Travel and tourism industry is one of the largest and fastest-growing industries in the world. It plays a vital role in the economy of various countries by providing employment opportunities, foreign exchange earnings, and contributing to the Gross Domestic Product (GDP). In this article, we will be discussing the percentage of GDP that is contributed by travel and tourism industry.
What is Travel and Tourism Industry?
Travel and tourism industry comprises various activities that involve people traveling to different locations for leisure, business, or other purposes. This industry includes transportation services such as airlines, railways, buses, taxis, etc., accommodation services such as hotels, resorts, guest houses, etc., food and beverage services such as restaurants, cafes, bars, etc., and recreational activities such as theme parks, museums, sports events, etc.
How is GDP Calculated?
Before we dive into the percentage of GDP contributed by travel and tourism industry let’s first understand how GDP is calculated. Gross Domestic Product (GDP) is a measure of the total value of goods and services produced within a country’s borders over a specific period. GDP can be calculated using three methods:
- Production Method: This method calculates GDP by adding up the value of all goods and services produced within a country’s borders.
- Expenditure Method: This method calculates GDP by adding up all spending on consumption (C), investment (I), government expenditure (G), and net exports (X-M).
- Income Method: This method calculates GDP by adding up all income earned by households and firms within a country.
The Contribution of Travel and Tourism Industry to Global GDP
According to the World Travel & Tourism Council (WTTC), travel and tourism industry contributes 10.4% to the global GDP and generates 319 million jobs worldwide. In 2019, travel and tourism industry contributed $8.9 trillion to the global GDP, which is more than the contribution of agriculture, automotive manufacturing, or mining industry.
The Contribution of Travel and Tourism Industry to National GDP
The contribution of travel and tourism industry to national GDP varies from country to country. Some countries heavily rely on tourism as a major source of foreign exchange earnings and employment opportunities. For instance, in Maldives, travel and tourism industry contributes over 50% to the national GDP while in Thailand it contributes around 21%.
Conclusion
In conclusion, travel and tourism industry plays a significant role in the global economy by providing employment opportunities, foreign exchange earnings, and contributing to the Gross Domestic Product (GDP). The percentage of GDP contributed by this industry varies from country to country but overall it remains a crucial industry that drives economic growth.
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