The Economic Value of Tourism: Unveiling Its Impact on GDP

Yes, tourism is included in the calculation of a country’s GDP as it represents the monetary value of goods and services produced by the tourism industry within a specific period of time.

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Tourism plays a significant role in the calculation of a country’s Gross Domestic Product (GDP) as it encompasses the economic activities associated with the tourism industry. The GDP is an essential indicator of a nation’s overall economic performance, and including tourism in its calculation provides a more comprehensive view of a country’s economic vitality.

One of the key components of GDP is consumer spending, which includes expenditures made by both domestic and international tourists during their trips. This includes spending on accommodation, transportation, food and beverages, entertainment, shopping, and other tourism-related services. As such, the revenue generated through tourism is considered as a valuable contribution to a country’s GDP.

To illustrate this further, here is a table showcasing the contribution of tourism to the GDP of selected countries:

Country Tourism’s Contribution to GDP (%)

Spain 14.3%
France 7.7%
United States 8.8%
Thailand 21.0%
Australia 3.3%
Turkey 10.3%

According to the World Travel and Tourism Council (WTTC), global tourism accounted for 10.4% of the world’s GDP in 2019, highlighting the significant impact of tourism on the global economy. A famous quote by the former Secretary-General of the United Nations World Tourism Organization (UNWTO), Taleb Rifai, emphasizes the crucial role of tourism:

“Tourism is a key contributor to economic growth, job creation, and sustainable development. It has the power to drive social progress and bridge cultural divides.”

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Interesting facts about tourism’s contribution to GDP include:

  1. Tourism is one of the largest and fastest-growing industries globally, supporting various sectors such as transportation, accommodation, dining, and entertainment.

  2. In many countries, such as Maldives, Bahamas, and Seychelles, tourism contributes significantly to their national GDP, sometimes surpassing other traditional sectors like agriculture or manufacturing.

  3. The tourism industry has a multiplier effect, meaning that every dollar spent on tourism generates additional economic activity in other related industries, leading to job creation and investment opportunities.

  4. The COVID-19 pandemic has had a tremendous impact on the tourism industry, causing a significant decline in international tourist arrivals and subsequently affecting the GDP of many countries heavily dependent on tourism.

In conclusion, tourism indeed forms an integral part of a country’s GDP calculation. Its inclusion reflects the economic value generated by the tourism sector and its contribution to overall economic growth, job creation, and sustainable development. As Taleb Rifai aptly stated, tourism has the potential to act as a vehicle for economic progress and cultural understanding.

Video answer to “Is tourism a part of GDP?”

The travel and tourism sector in the Philippines has contributed nearly $70 billion to the country’s GDP in 2022, although this is 21% below pre-pandemic levels. However, there is optimism for further rebound and growth, with a projected contribution of $80 billion this year and the potential for the sector to represent 20% of the economy in the next decade, amounting to $147 billion. The sector also plays a crucial role in job creation, employing 7.8 million people in 2021 and expected to increase to 8.6 million this year, with the potential to generate over 10 million jobs in the next 10 years. International tourism spending is also expected to rise, with tourists projected to spend over $6 billion in the Philippines in 2022. Julia Simpson, President and CEO of WTTC, highlights the need for sustainability in the industry, including reducing greenhouse gas emissions and exploring the use of sustainable aviation fuel. Travelers are also encouraged to minimize their carbon footprint through actions such as avoiding single-use plastics and participating in offsetting schemes. Despite global inflationary pressures, there is strong pent-up demand for travel, indicating a positive outlook for the future of the travel and tourism sector.

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Other answers to your question

Tourism direct GDP corresponds to the part of GDP generated by all industries directly in contact with visitors. This indicator is measured as a percentage of total GDP or a percentage of GVA.

In 2021, the share of travel and tourism’s total contribution to GDP in European Union member countries (EU 27) and the United Kingdom increased over the previous year, following a sharp drop in 2020 due to the coronavirus (COVID-19) pandemic.

Tourism direct GDP corresponds to the part of GDP generated by all industries directly in contact with visitors. This indicator is measured as a percentage of total GDP or a percentage of GVA.

Travel and tourism accounted for 6.1 percent of the global gross domestic product (GDP) in 2021, denoting an increase over 2020 but not catching up with the figures reported prior to the coronavirus (COVID-19) pandemic. Overall, the total contribution of travel and tourism to the global GDP amounted to roughly 5.8 trillion U.S. dollars in 2021.

The direct contribution of travel and tourism to GDP reflects the ‘internal’ spending on travel and tourism (total spending within a particular country on travel and tourism by residents and non-residents for business and leisure purposes) as well as government ‘individual’ spending – spending by government on travel and tourism services directly linked to visitors, such as cultural (e.g. museums) or recreational (e.g. national parks).

The major component of Gross Domestic Product (GDP) is consumption, which is driven by demand for goods and services. One effect of tourism on GDP is that tourism affects the economy through the provision of employment. The main effect of tourism on GDP is the fact that tourism boosts the demand for goods and services.

Purpose: GDP generated by visitor consumption is the most comprehensive aggregate illustrating the economic relevance of tourism.

The value of goods and services offered by the tourism sector in Spain increased by more than 60 percent in 2022, recovering entirely from the impact of the coronavirus (COVID-19) pandemic. In 2023, the tourism GDP in the Iberian country is expected to go up 3.1 percent.

Tourism direct GDP as a proportion of total GDP (indicator 8.9.1)

The travel and tourism sector accounts for 10.4% total contribution of Global Gross Domestic Product (GDP). 9.9% of total employment, or 313 million jobs as of 2017.

Travel and tourism contributed around 5.8 billion U.S. dollars to global GDP in 2021.

In the financial year 2018–19, Australia generated $60.8 billion in direct tourism gross domestic product (GDP).

As of 2019, contribution of travel and tourism to GDP (% of GDP) in Macau was 72 %. The top 5 countries also includes Maldives, Seychelles, Saint Kitts and Nevis, and Grenada.

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