COMCEC Tourism Outlook-2019
3
Figure 2.1 Why Tourism Matters?
Source: UNWTO, Tourism Highlights 2016 Edition.
According to the UNWTO, total exports earnings (including passenger transport) generated by
international tourism in 2018 reached US$ 1.7 trillion or US$ 5 billion a day on average.
International tourism represents 7% of the world’s exports in goods and services, up from 6%
in 2015, as tourism has grown faster than world trade over the past four years. Tourism exports
account for as much as 29% of the world’s exports of commercial services. Globally, tourism
ranks third after fuels and chemicals and ahead of food and automotive products as an export
category. However, in many emerging economies, tourism is the largest export category. While
tourism represents 30% of services exports globally, the industry has 40% share in emerging
economies’ services exports (UNWTO, 2017a). Tourism is also important for export
diversification; particularly for commodity and oil exporting countries tourism has the potential
to offset weaker export revenues.
In over 150 countries, tourism is one of the top five foreign exchange earners and in 60 countries
it is the number one source of foreign currency income. In 23 of the 49 Least Developed
Countries, international tourism is among the top three foreign exchange earners, and for 7
LDCs, it is their single largest revenue earner (UNWTO, 2012b).
It is acknowledged that tourism contributes in alleviating poverty and empowering women,
youth and migrant workers and provides new employment opportunities. There are three main
pathways through which tourism affects poverty reduction. Firstly, the wages and earnings of
workers or entrepreneurs who participate in the sector can be regarded as direct effects of
tourism. Tourism is more labor intensive than other sectors, and uses a relatively high
proportion of unskilled or semi-skilled labor. For advanced, diversified economies, the
contribution of tourism to GDP ranges from approximately 2% for countries where tourism is a
comparatively small sector, to over 10% for countries where tourism is an important sector of
the economy. For small islands and developing countries, the weight of tourism can be even
larger, accounting for up to 25% in some destinations like in some Member Countries as
Maldives. Secondly, indirect effects occur through the tourism value chain which includes inputs
like food and beverage, construction, transportation, furniture andmany other sectors. Evidence
suggests that in developing countries, the inter-sectoral impact adds an extra 60-70 % on top of
the direct effects of tourism. Finally, dynamic effects of tourismoccur on the livelihood strategies
of local households, the business climate for small enterprise growth or infrastructure
development in countries. Moreover, tourism tends to employ more women and young people
than other industries and enhance their economic welfare (Ashley, et al., 2007).
10% GDP
(Direct, Indirect
and Induced)
1/10
JOBS
US $ 1.4
TRILLION IN
EXPORTS
7%
WORLD
TRADE
30% OF
SERVICES
EXPORTS