Methods for Assessing the Economic Impacts of Tourism
Most tourist agencies approximate their economic impacts of tourism from the expenditures on a particular destination. Revenues associated with tourist destinations become the economic impacts by transferring them into different categories where they combine various aggregates. On the other hand, Most of the regional planners rely on the economic impact analysis in assessing the economic impact of tourism to a destination. Therefore, to measure the economic effects of tourism to a destination, both simple and complex methods are used. Some of the methods used to measure the economic impact of tourism are the satellite accounts method and the visitor survey/input/output models.
Satellite Survey Method
Satellite survey method is a method that re-organizes the national system of accounts to give the overall aggregate estimates of tourism to a destination and the national economy at large. The method extracts the tourism-related activity from the destinations account. Therefore when spending towards a specific tourism destination, they use a survey approach that matches a particular market segment. Using the visitor’s survey, they collect data then apply to estimate the volume of tourist activities. Lastly, one needs to apply the total expenditure to the destinations regional economic model to bring out the economic impacts of tourism on a destination. Another thing about satellite accounting is the necessary procedure of claiming a share in the sales of a commodity. However, the shares differ depending on the tourist destination, while the information on how to estimate the shares comes from different sources. The advantage of this method is that it uses the current economic data and embeds tourism in an accepted account system (Research Methodology, 2017). However, the limitation that comes with this method is that the data collected is sometimes not complete or lacks consistency. Also, the method incurs many difficulties when applying below the national level or any subcategories of tourism activity.
Visitor Surveys/Input-output (I-O) models
Visitor survey or input-output model is a more common method that assesses the economic impacts of tourism to a destination. This method directly surveys the tourists and estimates their expenditure. For example, the basic equations of the visitor survey/I-O approach mean that tourist spending equals the number of Visitors multiply by the Average spending per visitor (MSU.EDU, n.d.). By using appropriate economic ratios and multipliers, the tourist expenditure estimates are converted into the resulting jobs and incomes. The method also provides much information useful for assessing the economic impacts of tourism. The input-output model uses the multiplier effects of tourist expenditure basing on the region. Multipliers effects can also be useful in converting the spending income and in capturing secondary economic impacts of tourism.
On the other hand, the model also employs the “with or without” framework in evaluating the impacts of a specific action or event. The visitor survey model is best when approximating the economic impacts of a new destination area or a museum that attracts fewer tourists to the destination (McCarthy & Morling, 2014). With the used of this model, the sample survey suffices hence reducing the computation burden. The output model is best suitable for use when compared to satellite accounts because it focuses on the impacts rather than satellites accounts, which only focuses on the importance of a tourist destination.
References
McCarthy, D., & Morling, P. (2014). Assessing the economic impacts of nature-based tourism. Giving Nature a Voice. Retrieved from http://eurosite.org/wp-content/uploads/NatPeoWor_W2_MorlingMcCarthy.pdf
MSU.EDU. (n.d.). Economic Impacts– Methods. MSU.EDU. Retrieved from https://msu.edu/course/prr/840/econimpact/methods.htm
Research Methodology. (2017). Economic Impacts of Tourism and characteristics. Research Methodology. Retrieved from http://researchmethodology.org/economic-impact-of-tourism/