Tourism has a significant impact on destinations, influencing their economy, culture, environment, and communities. Tourism positively affects many parties in society but can also be detrimental in certain situations.
In general, tourism positively affects the economy of its destination. The purchasing of commodities, and the usage of hotels and transport by tourists all contribute to economic activity within the country.
The sociocultural impacts of tourism are less straightforward, bringing both benefits and challenges to the destination. The interactions between tourists and locals foster a cultural exchange, particularly exposing tourists to a different culture through direct interactions and overall immersion. However, differing expectations in the societal and moral values of the tourists and those from the host location can cause friction between the two parties.
While tourism may have positive impacts environmentally, through an increase in awareness of certain environmental issues, tourism overall negatively impacts the environment. Tourist destinations and attractions located in the wild may neglect environmental concerns to satisfy the demands of tourists, creating issues such as pollution and deforestation.
Tourism also has positive and negative health outcomes for local people. The short-term negative impacts of tourism on residents' health are related to the density of tourist arrivals, the risk of disease transmission, road accidents, higher crime levels, as well as traffic congestion, crowding, and other stressful factors. In addition, residents can experience anxiety and depression related to their risk perceptions about mortality rates, food insecurity, contact with infected tourists, etc. At the same time, there are positive long-term impacts of tourism on residents' health and well-being outcomes through improving healthcare access, positive emotions, novelty, and social interactions.
Economic impacts
About 1.5 billion international tourists were recorded worldwide in 2024, with international tourism receipts reaching US$1.7 trillion. Europe accounted for US$725 billion, or 42% of global international tourism receipts.
Tourism can be divided into subcategories into which impacts fall: spending from visitors on tourism experiences, like beach holidays and theme parks (domestic and international), business spending, and capital investment.Turner, R. (2015). Travel and Tourism: Economic Impact 2015 World pp. 1–20 WTO
The economic impact of tourism is experienced through indirect and direct means. Direct economic effects are experienced when travelers buy items like accommodation, entertainment, food and drinks, and retail items within or close to a tourism destination, with residents', visitors', businesses', and governments' spending causing such effects.Goeldner, C. R., & Ritchie, J. B. (2007). Tourism Principles, Practices, Philosophies. John Wiley & Sons. The key component of direct economic impacts of tourism is that they occur within a country's borders and are implemented by "residents and non-residents for business and leisure purposes".
In contrast, indirect economic impacts of tourism can be found in investment spending surrounding a tourism offering from private and governmental interests. This investment may not explicitly be related to tourism, but benefits the tourist and local stakeholders all the same. The indirect effects of tourism are seen in the heightened demand for intermediate goods and services. Restaurants, for example, would buy more supplies to meet the boom in tourists in peak season. Further, local infrastructure improvements, like the widening of sidewalks in busy city centers, also illustrate the indirect effects of tourism. The ripple effects trigger economic activity outside the tourism industry itself, benefiting numerous industries and stakeholders. Indirect economic impacts (the supply chain, investment, and government collective) account for 50.7 percent of the total GDP contribution from travel and tourism in 2014.
Induced spending, which is the re-circulation of a tourist dollar within a community, is another way that tourism indirectly has an impact on a community.Rollins, R., Dearden, P. and Fennell, D. (2016). "Tourism, ecotourism and protected areas". In P. Dearden, R. Rollins and M. Needham (eds.), Parks and protected areas in Canada: Planning and management (4th ed) (pp. 391 – 425). Toronto: Oxford University Press For example, a foreign tourist injects money into the local economy when he spends a dollar on a souvenir made by a local at the tourism destination. That individual goes on to spend that dollar on lunch from a local vendor, and that vendor goes on to spend it locally.
Positive and negative economic impacts of tourism
Tourism can economically impact the local people positively or negatively.
Positive impacts on residents and destination, as well as tourists themselves More jobs available (positive for residents) Higher quality of life (positive for residents) Increased income and wealth (positive for residents) Rebuilding and restoring historic sites and encouraging the revitalization of cultures.Robert W. Wyllie. 2000. Tourism and Society; A guide to problems and issues. Venture Publishing. State College, Pennsylvania. Chapters 01-03 (positive for destination) Heritage tourism focuses on local history or historical events that occurred in the area, and tends to promote education.Pigram, J. J. (1993). "Planning for Tourism in Rural Areas: Bridging the Policy Implementation Gap". Tourism Research: Critiques and Challenges. Routledge, London, 156–174. (positive for destination as well as tourists) The local economy is stimulated and diversified, goods are manufactured more locally, and new markets open for local business owners to expand to. (positive for residents)
Negative impacts The benefits are not universal nor guaranteed. While more employment may be available, tourism-related jobs are often seasonal and low-paying. Prices can fluctuate throughout the year. They rise in the high tourist season to take advantage of more tourist dollars, but have the side effect of pricing goods above the economic reach of local residents, effectively starving them out their homes. (negative for residents) Damage to social and cultural area, as well as the natural environment. (negative for destination as well as residents) As the population increases, so do the impacts: resources become unsustainable and exhausted, the carrying capacity for tourists at a destination site may be depleted.J.G Nelson, R. Butler, G. Wall. (1999). "Tourism and Sustainable Development; A Civic Approach". Heritage Resource Centre Joint Publication, Number 2. University of Waterloo and Department of Geography Publication Series, Number 52. University of Waterloo (negative for tourists as well as residents) Often, when negative impacts occur, it is too late to impose restrictions and regulations. Tourist destinations seem to discover that many of the negative impacts are found in the development stage of the tourism area life cycle (TALC). (negative for destination and tourists) The economics of tourism have been shown to push out local tourism business owners in favour of strangers to the region. Foreign ownership creates leakage (revenues leaving the host community for another nation or multinational business) which strips away the opportunity for locals to make meaningful profits. Foreign companies are also known to hire non-resident seasonal workers because they can pay them less; this further contributes to economic leakage. Tourism can raise property values near the tourism area, effectively pushing out locals and encouraging businesses to migrate inwards to encourage and take advantage of more tourist spending, Moreover, over-tourism might endanger other businesses. (negative for residents)
Employment Employment, and both its availability and exclusivity, are subsets of economic impacts of tourism. Travel and tourism create 10.7 percent of the total available jobs worldwide, in both the direct and indirect tourism sectors. Direct tourism jobs, those that provide the visitor with their tourism experience include, but are not limited to: accommodation (building, cleaning, managing), food and drink services, entertainment, manufacturing, and shopping Indirect jobs related to tourism include the manufacturing of aircraft, boats, and other transportation. Employment may also be generated in construction, because additional superstructures and infrastructure is needed to accommodate tourists. Airports and ports generate seasonal employment opportunities for locals.
Tourism satellite account (TSA) The World Travel and Tourism Council (WTTC) Tourism Satellite Account (TSA) is a system of measurement recognized by the United Nations to define the extent of an economic sector that is not so easily defined as industries like forestry or oil and gas Tourism does not fit neatly into a statistical model; because it is not so much dependent on the physical movement of products and services, as it is on the position of the consumer.Buhalis, D., & Costa, C. (2006). Tourism Management Dynamics: Trends, Management, and Tools. Routledge. Therefore, TSAs were designed to standardize these many offerings for an international scale to facilitate better understanding of current tourism circumstances locally and abroad. The standardization includes concepts, classifications, and definitions, and is meant to enable researchers, industry professionals, and the average tourism business owner to view international comparisons.
Before TSAs were widely implemented, a gap existed in the available knowledge about tourism as an economic driver for GDP, employment, investment, and industry consumption; indicators were primarily approximations and therefore lacking in scientific and analytical viewpoints. This gap meant missed opportunities for development, as tourism stakeholders were unable to understand where they might be able to better establish themselves in the tourism economy. For example, a TSA can measure tax revenues related to tourism, which is a key contributor to the level of enthusiasm any level of government might have towards potential tourism investment. In 2006 Tyrrell and Johnston published The Economic Impacts of Tourism: A Special Issue and claimed that stakeholders in tourism benefit from the TSA because it has a good and bad impact on animals classification employment provides credible data on the impact of tourism and the associated employment is a framework for organizing statistical data on tourism is an international standard endorsed by the UN Statistical Commission is an instrument for designing economic policies related to tourism development provides data on tourism's impact on a nation's balance of payments provides information on tourism human resource characteristics
Through collection of more qualitative data and translating it into a more concise and effective form for tourism providers, TSAs are able to fill the previous knowledge gap. Information delivered and measured by a TSA includes tax revenues, economic impact on national balances, human resources, employment, and "tourism's contribution to gross domestic product".
Sociocultural impacts
Commodification of culture