Tourism Impacts GDP Growth (and Decline)

Abstract

According to the recent “World Tourism And Travel Council” report tourism contributes 10.3% toglobal GDP. In 2020, it dropped to 5.5 due to the coronavirus pandemic. It is an industry that createsat least 260 million jobs. Tourism’s proportions to a country’s GDP is closely linked to the number ofjobs it creates. When tourism develops, businesses thrive, which leads to more job opportunities. Asa result, more people have money to spend within their local economy. This increase in sales tax revenuefunds important infrastructural and environmental endeavours in the community. As an examplein 2022, the United States reported the highest total contribution of travel and tourism to GDP, withthese industries generating, directly and indirectly, roughly two trillion U.S. dollars. The tourism sectorin the Latin American and Caribbean countries contributes significantly to GDP earnings, thoughthis contribution is not reflected in the domestic income and product accounts of most countries. Inthe Bahamas, tourism accounts for about one-third of GDP, and most sectors of economic activityare directly or indirectly linked to it. In Barbados, tourism is the leading economic sector, accountingfor 15 percent of the GDP in 1992. In Jamaica, the tourism contribution to GDP was 13.4 percent in1992, while in Mexico it was only 4 percent.