How does tourism affect the economy?
For certain rural areas that also have the benefit of a tourist amenity (think about a natural resource like a ski mountain, a lake, a river, a coastline or a infrastructure amenity like a swath of youth sports venues), there is an opportunity to create a tourist economy. It is important to realize that this is nothing more than an opportunity at this point and it needs to be nurtured by the community and municipal officials. A tourist amenity without supporting services around it is unlikely to yield an increase to the top line economic and community indicators.
However, if nurtured properly, an economy and a community can reap economic impacts that include a number of top-line economic and community metrics including income growth, wealth creation, employment growth, average hourly earnings, population growth, real estate value appreciation, regional economic output, and higher quality of life.
As alluded to in our long form piece that outlines how tourism affects the economy, the growth of a tourism economy follows a specific pattern. There are early indicators of success that should be measured closely. Eventually, if the community is fortunate and diligent enough they will start to see the growth of cyclical services.
The most compelling reason to lean into tourism as an economic engine is that it can be managed effectively without a ton of outside investment. If implemented thoughtfully, it can be measured and monitored to guarantee success.
To summarize, tourism can affect the economy in very positive ways like income growth, wealth creation, employment growth, average hourly earnings, population growth, real estate value appreciation, regional economic output, and higher quality of life. Conversely, tourism can affect the economy negatively by creating missed investment opportunities, paltry investment returns, outmigration, and even deteriorating quality of life.
The areas that manage their tourist economy with metrics can effectively steer the economy towards prosperity.
