Prospects for the Development of Tourism Destinations and Travel Expenses
To ensure a sustained growth in the global tourism industry, emerging countries need to invest in improving their infrastructure, addressing safety and security concerns, and ensuring that the sustainability of their natural assets is maintained. While South America, South-East Asia, and Eastern Europe outperform the world average in terms of natural resources, they score below the average in terms of environmental sustainability. Despite the economic development in these countries, there is a potential risk of damage to the natural assets that attract tourists.
The growth of tourism receipts is important to economies in developing and emerging countries alike. Many countries are experiencing unprecedented growth, and the tourism sector accounts for almost half or more of their overall exports. The Bahamas, the Dominican Republic, and Jamaica have among the fastest-growing tourism sectors. Moreover, these countries enjoy an abundance of tourist infrastructure, which has contributed to their countries’ rapid economic growth. Similarly, the Caribbean has experienced significant increases in international receipts from foreign travel. This is an indication of the growing importance of the tourism sector for a nation’s economy.
In developing countries, tourism has become the fastest growing export sector
Developing countries have an additional advantage in the tourism sector. In terms of foreign direct investment (FDI), Mexico offers a significant opportunity for foreign companies to invest in the sector. Because tourism is perceived as less sensitive to trade agreements than other industries, it attracts international investors with limited competition. The Japans Aoki Group, a major shareholder in the Westin chain of U.S. hotels, plans to build a hotel and golf course in Cancun and invest US$20 million in the Ruinas del Rey project in Cancun. Germanys Robinson GmbH, a company with a focus on eco-friendly projects south of Cancun, has signed an agreement to develop an ecologically-oriented project in the region.
In developing countries, tourism receipts are the fastest-growing export item. In the Caribbean and Latin America, the tourism sector is the most important export item. Over two-thirds of the countries’ GDP are generated from tourism, and travel-related international receipts are growing by almost 11 percent per year. The IDB estimates that the income elasticity of demand for tourism is 1.7, indicating that the country’s economy benefits from the growth of tourism.
In developing countries, tourism offers a way to diversify their export earnings. Traditional exports are often subject to monetary fluctuations, border formalities, and price volatility. However, tourism has a number of other advantages. The country is not only closer to its major markets, but it is also a more affordable option for those who want to spend more time in these countries. In addition, the government’s government will benefit from the growth of tourism in the region.