Problems with Tourism - Economic
Geography: Cambridge International GCSE (2027 Exams), topic 9.3.5
Economic Costs of Tourism
There are several economic costs of tourism. Economic costs include export leakage and import leakage. Tourism also harms the local economy of a tourist place.
Export leakage
- MNC/TNCs have resorts or hotels in LICs.
- MNC/TNCs employ only people from the HIC as managers.
- Managers are paid in the HIC where MNC/TNCs are based.
- So the wage money never enters the LIC.
Travel agent leakage
- People book through travel agents in HICs to travel to a LIC.
- The travel agent keeps up to 60% of the profits.
- So the LIC doesn't see much of the money.
Import leakage
- Tourists from HICs are often ignorant.
- Tourists want only food and drink from their own country because they trust it more.
International brands
- So, LICs must sell foreign brands instead of local food and drinks.
- Selling foreign brands means local firms earn less money.
Other economic costs
- Many tourists do not leave their resorts.
- So tourists do not improve the local economy.
- Jobs in tourism are hard work and lowly paid (maid, waiter).
- Many jobs are seasonal (skiing resorts).
Test yourself on Problems with Tourism - Economic
What is export leakage?
Which of the following statements about import leakage are correct?