COMCEC Tourism Outlook 2017
3
Figure 2.1 Why Tourism Matters?
Source: UNWTO, Tourism Highlights 2016 Edition.
According to the UNWTO, total exports earnings generated by international tourism in 2016
reached US$ 1.4 trillion or US$ 4 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 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 known that tourism contributes in reducing 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 and many 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 tourism occur 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
10% GDP
(Direct, Indirect
and Induced)
1/10
JOBS
US $ 1.4
TRILLION IN
EXPORTS
7%
WORLD
TRADE
30% OF
SERVICES
EXPORTS