Foreign direct investment in tourism—flows and volumes

Abstract

Despite the importance of tourism receipts in global services trade, there are, apparently, not many studies done on foreign direct investment (FDI) in tourism. In reference to the available data, this study aims to reveal the pattern and the scale of global FDI in tourism. The practices of selected transnational corporation (TNC) hotels confirm that the use of non-equity forms is more frequent than FDI. Nonetheless, FDI in tourism—using FDI in hotels and restaurants as a proxy—increased dramatically over time, but the relative size to the global FDI remains low. The overwhelming majority of FDI has been directed to developed countries. For some developing countries, the role played by FDI in tourism is much more critical in their overall economic activities. Careful analyses are recommended before attracting FDI or TNCs in tourism within their overall development strategies.