The main positive economic impacts of tourism relate to foreign exchange earnings, contributions to government revenues, and generation of employment and business opportunities. These are discussed briefly here; further information on economic contributions from tourism can be found at the World Travel & Tourism Council's home page.

Foreign exchange earnings

Tourism expenditures and the export and 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.

Contribution to government revenues

Government revenues from the tourism sector can be categorized 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.

The World Travel and Tourism Council estimates that travel and tourism's direct, indirect, and personal tax contribution worldwide was over US$ 800 billion in 1998 - a figure it expects to double by 2010. (Source: WTTC/Michigan State University Tax Policy Center)

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, and indirectly 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.

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.

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. For example, Dorrigo National Park in New South Wales, Australia, has been estimated to contribute 7% of gross regional output and 8.4% of regional employment. The importance of tourism to local economies can also be illustrated by the impacts when it is disrupted: the catastrophic 1997 floods that closed Yosemite National Park in California cause locally severe economic losses to the areas around the park. In the most heavily impacted county, Mariposa County, 1997 personal income was reduced by an estimated US$1,159 per capita (US$18 million for the entire county) - a 6.6% decline. The county was also estimated to have lost US$1.67 million in county occupancy and sales tax revenues, and 956 jobs, a significant number in a county of fewer than 16,000 residents.

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, informal guides, rickshaw drivers, etc. The positive side of informal or unreported employment is that the money is returned to the local economy, and has 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.