MULTIPLICATIVE ECONOMIC EFFECT FROM THE DEVELOPMENT OF TOURISM

Евменова Е.В.

Северный (Арктический) федеральный университет имени М.В. Ломоносова

МУЛЬТИПЛИКАТИВНЫЙ ЭКОНОМИЧЕСКИЙ ЭФФЕКТ ОТ РАЗВИТИЯ ТУРИЗМА

Аннотация

В статье представлен анализ места и значения туризма в современном мире; дана краткая характеристика сфер воздействия туризма на экономику страны и общество в целом; описан мультипликативный эффект от прямого и косвенного влияния туризма на местную экономику.

Ключевые слова: туризм, воздействие на экономику, туристские доходы и расходы.

Evmenova E.V.

Northern (Arctic) federal university of name M.V. Lomonosov

MULTIPLICATIVE ECONOMIC EFFECT FROM THE DEVELOPMENT OF TOURISM

Abstract

The article presents analysis of place and importance of tourism in modern world; short characteristics of spheres of tourism influence on the economy of a country and society on the whole is given; multiplicative effect from direct and indirect of tourism influence on the local economy is described.

Keywords: tourism, impact on economy, tourist income and expenses.

Tourism is an important source of revenue to the treasury of any state. In many countries, the share of tourism accounts from one fifth to a half of the gross national product. About 60 % of the total workforce is employed in the tourism sector. Tourism develops tourism related areas of the world economy: consumer goods production, trade, building, transportation, insurance and others. Number of branches involved in the tourism industry are increased every year.

Tourism helps to employ many people, as the tourism industry has a very extensive system. Labor in this industry is generally not mechanized, and can not be mechanized, allowing to attract human resources, directing them to the tourists’ service.

Tourism has major influence to the economy of the region it develops. It affects all the aspects of society: economic, social and humanitarian .

Tourism is considered in two ways as an economic phenomenon:

1. as an economic complex, which development is generally due to the global economic relations , processes and relationships;

2. as the most important catalyst for economic growth. The tourism acts as a channel for redistribution of gross national product.

The tourism in today's world:

- Has industrial form;

- Acts as a service that can not be stored and transported;

- Is characterized by a high level of efficiency and a quick return of investment;

- A pioneer of economic development in new areas;

- Acts as an effective means of protection of nature and cultural heritage;

- Is compatible with almost all sectors of the economy and human activities.

The income from foreign tourism in developed countries is known to be exceeded twice the income from international trade in ferrous and non-ferrous metals.

Revenues from tourism are formed in result of tourist charges, which are defined as the total amount of consumer charges produced by the visitor during his trip and stay at the destination.

Tourist charges include payment for:

- Integrated travel;

- Vacation packages and tours;

- Accommodation;

- Food and beverages;

- Transport;

- Recreational, cultural and sports activities;

- Consumer goods, being integral part of travel;

- Medical services, etc.

Listed tourist expenditures have direct impact on the economy, which means the economic activity of tourism contributes to the development of national income.

The spheres of tourism influence on the economy and society in general are:

The business sphere. Organizing of tourist enterprise is beneficial because it provides customers with its products and services, and office workers with wages and other payments, to shareholders (or owners) with the profit to the state (or to the region) with taxes and fees;

Consumer sphere. Tourism creates new form of consumer demand. The demand of tourists for various goods and services contributes to the development of local industry. Due to that, the development of consumer goods is grown, and living standards are improved.

Local businesses are developed due to tourism. They include :

- Cultural and entertainment businesses (museums, exhibitions, memorials and monuments, show business, movie business), which, in turn, benefit to the region and the local population through taxation. Moreover, the current market of tourist services can be the source of financing for protection of historical heritage and contribute to the preservation and timely restoration of historical monument, architectural structures;

- Transport enterprises and companies (public transport, car rental, use of buses for tours, local airlines are considerably focused on income from tourism);

- Companies that manufacture souvenirs, camping equipment and special folk craft (the products of these companies are considerably aimed to tourists).

Currency sphere. Tourism contributes to the flow of significant amounts of foreign currency. For example, the tourists from England, received their income at home, travel around Russia and spend here part of their income, thus contributing to the economy of Russia. In other words, the charges of foreign tourists in the country are tourist import for Russia. Tourism as service trade on the world market is called “invisible import” that make appropriate contribution to the payment balance of the country. A positive development is the fact that the sum of import of currency into the country by tourists exceeds the sum of its exports.

Moreover, the import of foreign currency is not only in the form of payment for the tour package (tour), but also in the form of money exchange in exchange offices of the tourist center on everyday spending of tourists, payments for additional services, etc.

The industrial infrastructure. Tourism generates the structure of recreation that can be used not only for tourists but also for local people.

The emergence of new tourist destinations is accompanied by the emergence of service, retail and entertainment businesses, construction of roads, beaches, which has positive effect on the surrounding infrastructure, as well as the consumer market and other areas of business. Developed tourist infrastructure in particular region is an indicator of the standard of living of the local population.

The money spent by tourists in the place of temporary residence, create simultaneously revenue for the country (or region) of residence. This income leads to a chain reaction: expenditures - income - expenditures - income, etc. Every ruble earned by the first turn funds and produced in the form of income, leaves the company's account again. Thus, as a result of primary income received as a result of tourist expenditures, new revenues arise, but of the third parties, if such persons act as suppliers of any goods for the tourist business. The result is a revenue incrementally [1].

The direct impact of tourism on the economy of country or region is the result of the use of part of tourists’ income for buying goods and services. Tourists’ money income contributes direct influence to the functioning of the tourist enterprises, forming the basis of material support of employees of travel agencies and allowing opening new jobs.

In addition to the direct impact of tourism revenue for the development of the region, there is also its indirect effect, or "multiplier effect", which works in process of expansion of tourism in the region. The action of this multiplier can be explained by the following example: A group of foreign tourists while traveling around the Arkhangelsk region spends certain amount for buying goods and services. Travel companies income is the revenue from sales of services and goods to tourists. Regional income is taxes derived from the revenue and left at the disposal of the region. Tourists’ money begin working on the economy of the region, when the travel company buys goods and services produced in the region. The region having received money from the tourists pays wages to the employees, who spend it on payment of goods and services.

The combination of direct and indirect effects of tourist expenditure determines their impact on the local economy. Not all income from tourist expenditure is usually used: some part of it is delayed; the other one is spent outside the region. The more income from tourism is implemented within the region, the more effect of the multiplier. The ability to retain such proceeds within the region depends on the state of the local economy. If it is able to produce goods and services being in great demand by the tourists, the multiplier effect will require the creation of additional 1.6 million jobs in our country. Having positive impact on the economy as a whole, the developed market of tourist services can improve significantly the economy of big cities and remote regions of Russia, thus becoming a tangible item making gross national product [1].

WTO experts point out that there is a clear connection between the trends of development of tourism and general condition of the economy in the country. Dynamics of traveling is very sensitive to the fact whether the economy is going up or down [2].

It is also necessary not to forget about the political situation in the country. For example, Egypt has lost significant part of tourist traffic because of internal political conflict. About 2.5 million Russians visited Egypt last year, and authorities of the country hoped that more than 3 million tourists would come 2013. Unfortunately, after beginning of confrontation between the former President Mohammed Mursi’s supporters and opponents, tourist arrivals for the first half of August have decreased by 45% and over the past two weeks by 70%. There are almost no Russians at Egypt resorts at present moment [3].

Thus tourism as a form of social and cultural activities and as an industry, producing services necessary for meeting demands arising while traveling, is the most important sphere of the economy; its further development and improvement will help increase of the state revenue [2].

According to forecasts of the World Tourism Organization, the number of tourist arrivals will be 1.6 billion people by 2020, the world's tourism revenue will grow to 2 trillion doll. in 2020 [4].