Tourism Impacts GDP Growth (and Decline)

Abstract

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