Tourism is a form of export; if traditional exports are the export of goods, tourism is the export of services. People come to the country, have fun, and spend their money here - most of which is foreign currency. This allows the host country to pay for imports and debt and to increase its financial security. A holiday for an individual is indeed a large-scale international business with a considerable impact on the local community and the national economy.
Tourism’s Role in the Global Economy
Receipts from international tourism, according to OECD, World Tourism Organization (UN Tourism), and World Travel & Tourism Council (WTTC), are international tourism receipts. According to the World Tourism Organization, tourism accounted for 10% of the world’s GDP in 2024. According to the World Travel & Tourism Council, tourism generated about 11 trillion dollars in total revenue (over 9 trillion euros) in 2024. This is the amount of money spent by tourists on food, shopping, and entertainment, as well as the indirect effect of tourism on the economy - the purchase of goods by enterprises for their own use (primarily food, alcohol, and hotel supplies).
In addition, tourism provides employment for more than 357 million people worldwide, or about 10% of the world’s population. Moreover, in 2024, about 1.9 trillion dollars (about 1.5 trillion euros) was spent on international tourism. Thus, it is not just a local or seasonal business; it is a huge global economic player.
The Complex Network: Global Links and Local Realities
International tourism is a complex system in which local businesspeople are just one small link. When choosing a tour, a traveler may think that all the money goes to the local guide, but in reality, the payment is divided among dozens of companies around the world: the tour operator, the airline company, the hotel, the local tour guide, and even the phone company. Moreover, if the hotel is not local or the tour operator is not a tourist business but a financial company, then the money may leave the local economy for good.
It is therefore not always useful to talk about the benefits of tourism for a particular region or town without looking at the local economic balance. How much of the money spent by tourists stays local and how much is withdrawn through international companies depends on the specifics of each destination. The main thing is to maximize the amount of money circulating within the region by using local rather than foreign suppliers. For example, when organizing an excursion, it is good if the museum or attraction, the restaurant, and the shops in the souvenirs and food were bought local. The same applies to local transport: the use of local buses, taxis, or even private cars allows the traveler to keep more money in the local economy. The type of tourism also affects the balance: for example, the local content of community-based tourism or small-scale family-run hotels is naturally higher.
Employment: Volume Versus Quality
Tourism is one of the few industries that provides employment opportunities for almost everyone. Moreover, it is often the only way for a local person to earn a living. People need guides and translators, housekeepers and chefs, drivers and barkeepers, and artists. Local people have an advantage in many of these jobs, and they are also often in great demand. At the same time, many of these jobs are seasonal, poorly paid, and require hard work. In addition, employment in tourism is often informal, which increases the risk of exploitation of local workers. The International Labour Organization (ILO) has documented many cases of human rights abuses in the tourism industry. When discussing the role of tourism in the local economy, it is important to consider not only the number of jobs it creates but also their quality.
Foreign Investment and Urban Pressures
Many local communities are eager to attract foreign direct investment (FDI) in the tourism sector. This may be due to the fact that large hotel complexes or airlines owned by multinational corporations can provide better infrastructure for tourists. FDI has the advantage of making tourism more competitive and therefore more lucrative for the local economy. However, it also has the disadvantage of creating an unequal distribution of benefits: the profits of multinational corporations often flow directly out of the country. The UN Conference on Trade and Development (UNCTAD) highlights the importance of developing investment strategies for tourism that take into account not only the opportunities for FDI but also the need to protect local communities and the environment. For example, tourism businesses should be encouraged to use local products and services and to pay their share of taxes.
At the same time, a boom in international tourism can have a disastrous effect on the city. Large-scale short-term rentals, such as Airbnbs, devalue real estate and displace local residents and businesses. Moreover, the development of tourism infrastructure often leads to an unbalanced and unsustainable increase in property prices, which is called gentrification. This not only displaces ordinary residents but also threatens traditional local business owners. UNESCO has acknowledged the threat to world heritage sites from mass tourism, which has led to both a local and international backlash. The irony is that the unique character of the city, which attracts tourists, is gradually being erased under the pressure of large-scale business.
Vulnerability and Resilience
Like any other business, tourism is susceptible to crises. The biggest threat to tourism is pandemics and political conflicts, which can quickly drain an economy of its foreign currency. In addition, the value of the local currency is also important: if the national currency falls against the dollar or the euro, this makes the destination more expensive for foreigners and therefore less competitive. Currency fluctuations are difficult to predict and can be a problem for both residents and visitors.
Building More Beneficial Tourism
Destinations can take concrete steps to maximize local gains:
- Manage visitor flows through quotas, timed entries, diversified routes, and off-peak incentives to prevent overcrowding.
- Strengthen local supply chains (“kilometer zero” sourcing), supported by training and financing for small businesses.
- Protect housing and public spaces to maintain resident access and neighborhood vitality—the very authenticity tourists seek.
- Track meaningful indicators beyond arrivals and total spending: local wage levels, resident retention, employment quality, and conservation funding.
The Traveler’s Influence
A traveler who wants to maximize the benefits of tourism for the local economy should take into account several factors when choosing a destination, transportation, and hotel. First, it is important to choose an officially certified guide, which ensures that the money goes to a local person. It is also good if the souvenirs purchased have local origin. The traveler also has the opportunity to choose when to travel: the off-season is a good way to support the local economy. It is also important to pay attention to the tourist tax, which is designed to improve local infrastructure. In addition, choosing officially certified travel companies also helps to maximize the benefits of tourism for the local economy.
While the traveler will not be able to directly impact the complex web of international financial and economic relations that constitute modern tourism, he or she can make responsible choices that will ultimately benefit both the local community and the visitor. After all, every trip is primarily a personal experience and an adventure, but it can also be an investment in the future.
