Essay Sample on Influence of Tourism on Economic Growth and Development

Introduction

Over the last few decades, the expansion of tourism has led to explicit economic growth and development in the visited countries and nations in the world. Numerous receipts that are collected from the destination areas reveals that a lot of fees are received that can be used to reclaim the economic face of the destination area. Consideration of domestic tourism reveals that the volume of tourism has expanded adversely by ten times from the original form. The commercial distribution varies depending on the methodologies used in the destination areas.

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Notably, many developing regions and countries view tourism as a chance for social and economic development. Tourism leads to vibrant economic growth and events in the emerging market sources which are strengthened by the different policies governing the visitations (Bilen et al., 2017, 28). Indeed, the brighter prospects of tourism are the primary sources of potential contribution in terms of environmental and socio-economic progress which make every region remain a global attraction site. Generally, tourism economists' affirm that the presence of visitors in a given country provides a positive development and growth of the economy. The paper focuses to critically discuss why tourism is considered to be an effective means of achieving economic growth and development in destination areas.

The Impact of Tourism on Economic Growth and Development

Convergence Theory

Economic growth in both the less developed and developed areas together. Convergence theory reveals that tourism consumptions which are directed towards peripheral regions or less developed countries are rich and pertinent in attracting tourist either socially, naturally or culturally leads to equal redistribution of the national income to benefit the host destination.

Similarly, financial resources increment n the demand side leads to an increase in supply processes in the host region, thereby provoking all the newly directed tourism-related operations. As a result, production of indirect suppliers increases to first round new jobs creation, tourism businesses, and extra income generation as well as the addition of fresh consumption among the employees among others (Bilen et al., 2017, 28). Therefore, in theory it can be noted that the national income of the incoming destination region will increase as other factors remain equal in the reduction of the final consumption for the conception and rise of convergence in the economic growth. These include relative differences in the rates of economic growth of the tourism consumption between outgoing and incoming visitors leading to narrowing of the developed and less developed areas.

Moreover, convergence theory development in tourism embraces two important themes. First, tourism is regarded as an agent of regional development and economic growth within a given destination country, leading to regional imbalances alleviations especially between the considered country in the world's context which is divided two distinct difference, d developed and less developed countries (Du et al., 2016, 457). However, the assumption here reveals that the gap between the two can only be reduced through the creation of projects which are related to tourism development. Some authors define the convergence theory as "the dispersion of development to non-industrial regions". But in this consideration, tourism aims at distributing development and growth projects away from the industrial sectors towards those areas in a country that have not experienced proper developments.

Furthermore, the convergence theory portrays that both regional and country themes stress the contribution of tourism to development. This is supported by some reasons which help in distinguishing between developed and less developed regions since they have different implications for the actual contribution of tourism to economic growth(Cardenas-Garcia et al., 2015, 223). For example, the attitude of tourism at the national level varies considerably in developed and less developed countries. However in the former, in developed countries tourism more economically essential to support high expectations which are governed by outlined policies which are specific for creating cohesion between sectors in the host destinations.

Dependency Theory and Economic Growth

This theory claims that tourism takes destination areas to other levels of economic growth and development. It views tourism as a form of imperialism or colonialism which is associated with reliance on external donations drive the local extensions from the supports which are received from the donor (Du et al., 2016, 457). Similarly, the development in tourism reflects a substantial improvement in infrastructural sectors such as roads, schools, airport, beaches and health sector. In this theory, the presence of visitors is vital in improving the face of the host destination. For, examples, the visitors will need proper medication upon infected by local disease or attacked by a wild animal whose remedy must be very urgent. As a result, adequate health facilities and institutions must be constructed to help reduce the menace from either the locals or the visitors (Fayissa et al., 2008, 808).

On the other hand, tourism depends on roads or air transport to reach their designated places of visit; however, this can only be possible if the infrastructures are appropriate for such movement. Due to this tourism requirement, proper roads and airports are being expanded to allow them to move freely and with ease. Consequently, this opens several avenues for transportation of other goods and services which are great importance for growth and development of a region. It can, therefore, be concluded that dependency theory makes such requirements splendid especially in the host regions.

According to dependency theory, centre with wealthier tourists become more productive from tourism activities in host destinations because the tourist expenditure leakages that are experienced in those areas (Fahimi et al., 2018, 67). Overall, tourist-stimulated consumption in residential places, before and after their travel has the same influence due to the accumulation of fee which can be used in other sectors.

Tourism and the Poverty Reduction

Every country is affected by different particular and economic challenges that render them weak and unable to meet their annual budget. This spread to the entire larger and small town within that country. However, the presences of attraction sites welcome many visitors who not only come to explore but also to make a proper exchange on visiting the sites. This results in a frank exchange earning process. Although tourism may not eradicate the poverty of a given area, it makes significant contributions that help in reducing its intensity.

However, the impact of tourism in reducing poverty depends on several factors to enable economic growth such as the type and nature of tourism and the number of people annually in the destination area (Gupta and Dutta, 2018, 134). The former generates more employment opportunities for semi-skilled workers as well as direct sales of goods and services to foreigners by small enterprises or the poor. As a result, cases of overdependence on foreign aids are reduced as the country tries to make a favourable condition for further opportunities. Similarly, employment generation is vital in ensuring economic growth as the employed can easily access their basic need thus reducing poverty levels of the destination area. Tourism is skilled labour to various categories of employees, particularly for female, younger workers and the poor. The creation of numerous positions in a country leads to explicit exchange process and workforce thereby ensuring a steady economic growth.

Tourism and the Balance of Payments in Economic Growth

In economic growth and development purpose, international tourism receipts are categorically classified to represent the tourism expenditure parts that are significant in bringing foreign currency on the critical goods. Due to the characteristic nature of tourism which is related to payment of balances and provision of services, the practices are seen as an exuberant way of expanding the scope of the host country. As a result, the visited region enjoys mild advantages as compared to others. For example, it allows for the valorisation of goods which failed to be the subject of exchange in the international trade (Fahimi et al., 2018, 67). These goods usually attract the demands and attention of the tourist, who eventually buy them at higher prices as opposed to the market price. Consequently, this leads to a reduction of bulky goods in the host country as well as allow them to produce more which also sells very fast. This eventually reduces the environmental population as well as the accumulation of wealth that can be used in building other economic sectors with the region.

Additionally, the receipts that are collected from foreign visitors on international tourism which arises from either travels or expenditure forms part of the account balance from the services rendered. Although the service account balance is meaningless to the tourists, it has meaningful economic impacts on the economy of the visited country. These collected receipts can be used in making payments for significant developments in a given country.

Valuation of Environmental Goods in Tourism

The rate of growth and development of an economy of the host destination increases through the proper cost of environmental goods. These are public or free goods that have free or potential value over their current use before the development of tourism. When these goods are sold in the tourist market, they sell expensively under fixed supply demands which control their availability (Gupta and Dutta, 2018, 134). The premium received from the goods is then converted to useful projects as well as helps in shaping the environment for possible economic activities.

Conclusion

In conclusion, tourism plays a vital role in the economic growth and development of the destination areas. Different theories explain the relationship between the visitors and the host as an important avenue where mild transactions lead to an exuberant expansion of the economic framework of a given region. For instance, tourism reduces poverty among the visited countries. Both the poor and the vulnerable members of the area find opportunities to sell different products to the visitors which in turn help them leave their poverty-stricken conditions. Similarly, in the convergence theory, various factors are brought together during the visit thereby improving the cohesiveness of the nation's economy. For example, convergence theory affirms that the consumptions in the tourism sectors are directed towards developing peripheral regions and less developed countries to attract tourist either socially, naturally or culturally. This eventually leads to equal redistribution of the national income to benefit the host destination.

References

Bilen, M., Yilanci, V. and Eryuzlu, H., 2017. Tourism development and economic growth: a panel Granger causality analysis in the frequency domain. Current Issues in Tourism, 20(1), pp.27-32.

Cardenas-Garcia, P.J., Sanchez-Rivero, M. and Pulido-Fernandez, J.I., 2015. Does tourism growth influence economic development?. Journal of Travel Research, 54(2), pp.206-221.

Du, D., Lew, A.A. and Ng, P.T., 2016. Tourism and economic growth. Journal of Travel Research, 55(4), pp.454-464.

Fahimi, A., Saint Akadiri, S., Seraj, M. and Akadiri, A.C., 2018. Testing the role of tourism and human capital development in economic growth. A panel causality study of micro states...