ouch

The first impact that we may note with respect to the tourism and related developments is the capacity of certain international forms of tourism to earn foreign currency and also to influence, in a positive way, a country’s balance of payments account (this being the net difference between the value of exports and the cost of imports). With the world tourism ‘trade’ currently valued at US $320 billion annually, the potential of tourism to influence the accumulation of wealth in particular regions is considerable.

Tourism is an example of what economists refer to as ‘invisible’ trade elements, meaning that such trade is not necessarily in tangible (and hence easily measurable) flow of goods and services. However, we may gain an idea of the spatial puttering in national income and the gains and losses in foreign currency through tourism by comparing what a nation earns through the expenditures incurred by the foreign visitors with what its own nationals spend when they themselves become tourists to another country. This is sometimes referred to as the ‘travel account’. Published statistics give out the balance of tourist trade in the top Organization of Economic Cooperation and Development (OECD) member countries, as measured by gross tourism receipts and according to whether those countries are in surplus or deficit on their travel account.

Two points are worth noting here. First, nations that are conspicuous generators of tourists, especially Germany, Japan and the United Kingdom, tend to be in ‘deficit’ on this particular form of measurement, Germany and Japan are spectacularly so. However, the statistics tell only a partial story since countries such as Germany and the United Kingdom are able to transform the contribution from tourism to their balance of payments – often from an apparent deficit into surplus – through such pathways as ownership and control of tour companies, airlines, transport operators, international hotel chains and less obviously, profits from insurance and banking services that support the international tourism industry. When considering the Indian experience, through properly designed tourism package kerala is the only state that was able to earn much foreign exchange reserves. Also it has taken a cue from the above mentioned approaches followed in the West.