Like any other activity, travel can affect the economy negatively and positively. However, most people try to undervalue the adverse effects of travel and maximize the positive impact. The economic aptitude of tourism is fundamental despite the drawback of accurately determining its actual value.
Tourism has vast economic potential, especially in a destination that wishes to expand in that industry. It creates job opportunities, currency exchange, imports, and tax revenues. Several reasons, like improved infrastructures and technologies, have led to increased tourism growth.
Positive Effects of Travel
Foreign exchange is one of the significant benefits of travel. Tourism expenditures generate income for a host economy, expanding the tourism industry or growing public services such as schools and health facilities.
Tourism also bestows government revenues through direct contributions such as taxes and indirect subsidies such as goods and services supplies unrelated to the tourism industry. For instance, tourists can purchase items at the local shops.
Negative Effects of Travel
The presence of tourists in a place brings about an increase in price due to increased demand for essential services and goods. And this leads to hiked prices that negatively affect the residents. Encouraging the purchase of local products and services and reducing the all-inclusive hotels could help curb this effect.
Infrastructure cost is also another negative economic effect brought about by tourism. Improving airport roads and other infrastructures could cost the residents and governments a lot of money that would otherwise go to improving other public sectors like education and health.
The Bottom Line
Travel can play a significant role in economic growth. However, tourism brings about negative impacts as well. So, to ensure further optimistic impacts results, excellent management of this sector is required.