Presently, many people in the world have embraced the traveling culture to explore the magic of nature. Travel and tourism in broader terms refer to the movement of people to places outside their normal habitat within one year. Due to this development, there is the establishment of travel and tourism institutions or industries Worldwide. Travel and tourism industry does not only give people the chance to explore but also acts as an avenue of job creation.
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To determine the number of visitors and how their expenditure on these trips affects the economy, various research works were carried out to help analyze the income generated in the travel and tourism industry. When analyzing the contribution of Travel and Tourism in the economic development various aspects are put into consideration. These include:
- Direct contribution to GDP
- Direct contribution to employment- number of direct jobs created by the industry,
- Total contributions to GDP- GDP generated directly by the industry plus the indirect and induced impacts,
- Visitors’ exports- how tourists spend money in the country both in business and leisure,
- Domestic travel and tourism spending-residents spending in both business and leisure, Government individual spending-government spending on travel and tourism linked directly to visitors such as a cultural event, and
- Internal tourism consumption-revenue generated in a country from the industries that deal with tourists directly.
Research done by the World Travel and Tourism Council (WTTC) and Oxford Economics explained that there was an excellent growth in the GDP of Dubai travel industry for the third consecutive year in 2012. It also indicated that more than four million jobs were directly created in that year. Travel and Tourism contribute greatly to the world economy, and the same research showed there was a nine percent contribution of global GDP and over 260 jobs generated.
Travel and tourism industry has proven to be the industry that grows at an exceptional rate over others. It has been noted that there can be more contribution in economic development by this industry if there will be a decrease in punitive taxation and minimal visa restriction.
According to the 2013 annual research report by the United Arabs Emirates they claim that Travel and Tourism have directly contributed AED89.7nb to GDP which is equivalent to 6.6 percent of the total GDP in the year 2012. They also predicted a rise of 4 percent in the year 2013 and a 5.1 percent from 2013 onwards.11.3 of the total employment which is approximately 388,500 jobs were also generated in the year 2012 due to tourism.
There is an expected rise of 2.6 and 3.9 in the year 2013 and 2023. Furthermore, visitor’s exports contributed 9.7 percent of the total exports in 2012 and a rise of 4.9percent and 5 percent is expected in the year 2013 and 2023 exclusively. The total investment in 2012 was 23.2 percent, and it is expected to rise by 11.7 and 23.2 percent in the year 2013 and 2023.
Travel and tourism contribute greatly to economic development through avenues such as hotels, airlines, travel agents and other passenger transportation services. This also includes leisure and activities of the hotels or restaurants. These industries contribute directly to GDP by 6.6 percent, and this percentage is expected to rise by 4 percent in 2013 and 7.7 by 2023.
Indirect contributions are achieved due to three factors:
- Capital Investment: this involves spending by all sectors within the travel industry,
- Government Collective Spending: this includes government spending in support of tourism activities, and
- Supply-Chain Effects: this is the domestic goods purchases by various sectors of the travel and tourism industry as a contribution to their ultimate tourism production.
Surely, this is an industry we cannot ignore, and we should do our best to advance it.