Chapter 4: The Economic Impacts of Tourism

Question 1: This chapter critiques the quality of tourism employment. Summarise the factors to consider when evaluating whether employment in tourism is good for an economy.

Answer Guide: Employment in tourism is often considered to be low paid and seasonal. While this may be true in some cases, many parts of the industry operate year-round. Furthermore, seasonal jobs may appeal to some employees, such as students looking for work outside of term-time. The issue of low pay expands depending on the job role – for instance, a senior manager working for an airline is likely to have a substantial salary. Some advantages of tourism employment include: variety of positions available, in some cases, the opportunity to travel (though this is by no means a given in the industry), ease of access to entry-level positions. There are also some gender issues related to tourism –  in some countries women can work in the tourism industry where they may not otherwise have access to employment. However, senior positions are more likely to be held by men.

Question 2: What is meant by the terms ‘leakages’ and ‘multiplier effect’? How does the former influence the latter?

Answer Guide: The term ‘leakages’ refers to the money lost from the economy due to imports, savings or repatriation (of profits or salaries). The term ‘multiplier effect’ refers to the increase in value to the economy as money circulates through the economy, with income from tourism being used to pay wages, which is then spent on items such as food, clothes, entertainment, etc., this being the income which is used to pay other people’s wages. The size of the multiplier effect is reduced by leakages – as money leaks from the economy so there is a smaller amount which can be recirculated.

Question 3: Australian residents took 9,117,692 trips overseas and 97,202,739 domestic overnight trips in 2017. At that time, the population was 24 702, 900. Calculate the gross travel propensity for international and domestic overnight travel by Australians. How is this information useful for Australian travel agents?

Answer Guide: Gross Travel Propensity is the ratio of trips taken in relation to the total population.

Australia: International travel

9117692/24702900 (*100 for percentage) = 36.9%

Australia:Domestic Travel

97,202,739 / 24702900 (*100 for percentage) = 393.5%.

This is useful in understanding the extent to which the population travels. The high level of domestic travel suggests that an Australian travel agent should promote the fact that they can assist with domestic travel arrangements as well as international travel.