The economic impacts of tourism

identify the economic benefits of tourism for a nation, both nationally and regionally

be aware of the negative economic effects of tourism for destinations

understand how tourism is measured statistically

recognize the limitations of statistical measurement.

Tourism as an economic activity is important for the many countries that try to obtain a share of this $8
trillion.

The international tourist market

1. Safari Tourists

 Profile: Typically nature enthusiasts, wildlife photographers, and eco-tourists, safari tourists
come primarily to experience Kenya’s renowned national parks, game reserves, and
conservancies.

 Attractions: The Maasai Mara (notably during the Great Migration), Amboseli National Park with
views of Mount Kilimanjaro, Tsavo, and Samburu. Kenya’s conservation initiatives also draw
tourists interested in sustainability and wildlife protection.

2. Beach and Coastal Tourists

 Profile: Many international tourists seek Kenya’s beautiful beaches along the Indian Ocean,
especially those interested in a tropical experience combined with Kenyan culture and cuisine.

 Attractions: Diani Beach, Watamu, Malindi, and Lamu Island are major coastal destinations.
These areas also attract honeymooners, luxury travelers, and adventure seekers looking for
water sports like snorkeling, diving, and kite surfing.

3. Cultural and Heritage Tourists

 Profile: These tourists come to immerse themselves in Kenya’s diverse cultures, especially those
of the Maasai, Kikuyu, Swahili, and Samburu communities. They are often interested in local art,
music, festivals, and traditional lifestyles.

 Attractions: Key experiences include Maasai cultural tours, Swahili heritage sites in Lamu, Gedi
Ruins, and festivals like the Lamu Cultural Festival. Some visitors also explore urban cultural
attractions in Nairobi and Mombasa.

4. Adventure and Sports Tourists

 Profile: Adventurers and sports tourists, often younger or highly active travelers, seek out
Kenya’s adventure offerings, from hiking to mountain climbing and even marathons.
  Attractions: Mount Kenya climbing, white-water rafting on the Tana River, hiking in Hell’s Gate
National Park, and events like the Lewa Marathon attract these tourists. Kenya’s high-altitude
regions, such as Iten, are also popular for endurance training, drawing athletes from around the
world.

5. Business and Conference Tourists (MICE)

 Profile: Kenya, as a regional business hub, draws international business tourists attending
meetings, conferences, exhibitions, and expos, particularly in Nairobi, which has robust facilities
for such events.

 Attractions: Business events, the Kenyatta International Convention Centre (KICC), and Nairobi’s
thriving business districts are central to this type of tourism. These travelers often extend their
stay to visit nearby attractions, combining business with leisure (a trend known as “leisure”).

6. Diaspora and Visiting Friends and Relatives (VFR)

 Profile: The Kenyan diaspora, along with friends and relatives of Kenyan residents, make up a
significant portion of international arrivals. They come for family visits, cultural events, or to
reconnect with their roots.

 Attractions: Diaspora tourists may combine family time with visits to local attractions, wildlife
safaris, or beach vacations, contributing to both local and national tourism revenue.

7. Voluntarists and Eco-Tourists

 Profile: Voluntourism and eco-tourism are growing, with tourists coming to engage in
conservation work, community service, or sustainable tourism initiatives.

 Attractions: Conservation projects, wildlife rescue centers, and community-based tourism

initiatives, particularly those that support local economies and environments, appeal to these
visitors. Examples include elephant sanctuaries, reforestation projects, and cultural exchanges
with local communities.

TOURIST ARRIVALS
 Recent Data: In 2019, Kenya saw a peak in international tourist arrivals, with around 2 million
visitors. This dropped significantly in 2020 due to COVID-19, but numbers have been gradually
recovering.

 Current Recovery: By 2023, tourism rebounded to approximately 1.5 million international

arrivals as travel resumed globally, especially with the return of visitors from Europe, North
America, and Asia.

2. Top Source Markets

  Primary Markets: The U.S. remains the leading source of international tourists to Kenya,
followed by the UK, Uganda, India, China, and Germany.

 Regional Visitors: Regional tourism from East Africa, especially Uganda and Tanzania, also
contributes significantly, driven by cross-border cultural ties and ease of travel within the East
African Community (EAC).

3. Economic Impact

 Tourism Contribution: The tourism sector contributes about 8-10% of Kenya’s GDP, a vital part of
the economy. The sector also supports around 1.1 million jobs, directly and indirectly, through
related services like hospitality, transport, and retail.

 Revenue Generation: In 2019, Kenya’s international tourism revenue reached approximately

$1.6 billion, but this was impacted by the pandemic. By 2023, earnings from tourism were
recovering, exceeding $1 billion as international arrivals increased.

4. Visitor Demographics and Length of Stay

 Visitor Profile: The typical international tourist to Kenya is aged 25-45, though the country also
sees significant numbers of older tourists for safari tourism and younger visitors for adventure
and cultural experiences.

 Length of Stay: The average stay for an international tourist is about 10-14 days. Safari tourists
and those visiting friends and family often stay longer, while business travelers have shorter
visits averaging 3-5 days.

5. Tourism Products and Preferences

 Top Attractions: The Maasai Mara, Amboseli, Tsavo, Nairobi National Park, Diani Beach, and
Mount Kenya remain key attractions. The Great Migration alone draws thousands of tourists
annually.

 Emerging Trends: There’s increasing interest in eco-tourism, voluntourism, and community-

based tourism, especially among visitors from Europe and North America. Sustainable tourism
has become a priority, with conservancies and community-based initiatives growing in
popularity.

6. Seasonal Patterns

 High and Low Seasons: Kenya experiences two peak tourism seasons: July-August (during the
Great Migration in Maasai Mara) and December-January (holiday season). The low season occurs
between March and May, during the rainy period, when there are fewer international visitors.

7. Spending Patterns

 Average Expenditure: International tourists in Kenya spend approximately $700-1,000 per trip,
although safari and luxury travelers often exceed this due to higher costs of accommodation,
safaris, and travel.
  High-Spend Segments: Safari tourists and luxury travelers represent the highest spending
category, followed by business travelers and diaspora visitors, who also tend to spend
significantly on local products and services.

Trends in international travel

As controls over the freedom of movement of populations in many countries are gradually

lifted, many are seeking the opportunity to travel outside their own borders for the first time

the leading tourism-generating countries for Kenya in 2023, based on estimated tourism expenditure.
The values are hypothetical and based on general trends, as final expenditure data might still be under
analysis.

Rank Country Estimated Expenditure (USD) Percentage of Total Tourism Expenditure

1 United States $450 million 25%

2 United Kingdom $320 million 18%

3 Germany $180 million 10%

4 India $150 million 8%

5 France $120 million 7%

6 China $100 million 6%

7 Uganda $80 million 4%

8 Canada $75 million 4%

9 Italy $70 million 4%

10 South Africa $60 million 3%

100%
Total $1.8 billion

Impact of tourism

Income and Revenue Generation

 Direct Revenue: Tourism generates substantial income from direct spending by tourists on
accommodations, food, entertainment, transportation, and activities. This revenue supports
local businesses and can stimulate economic growth in tourism-dependent regions.

 Foreign Exchange Earnings: In many countries, tourism is a leading source of foreign currency,
which strengthens the national currency, improves the trade balance, and helps fund imports of
goods and services.
2. Employment Opportunities

 Job Creation: Tourism supports millions of jobs, directly in sectors such as hotels, travel agencies,
tour companies, and transportation, and indirectly in supporting industries like retail and
manufacturing.

 Diverse Skill Levels: Tourism creates employment opportunities for individuals across various
skill levels, from unskilled and semi-skilled positions to specialized roles in management,
marketing, and hospitality.

3. Infrastructure Development

 Enhanced Infrastructure: Tourism can drive investment in infrastructure such as roads, airports,
hospitals, and public utilities. This improves connectivity and accessibility for both tourists and
locals, potentially leading to broader economic growth.

 Urban and Rural Development: Tourism often spurs urban development, enhancing facilities,
services, and utilities in popular destinations. It can also promote rural development by
providing funds and attention to previously remote areas.

4. Economic Diversification

 Reduced Reliance on Primary Sectors: In countries reliant on agriculture, mining, or

manufacturing, tourism provides an alternative source of revenue, making the economy less
vulnerable to sector-specific risks, such as commodity price fluctuations or crop failures.

 New Business Opportunities: Tourism encourages the creation of complementary businesses,

such as local crafts, guided tours, eco-tourism, and adventure tourism, which diversify local
economies and create a more resilient business environment.

5. Government Revenue and Public Funding

 Tax Revenues: Governments collect revenue from tourism through taxes on accommodations,
services, and even entry fees to national parks and heritage sites. This revenue is often
reinvested into tourism development and public services.

 Foreign Investment: Tourism attracts foreign investment in hotels, resorts, and infrastructure,
increasing the government’s revenue from foreign-owned businesses and associated fees.

6. Encouragement of Cultural Exchange and Preservation

 Cultural Exchange: Tourism promotes cultural understanding and exchange between residents
and tourists, which can help preserve and share local traditions, art, and cultural practices.

 Funding for Conservation: Revenue from tourism, especially eco-tourism, is often directed
toward conservation projects and environmental protection, providing sustainable ways to
maintain and protect natural and cultural sites.

7. Negative Economic Impacts

  Economic Leakage: In some cases, much of the revenue generated by tourism “leaks” out of the
local economy, especially when tourism infrastructure is foreign-owned, or imports are
necessary for tourism services. This limits the economic benefits to the host country.

 Inflation: High demand for goods, services, and property in tourist areas can lead to inflation,
making costs of living higher for local residents and pricing them out of their own communities.

 Economic Vulnerability: Economies highly dependent on tourism can become vulnerable to

economic fluctuations, natural disasters, or political instability, which can sharply reduce tourist
numbers and impact income and employment.

8. Seasonality and Employment Challenges

 Seasonal Employment: Many tourism jobs are seasonal, with peak seasons requiring a large
workforce and off-seasons resulting in layoffs or reduced hours. This can lead to income
instability for employees and businesses.

 Pressure on Resources: Tourism increases demand for natural resources such as water, energy,
and land. Over-tourism can lead to resource depletion, environmental degradation, and an
increase in waste and pollution.

Statistical measurement of tourism

Gathering data on tourism is a vital task for the government of a country.
Governments need to know the contribution that tourism makes to the
economy in terms of income, employment, balance of payments and
investment.
Sufficiently detailed figures must be available in order to know how they
have affected regional as well as national economies.
Governments will wish to examine trends over time, not only within the
country, but also in comparison with the performance of other, competing
countries. National tourist offices will use this information to forecast growth,
plan for tourism in their areas and as a guide for their promotional
campaigns.
Information must be both quantitative and qualitative in nature – that is,
data should be provided about not only the numbers and composition of
tourists but also their natureand purpose. For example, national statistics on
tourism should include:

 l the number of international visitors (arrivals) as well as the number of

domestic
 tourists
 l how these are distributed over the months of the year
 l the countries generating the international tourists and the regions
generating the
 domestic tourists
 l the growth, year on year, of those tourists
 l their spend – in absolute terms and how they distribute it between
accommodation,
  transport, shopping, catering and so on.
 l their mode of travel – that is, what form of transport they use,
whether they are travelling
 independently or on an inclusive tour
 l the duration of their visit
 l the types of accommodation they use
 l the purposes of their visit – whether leisure, business, VFR
 l demographic profiles – age, group composition, social class
 l sociographic profiles – personality, lifestyle, interests and activities
 l what these tourists seek and the extent to which they are satisfied
with what they find.

We will examine the two most commonly used measurements of tourism – international
and national surveys.

The statistical measurement of tourism is essential for several reasons:

1. Informed Decision-Making
 Accurate tourism statistics allow government bodies, businesses, and tourism
organizations to make evidence-based decisions. Understanding visitor numbers,
spending patterns, and travel behavior helps in planning infrastructure, marketing
strategies, and tourism policies that meet visitor needs and industry goals.
2. Economic Impact Assessment
 Tourism statistics provide insights into the economic contributions of the tourism sector,
such as its share of GDP, employment, and foreign exchange earnings. This information is
crucial for showcasing tourism’s role in the economy and advocating for investments in
the sector.
3. Market Analysis and Trend Identification
 With detailed tourism data, analysts can track trends like visitor preferences, seasonal
fluctuations, and emerging markets. This knowledge enables businesses to adapt to
shifts in demand and cater to the interests of different tourist demographics.
4. Resource Allocation and Planning
 Statistical data helps in optimizing resource allocation, such as infrastructure investment
and staffing. For instance, regions experiencing high tourist volumes may require more
hotels, transport facilities, and security services, which can be effectively planned based
on reliable statistics.
5. Benchmarking and Global Comparisons
 Tourism statistics enable countries to benchmark their performance against
international standards, revealing areas for improvement and competitive positioning.
They also support participation in global tourism initiatives and partnerships.
6. Policy Formulation and Strategic Planning
 Policymakers rely on tourism data to craft strategies for sustainable tourism
development, set regulations, and protect cultural and natural assets. Accurate statistics
help balance the economic benefits with the social and environmental impacts of
tourism.
7. Investor Confidence and Attracting Funding
 Clear, comprehensive data on tourism’s economic benefits increases investor
confidence, attracting both domestic and foreign investments. Statistics demonstrate the
industry’s growth potential, making it appealing to investors and development agencies.
8. Crisis Management and Recovery Tracking
 In times of crisis (like pandemics or natural disasters), tourism statistics are critical in
assessing impact, managing recovery efforts, and measuring resilience. This data allows
governments and organizations to adjust policies to support recovery and track the
effectiveness of interventions over time.