Author: Hall County B.O.E

Economic Impact of Hospitality and Tourism

The Impact of Hospitality
and Tourism
Travel, tourism, and hospitality have numerous effects on the world. The economic effects reach many levels of society, and profits from tourism can support regions visited by tourists. The effects of the industry are not just financial; the social and cultural impact of tourism is significant around the world. The development of infrastructures that support the needs of travelers help to create jobs. New infrastructures (hotels, restaurants, roadways, transportation) require employees to staff them, thus stimulating the economy. Food and beverage suppliers enjoy increased business that is a result of the new infrastructures. Newspapers and other media outlets benefit from advertising dollars spent on promoting businesses and local and federal governments receive tax revenue.

Did you know?
Hospitality is the largest industry in the world.
Hospitality is the 2nd largest employer in the USA.
Hospitality creates jobs in its four sectors throughout the community and helps to stimulate the economy.

Social and Cultural Impact

In the H&T Industry the products are the places people visit and the resources available to them. Unique cultures and established traditions can be affected by tourism. Tourist traveling to new places bring with them personal beliefs and behaviors. The way they dress, what they eat, and how they interact with others are all products of the customs and traditions of their home countries. Failure to protect these aspects can destroy the appeal of a destination. Tourist wish to experience cultural diversity when traveling, thus cultures can influence each other. Interest in a region’s culture and traditions has led to the revival of native arts and crafts, festivals and events. This helps to provide income to local residents who provide these types of services and products.

4 Segments of H&T Industry
Food Service, Lodging, Recreation, Travel and Tourism

Economic Multiplier
New tourist spend money on hotels, restaurants, attractions, airline tickets, or cruise. The money earned by those businesses goes toward paying employee wages, covering operating expenses such as rent and utilities, and purchasing food and beverages to be sold or served. These activities contribute to the economic multiplier, which is the process of how money filters through a local economy and is spent and respent, creating income for other businesses. The amount of the multiplier depends on how much money tourists spend per year and how much those tourist dollars “leak” offshore. Leakage is tourist dollars spent on imported goods so that revenue ends up in foreign economies.

H&T supports other industries.

The H&T industry helps other industries around it grow, thus creating a basis for an economy. Shop owners, business providers, government agencies, and other service providers, all rely on the tourism to bring people into their businesses. Georgia cities that exemplify the importance of the H&T industry and the affect that industry has on the economy as a whole, include but are not limited to: St. Simons, Savannah, Helen, Atlanta, and North Georgia Mountain area. Other non-tourist based economies also rely on the H&T industry for growth. For example, an agricultural community that raises lots of chicken may supply much of their products to food manufactures, which in turn is served in the foodservice sector of the H&T industry. Another example would be a M.D. that specializes in orthopedic surgery and lives in a town where many injuries are due to recreational activities. Ultimately, any town with a hotel, restaurant, or recreational activity is affected by and employs people in the H&T industry.

H&T in the USA and in Georgia

One in nine people in the US work in the H&T industry making it the 2nd largest employer in the country (healthcare is the 1st). Americans spend more on hospitality than any other country in the world. This money goes to support US economies and the economies of other places Americans visit such as Australia, Mexico, Europe and Canada. In Georgia alone the hospitality industry employs more than 241,000 full-time employees-generating over $6 billion in resident wages, and over $1.5 billion in state and local tax revenue annually. Georgia officials are looking to expanding the industry by adding a vibrant film industry and a transportation infrastructure to take people from the numerous attractions located throughout the state.