebound?” CQ Researcher, 21 (2011): 677-700. 17 October 2012. <>.

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"Tourism as a Very Important Sector in the World Economy." IvyPanda, 20 Aug. 2019, ivypanda.com/essays/tourism-and-economic-development-2/.

1. IvyPanda. "Tourism as a Very Important Sector in the World Economy." August 20, 2019. https://ivypanda.com/essays/tourism-and-economic-development-2/.


IvyPanda. "Tourism as a Very Important Sector in the World Economy." August 20, 2019. https://ivypanda.com/essays/tourism-and-economic-development-2/.


IvyPanda. 2019. "Tourism as a Very Important Sector in the World Economy." August 20, 2019. https://ivypanda.com/essays/tourism-and-economic-development-2/.


IvyPanda. (2019) 'Tourism as a Very Important Sector in the World Economy'. 20 August.

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