WEEK 3

• Continuous demand for international travel in developed countries.
• Developing countries need foreign exchange to aid their economic growth.
• Income in developed countries increases.
• ECONOMIC IMPACT - Travelers spend on goods and services within the destination thus hospitality and tourism act as an export industry by bringing revenue.
• Indirect - means that the money paid by tourist to businesses are used to pay for supplies, wages or others.
• ECONOMIC IMPACT - It provides source of income, employment and foreign exchange.
• TOURISM MULTIPLIER - It is used to describe the total effect both direct and secondary of an external source of income introduced into economy.
• COST BENEFIT RATIO = BENEFIT/COST
• HIGHER PRICES – due to increase in demand and imports
• ECONOMIC INSTABILITY - since pleasure travel is discretionary item it subject to changes in prices and item.
• Balance Growth Theory - It states that tourism and hospitality and tourism needs the support of other industry. Focuses in supply development.
• Unbalance Growth Theory - Focuses in the development of demand hence the industry will move to provide products and services locally.
• Import Substitution - It imposes quotas or tariffs on the importation of goods which can developed locally. It also grants or loans to encourage local industries to use local materials.
• Incentives - It encourages the influx of capital both local and foreign.
• Foreign Exchange - Some countries placed restrictions on spending in order to maximize foreign exchange earnings.