1. Discuss some of the impacts of tourism on the local and global economy?


  1. Explain how tourism is an invincible export clarifying direct expenditure, indirect expenditure and included expenditure?

Tourism is an invisible export since it is more of a service industry. Currency tends to flow inwards from other countries, but there is no exchange of goods.

Direct Expenditure- This form of expenditure is incurred when people book flights and hotels. These are essential for the people travelling as tourists. There are also expenditures on rental cars, gas stations and restaurants among others in the destination countries.

Indirect Expenditure- Indirect expenditure occurs as a result of the direct expenditures. When people book hotels, this creates demand for hotel laundries and other supplies. There is also demand for things like raw food materials and consumer goods.

Induced Expenditure- This is the type of expenditure that results from the increased demand of tourism. When the demand in the tourism sector increases, there will be need to expand airports, construct new hotels and attractions among others.

  1. Which local taxes are impacted by tourism and what are some of the uses to which they can be put, other than regular fund expenditures?

Local taxes impacted by tourism are Sales Tax and Transient Occupancy Tax. Sales Tax is normally imposed on the sale of goods and services. It is levied at the point of sale. Transient Occupancy Tax on the other hand, is levied by the cities on the room rate paid by the tourists.

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