Positive effects

The main positive economic impacts of tourism relate to foreign exchange earnings, contributions to government revenues, and generation of employment and business opportunities.

The main aspects of each are briefly discussed below:

1. Foreign exchange earnings: tourism expenditures and the export/import of related goods and services generate income to the host economy and can stimulate the investment necessary to finance growth in other economic sectors. Some countries seek to accelerate this growth by requiring visitors to bring in a certain amount of foreign currency for each day of their stay and do not allow them to take it out of the country again at the end of the trip.
2. Contribution to government revenues: government revenues from the tourism sector can be categorised as direct and indirect contributions. Direct contributions are generated by taxes on incomes from tourism employment and tourism businesses, and by direct levies on tourists such as departure taxes. Indirect contributions are those originated from taxes and duties levied on goods and services supplied to tourists. The United States National Park Service estimates that the 273 million visits to American national parks in 1993 generated direct and indirect expenditures of US$ 10 billion and 200,000 jobs. When visits to land managed by other agencies, and to state, local, and privately-managed parks, are added, parks were estimated to bring around US$ 22 billion annually to the US economy. These expenditures also generate significant tax revenues for the government.
3. Employment generation: the rapid expansion of international tourism has led to significant employment creation. For example, the hotel accommodation sector alone provided around 11.3 million jobs worldwide in 1995. Tourism can generate jobs directly through hotels, restaurants, nightclubs, taxis, and souvenir sales. Indirectly it provides employment through the supply of goods and services needed by tourism-related businesses. According to the WTO, tourism supports some 7% of the world's workers. In North Carolina for example, tourism expenditures in 2001 supported 196,400 jobs.
4. Stimulation of infrastructure investment: Tourism can induce the local government to make infrastructure improvements such as better water and sewage systems, roads, electricity, telephone and public transport networks, all of which can improve the quality of life for residents as well as facilitate tourism.
5. Contribution to local economies: tourism can be a significant, even essential, part of the local economy. As the environment is a basic component of the tourism industry's assets, tourism revenues are often used to measure the economic value of protected areas.

There are other local revenues that are not easily quantified, as not all tourist expenditures are formally registered in the macro-economic statistics. Money is earned from tourism through informal employment such as street vendors, tour guides, etc. The positive side of informal or unreported employment is that the money is returned to the local economy, having a great multiplier effect as it is spent over and over again. The World Travel and Tourism Council estimates that tourism generates an indirect contribution equal to 100% of direct tourism expenditures.