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The Impact of Tourism on Economic Growth

I received an interesting question today. Mike from Oklahoma wants to know how have financial crisis hit the tourism if it has at all. Interesting question to ask since it is the end of the summer and we actually already received a lot of data about the tourism growth. And by what I have seen the tourism economic growth has decreased a lot since last year. The tourism has been hit as well and the number of tourists has decreased since last summer.

For example Croatia which is a small country on Balkan and gets most of its income from tourism is actually thinking to expand the vacations of children in schools in order to help its national tourism and in order to help its hotels to survive the summer.

It all makes sense of course. People are losing jobs, unemployment is very high and those who still have jobs are afraid they are going to lose them very soon. That then cause that people are afraid to go on vacations and pay a lot of money for it. That cause a decrease in the number of people traveling abroad during summer and of course as a consequence of that the tourism economic growth is small if not negative.

So to summarize it for you Mike of course the tourism has been effected as well by economic crisis going on in the world. Because of that, hotels and governments of course could not afford to invest as much as they would otherwise in the tourism and that of course means the tourism economic growth has decreased and is actually already negative in many countries around the world.

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