Tourism Multiplier

Tourism is a widely used strategy for economic development. The extent to which the impacts of tourism-related expenditures are captured in an economy is a function of the industries contained in that economy and their linkages to other industries, households, and government. The extent of these linkages is captured by the numerical value of the multipliers (e.g., sales, income, or employment) for the applicable economy.

Conceptually, the notion of a multiplier is straightforward. Visitor spending captured by tourism-related businesses is spent and re-spent on inputs, such as materials and labor. This re-spending produces a total expenditure change that is a multiplied amount of the initial expenditure change. At each round of re-spending, money leaks out of the relevant economy through such areas as imports, taxes, and ...