Tourism is one of the biggest industries in the world, with millions of people traveling to different countries every year. Not only does it provide a source of income for businesses and individuals, but it also contributes significantly to a country’s GDP. In this article, we will explore the impact of tourism on a country’s economy and answer the question – ‘How much does tourism contribute to the GDP?’
What is GDP?
Before we dive into how tourism contributes to a country’s GDP, let’s first understand what GDP means. Gross Domestic Product (GDP) is the monetary value of all final goods and services produced within a country’s borders in a specific period. It is an important indicator of a country’s economic health and growth.
How does Tourism Contribute to GDP?
Tourism has become an integral part of many countries’ economies and has grown significantly over the years. When tourists visit a country, they spend money on various things like accommodation, transportation, food, shopping, and sightseeing. This spending generates revenue for businesses and creates employment opportunities for locals.
The direct contribution of tourism to GDP includes all spending by tourists on accommodation, food and beverages, recreation and entertainment, transportation services, and other tourist-related activities. The indirect contribution includes spending by businesses that supply goods or services to the tourism industry.
Direct Contribution
According to World Travel & Tourism Council (WTTC), direct contribution refers to “the economic activity generated by industries that deal directly with tourists”. In 2019, travel and tourism directly contributed $9.2 trillion to global GDP which was 10.4% of global GDP.
Indirect Contribution
Indirect contribution refers to “the economic activity generated by industries that indirectly supply goods and services to the travel and tourism industry”. In 2019, indirect contribution accounted for $13.7 trillion which was 15.3% of global GDP.
Total Contribution
The total contribution of tourism to GDP includes both direct and indirect contributions. In 2019, the travel and tourism industry’s total contribution to global GDP was $8.9 trillion which was 10.
Conclusion
Tourism has a significant impact on a country’s economy, and its contribution to a country’s GDP cannot be ignored. It generates revenue for businesses, creates employment opportunities for locals, and contributes to the growth of the economy. The direct and indirect contributions of tourism to GDP are substantial, making it an essential industry for many countries worldwide.