Tourism is deemed to be largest industry in around the globe. The benefits of tourism range from social benefits, environmental benefits to economic benefits. Tourism offers the greatest global employment prospects in the world. That is tourism creates both business and local job opportunities which includes the jobs related to the tourism industry like the tour services and hotels and those which are indirectly in support of the industry like food production.For example, in US, tourism industry represents 1 in every 11.7 jobs generated a clear indication of how tourism offers employment in the economy. Tourism leads to the development of hotels, tour companies, restaurants, souvenir shops and other related businesses all of which provide employment for a people in a given society or community .
The interdependence between different segments of tourism like the foods service, recreation, lodging and travel makes each segment to be dependent on each other for business and the development and the growth of one segment may directly or indirectly lead to the growth of the other segments. Growth of the segments will be accompanied by an increase in the number of employees. According to the World Tourism Organization, tourism employs 214 million people globally a clear indication that tourism provides employment for a good number of people (WTO, 2002).
Tourism also provides governments with substantial tax revenues. Each year, governments get extra revenues from tourism, and this is through sales taxes, airport taxes, employment income, restaurant taxes and park entrance fees. Therefore, with tourism, a country can stabilize and diversify its local economy. The income generated from the tax revenue from tourism can be used by the government at the national level to improve on infrastructure, education, promote more responsible tourism and fund the efforts of conservation. By doing this, the multiplier effect of tourism is enhanced.
Tourism Multiplier Effect
Tourism multiplier effect is the simplest form which indicates the number of times a tourist spends money and how that money circulates in the economy. In the tourism multiplier effect, tourism creates employment in the primary, secondary and tertiary sectors. Money spent by a tourist in a hotel helps in job creation directly into that hotel and indirectly elsewhere in that particular economy. For example, the hotel has to buy food from local famers and the farmers may spend some of money in buying fertilizers or clothes. This means that any money spend by a tourist is recycled into the economy which generates further use for the money. When tourists buy souvenirs, they increase the demand for local products which then increase employment in the secondary sector (WTO, 2002).
With the development of hotels, other companies will also be attracted in to the areas which will increase the total number of the jobs created. Workers will then spend more of their income in this area which will lead to the increase in tax revenue. Taxes will be spend in the improvement of infrastructure, image and tourism services which will make that particular areas be a popular destination for tourists hence increasing profitability and revenue for re-investment. The multiplier effect then continues to the point where the money will leak from the economy through imports. The multiplier effect of tourism has immense benefits to any country as it enhances economic growth (WTO, 2002).