Why Governments Invest in Tourism - Essay Example

Why governments invest in tourism It is agreeable that every nation around the globe views tourism as havinga great on economic development. Indeed, it is the key developer of economy and a large accountant of the country’s Gross Domestic Product. Tourism is a direct employer of hundreds and thousands of employees and creates additional job opportunities to other citizens within its long chain of operation (Hall, 2008:45). It encompasses a broad and wide range of market segments whereby, all of them have breadth of needs and motivations.

Considerably, tourism provides a more scope of investment in attractions, accommodation, tour operations, and transport. Having briefly highlighted some of the areas tourism incorporates, it is therefore essential for us to examine and explain the reasons as to why governments invest in tourism. To begin with, government’s support and participation in tourism is crucial in areas of management, planning, and development in every country. The possibility of small businesses, private sector, and the community at large to benefit from the tourism sector depends highly on the underpinning part played the government.

In order to attain successful results, the government must integrate tourism into the local environment in a manner that encourages corporation, is sustainable, and coordinates improvement. In this way, it enhances the quality of life and existence for the local community and revolutionizes the experience of the visitors to the country (59). In this case, government’s investment in tourism is essential because it has the resources and capability to set out policies that are beneficial to the overall country’s population as opposed to a few.

Secondly, since the tourism industry is such an intensive sector, it provides part of the country’s largest pool of employment opportunities for people of all ages. Jobs created through tourism give special support to areas that are experiencing the consequences that come about due to structural changes. In tourism and recreations industries, there are more than 50 different categories of job opportunities and over 200 occupations respectively. Given these broad margins of job opportunities, it is realistic to point out that, governments fund the tourism industry in order to create employment positions for their populations.

With adequate jobs for everyone, the country experiences economic growth as well as improving peoples’ standards of living (67). To do so, the government may chip to provide incentives for the tourism and hotel industry in form of partial exemption from the payment of income tax for a particular period. In this context, tourism companies will have to pay just a mere percentage of its statutory income starting from its production day. Following the fact that tourism generates additional demand, it has the ability of improving the financial viability of a country and its cultural and recreational facilities, which comprise of sporting venues, museums, galleries, and clubs.

Consequently, growth and development in tourism leads to new and expanded facilities, services, and infrastructure. In turn, these developments benefit the surrounding communities and the country at large. Apart from benefiting the community, the government funds tourism in order to create new business opportunities (89). Tourism has the potential of creating new commerce opportunities via the establishment of new facilities, services, products, and expand the existing business whereby this would not be sustainable if left in the hands of the resident population alone.

In this vein, the government uses incentives like giving a double deduction to hotels and tour operators on the promotional expenditure incurred overseas. Through investing in tourism, the government supports the country with multiplier effect. Cognitively, when tourists visit a country, they purchase services and goods thereby injecting new currencies into the country’s economy. Whoever receives the currency brought in by the tourists, spends a particular percentage on the country's economy.

In turn, this recipient re-spends the currency hence creating a multiplier effect. Studies show that, if an economy is keen enough to encourage large entry of tourists’ currencies and retain larger percentage of the currency, then the economy stands to benefit greatly. This means that, if a country is self sufficient, then its multiplier effect is great (97). To achieve this, a country provides support based on expanding and modernizing the existing policies revolving around expenditure. Another reason that prompts governments to invest in tourism is diversification.

Documented evidence points out that, tourism provide diversification, which is a significant particular for the countryside areas. Diversification diversifies a country’s economy by ensuring that it is less reliant on one traditional base like mining and agriculture where these are subject to commodity price fluctuations. Even though tourism depends on variation of seasons, its outcomes are tremendous and incomparable to other indigenous sources of income (101). Governments find it necessary to invest and fund the tourism industry with the aim of setting up long-term benefits.

Most governments aid in this subject through provision of incentives and support that include grants whereby, a tour firm applies for Investment Tax Allowance in order to offset its capital expenditure. In conclusion, these and many other reasons make governments invest in tourism. In new destinations, governments invest with the view of attracting tourists and setting up of new tourists’ attraction sites. As such, the country attains provides bases for attracting tourists and making them stay longer in the country (127).

In mature destinations, government’s investment aims at attracting both new customers and retaining the existing ones which in turn leads to expanded business. Thereafter, this generates more income, which raises the country’s Gross Domestic Product. Bibliography Hall, C. 2008. Tourism Planning: Policies, Processes and Relationships. London: Thomson Learning.