The contribution of tourism revenues to economic development during the terrorism crisis

Abstract

Tourism revenues have contributed to economic development in many countries, whether developed or developing, all over the world. It is one of the sources of foreign cash flows that contribute to increasing the Gross Domestic Product (Henceforth GDP). Tourism also contributes to providing employment opportunities as it is a labor-intensive industry. Egypt has many factors that attract tourists, especially cultural and natural tourism. However, its share in global tourism is still lower than its touristic position, especially during the terrorism crisis that Egypt has suffered from since 2011 and which contributed to the decline in tourism revenues from $ 11.6 billion to $ 3.8 billion during the period (2009-2010: 2014-2015). Because of the importance of tourism revenues, this study aims at identifying the extent to which it contributes to financing the services balance and analyzing its impact on both the services balance and the GDP during the study period (2001-2002: 2016-2017). The present study relied upon the descriptive and analytical methodology. The descriptive methodology describes the contribution of tourism revenues to economic development in light of the terrorism crisis in Egypt. It also identifies the development of the relationship between the tourism sector and terrorism. Regarding the analytical methodology, regression analysis is used to measure the impact of tourism revenues on Egypt's GDP. The descriptive approach was generally adopted with the help of statistical analysis tools to measure the statistical relationship of tourism revenues with the number of tourists, the services balance, and the GDP. The study showed a positive relationship between tourism revenues and GDP. Therefore, it recommends focusing on the development of the industrial and tourism sectors.