COMCEC Tourism Outlook-2018
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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 30% 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).
A cross country study by the IMF showed that an increase of one standard deviation in tourism
activitywould lead to an additional annual growth of about 0.5 percentage point per year, ceteris
paribus (everything else being constant) (IMF, 2009). Thus, particularly low income economies
should view investing in its tourism industry as a means to stimulate growth over the long term
and enabling the poor to share in economic gains.