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Economic and Social Significance of Tourism

&  Economic and Social Significance of Tourism

Tourism has become one of the largest industries in the world. And it has impact on our economy development, culture, social life etc.

Infrastructure and Regional Development

Tourism changes the face of the location with the development of new airports, bus terminals, railway stations, water and drainage system etc. These facilities are enjoyed not only by the tourists but also by the people in the location. Furthermore the provision of infrastructure may provide base for serving infrastructure for industries. This indirectly tourism expenditure may be responsible for stimulating other economic activities.
Tourism to a great extend helps regional development while taking the example of Khajuraho (Madhya Pradesh), we can see that tourism has contributed much to the development of that region. Thirty years before Khajuraho was an unknown remote village. But after giving publicity in international level the place has become one of the main tourist attractions in India. Today in Khajuraho a number of chain hotels are having their units there. There are regular air service between Delhi and Khajuraho and it is developed into a big town.


It is the major direct economic effect of tourism. Tourism industry is a valuable source of employment. It employs large number of people directly or indirectly which extends from unskilled to the highly specified ones.
When a tourist spot is developed there should be adequate accommodation services. For running such firms we need experts in management skilled workers such as cooks, housekeepers etc. besides it is also responsible for employee, persons who are outside the industry but who supply goods and services. The unskilled workers are also getting employment during the construction of these infrastructure facilities. This on hotel room supports other industries in the country, thereby reducing unemployment considerably. The employees working in the tourism industry may contact many foreigners and there is a chance of getting jobs abroad for settlement of their future.
Social and Cultural Significance
With the growth of tourism many rural areas and villages have a new life with their properties being improved and renewed. Tourism may have important cultural significance for it brings to contact people from different places and nations resulting in cultural exchange. In many places historical monuments are preserved through the money get from tourists. Many cultural forms got a new life through tourism, Kathakali the world famous art form was facing extinction. The tourism industry saved the art form. The artist also get economic benefits which contribute to a great extend to the preservation of the art form.

International Understanding
Tourism can be a vehicle for international understanding by bringing diverse people face to face. It has been cited as a major contribution to international goodwill and as a prime means of developing friendship among different nations. Tourism helps to breakdown barrios suspicion bad exists between nations. People belonging to different countries and practices different ways of life and speaking different languages can be brought together which makes a positive effect on international understanding.

Economical Effects
There are three separate elements in tourist expenditure of any country.
1.Domestic Expenditure That is the money spend by a nation making a holiday within his country
2. Expenditures by the nationalists making overseas holiday
3. Expenditure by a foreign traveller

These tourist expenditure has direct and indirect effect

Direct Effect
It regains to the actual expenditure in tourism such as transportation, accommodation etc. the income received from the people by providing such things and services to the tourist form the direct impact of the country

Indirect Impact

The indirect impact of tourism expenditure is the link between the traders directly involved in tourism and those traders which supply the tourist item

Multiple Effects

The money spend by the tourist circulates through the spending and it is re spend for a number of times. These is a chain reaction of spending the benefit from the infrastructure for tourism such as airports, roads, water supply may be widely shared by other sections of economy. Tourist facilities such as hotels, restaurants, are also need by domestic tourist. Tourist also contributes to tax revenue directly through sales tax which in turn provides employment infrastructural improvements which again support other industries giving employment for many. Tourism is a source of income is not easy to measure because of the multiplier effect. The tourist expenditure multiplies as in passes through various sections of economy. The Process I repeated several times in a given lap of time. The multiplier effect makes it possible to circulate the expenditure to various primary, secondary and tertiary stage.
The money paid by a tourist in paying his hotel bill will be used by the hotel management to provide for the cost which had incurred in meeting the demands of the visitor such as food, drinks, electricity and entertainments. The receipt in turn use the money they have received to meet their financial commitments and it is circulates from hand to hand.


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