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Tourism’s Importance for Growth Highlighted in World Economic Outlook Report

• All Regions
• 10 Nov 2023

Tourism has again been identified as a key driver of economic recovery and growth in a new report by the International Monetary Fund (IMF). With UNWTO data pointing to a return to 95% of pre-pandemic tourist numbers by the end of the year in the best case scenario, the IMF report outlines the positive impact the sector’s rapid recovery will have on certain economies worldwide.

According to the World Economic Outlook (WEO) Report , the global economy will grow an estimated 3.0% in 2023 and 2.9% in 2024. While this is higher than previous forecasts, it is nevertheless below the 3.5% rate of growth recorded in 2022, pointing to the continued impacts of the pandemic and Russia's invasion of Ukraine, and from the cost-of-living crisis.

Tourism key sector for growth

The WEO report analyses economic growth in every global region, connecting performance with key sectors, including tourism. Notably, those economies with "large travel and tourism sectors" show strong economic resilience and robust levels of economic activity. More specifically, countries where tourism represents a high percentage of GDP   have recorded faster recovery from the impacts of the pandemic in comparison to economies where tourism is not a significant sector.

As the report Foreword notes: "Strong demand for services has supported service-oriented economies—including important tourism destinations such as France and Spain".

Looking Ahead

The latest outlook from the IMF comes on the back of UNWTO's most recent analysis of the prospects for tourism, at the global and regional levels. Pending the release of the November 2023 World Tourism Barometer , international tourism is on track to reach 80% to 95% of pre-pandemic levels in 2023. Prospects for September-December 2023 point to continued recovery, driven by the still pent-up demand and increased air connectivity particularly in Asia and the Pacific where recovery is still subdued.

Related links

• Download the News Release on PDF
• UNWTO World Tourism Barometer
• IMF World Economic Outlook

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Managing the development of tourism infrastructure

• Toolkit About the Sustainable Tourism Toolkit How to use this guide? Our Objective Resource Library
• Guides Strategic foundations Guide 1: Understanding Guide 2: Strategy Guide 3: Governance Guide 4: Engagement Core Delivery Guide 5: Communication Guide 6: Infrastructure Guide 7: Value Guide 8: Behaviour Guide 9: Investment Guide 10: Monitoring
• Case Studies Guide 1: Historic Town of Vigan Guide 2: Angkor Guide 2: Ichkeul National Park Guide 3: Melaka and George Town Guide 4: Avebury Guide 4: Old and New Towns of Edinburgh Guide 4: Great Barrier Reef Guide 4: Røros mining town and the circumference Guide 5: Røros Mining Town and the Circumference Guide 6: Cornwall and West Devon Mining Landscape (United Kingdom) Guide 7: Røros Mining Town and the Circumference Guide 8: Wadi Al-Hitan Guide 9: Land of Frankincense

What this guide 1 will tell you

This guide 6 will tell you why infrastructure is vital to sustainable tourism and how to begin the process of developing appropriate infrastructure.

Steps to success

Why this matters.

According to the World Tourism Council, infrastructure is the single most important key to tourism growth and performance. Tourists use a tiny fraction of their overall visitor spending at the actual heritage site in most destinations; main tourism spending goes towards transport and travel , accommodation, food and drink, and retail and leisure. Understanding the tourism market is not normally the job of heritage managers , but to gain the most economic benefit from visitors they need to develop products , services, or partnerships that return more financial value. This extra revenue would, in turn, support site management and sustainability.

You should undertake destination development with an awareness of the commercial realities of your destination: how can you sustainably encourage increased spending from tourists to benefit your site and/or local community? You also need to be aware that tourism often results in massive increases in the population of some communities, especially during the peak seasons, and this raises many issues about the sustainability of the destination as a whole.

Begin a master-planning process to ensure the infrastructure is fit-for-purpose for future tourism development and does not negatively affect the OUV

Any infrastructure developments in a World Heritage property would require the completion of an independent Heritage and/or Environmental Impact Assessment to be completed before any such projects are undertaken. You can find more information on Heritage Impact Assessments from ICOMOS here and Environmental Impact Assessments from IUCN here .

Identify the key stakeholders who can influence the physical development of the destination in the future. Stages 1 and 2 should have established whether tourism growth is appropriate, manageable at your destination, and how best this might happen. This will often require a long-term approach to managing the development of infrastructure.

With some sites experiencing growth of visitor numbers at 20-40% per annum, some destinations will have to make big decisions about curtailing growth or developing the infrastructure to deal with it. You might need to involve people with expertise in water, waste, transport, and tourism trends and markets analysis, so the different elements of the destination are effectively interlinked.

Start by identifying what is needed to make the current tourism sector more sustainable, and what might also be needed for any projected or desired growth in visitor numbers. There is no point having unachievable goals , but if the current or future demand exceeds the capability of the current infrastructure, then something has to give. It may mean some form of control to manage numbers, or the need for new infrastructure.

If people cannot get to your site or have no place to stay – no matter what you do to encourage them – they simply cannot visit . Many destinations have high room occupancy in peak season and cannot (without new hotels, etc.) accommodate more visitors. If there is no spare capacity , or it is not sustainable to increase capacity, then your destination is left with two options:

• Use your World Heritage and your site’s story to attract visitors in the non-peak months, which would sustain tourism jobs for local people year-round.
• Simply do not try to increase visitor numbers. Instead, develop and implement a strategy for changing the visitor profile to higher spending, more sympathetic and more sustainable visitors, using WH Status as a driver.

Some sites with little or no hotel infrastructure have developed a system of 'home stays ', which enable visitors to stay with local people. This also means that the host community secures a greater share of visitor spending.

Making tourism more sustainable requires careful thought about the transport infrastructure in order to minimize CO2 emissions and congestion. It also demands that accommodation minim izes its ecological footprint through good management practices and strategic thinking about water, renewable technologies, and food and waste management. Provide tourism businesses with clear guidelines about the need for appropriate systems to treat, re-use, or safely release waste water or solid wastes, as well as other forms of pollution (such as light and noise pollution). You can also encourage businesses to publicize their energy reductions and sustainability commitments. If analysis of your infrastructure does not look at tourism in its widest sense, then it will be flawed and poorly developed.

Develop a spatial masterplan for the destination

Invest in a master-planning process that takes account of the constraints and responsibilities of a World Heritage site. Many destinations will experience development that has a capital cost of many hundreds of millions of dollars. Given this scale of investment, it makes good sense from both a commercial and a conservation perspective to have a masterplan that sets the parameters of growth. This often requires specialist support or at least a combined effort of specialist heritage staff and planners who can work together to develop a plan that makes it clear to everyone:

• Where things can and cannot happen
• What the requirements would be of any development
• Why these decisions have been made

It is essential that stakeholders believe the future of the destination can be shaped , influenced, and ultimately designed to be fit-for-purpose – this is how great destinations secure the outcomes they desire. It is about developing a progressive vision for tourism that protects, conserves, and respects important heritage and delivers outcomes that are desired by the host communities. The alternative is a laissez-faire approach in which conservationists will always be fighting a reactive battle against the negative effects of tourism growth.

Publish the masterplan so that tourism businesses, the community, and conservationists all know what kinds of development are appropriate in any given area of the destination. No tourism business enjoys being told its growth is potentially constrained by its location, but it is worse to invest large amounts of money in plans and ideas that are not likely to be approved because they may have a negative effect on the OUV of the site. There are times a great deal of money allows projects to go ahead. However, by damaging the heritage, you ultimately waste that money by destroying the OUV, which is the attraction of that destination to tourists.

Plan ahead for the infrastructure you need to achieve the strategic goals you desire

Location matters. The location of tourism infrastructure – airports, railways stations, bus depots, hotels, B&Bs, restaurants, bars, cafes, museums, retail outlets, etc. – usually defines where visitors will spend their money, who will benefit from it, who will not, and where the ecological footprint of the visitor is experienced. Changing the location of infrastructure can have profound positive or negative impacts on the heritage, the host community, and their culture and quality of life. If the strategic goal is to offer improved economic opportunities for local people, then it is imperative some of the tourism infrastructure where money is spent is in locations that local people can own , manage, or work. For heritage management reasons, it may be necessary to relocate infrastructure away from the heritage, or to develop new infrastructure at some distance to ensure that resources, such as water and waste can be managed effectively. Keep in mind where this happens, there is a risk of the host community being excluded from significant economic benefits.

Some sites are already serviced by infrastructure located some distance away from the site, and this has both benefits and costs – the cost being that much of the economic impact is lost as visitors stay, eat, drink, shop, and relax elsewhere. In these situations, there can be a mismatch between those who suffer the costs and constraints of the site, and those who benefit and profit. In these instances, some mechanisms to return revenue to the host community are often needed ( see Guide 9 on Fundraising and Investment). If your tourism infrastructure is in the wrong location, you need to consider either :

• Developing economic infrastructure in a more appropriate location
• Working within your infrastructure constraints
• Or creating a ‘payback’ mechanism to link the distant tourism infrastructure to the costs of the site.

Scale matters. Larger businesses are less likely to be locally owned, but they are often more efficient, productive, and return higher wages to the local community. Because of their scale, l arger businesses can deliver service to a larger numbers of visitors at lower prices, but economic sustainability suffers as profits from the business are often not retained locally, regionally, or even nationally. On the other hand, local sustainable tourism initiatives are small and lack the scale and capacity to cater to the majority of visitors to a destination. Critically, small businesses may not be able to offer the year-round, skilled employment, salary, or career progression opportunities larger businesses can.

The challenge for your site is to find the balance between the benefits of large scale businesses that can provide high quality employment and tourist services, and the smaller sustainable businesses, which are much more likely to be locally owned and managed. Support host communities to develop their businesses to have the necessary scale to maximize benefit. One solution is to explore different ownership models for hotels and other areas of infrastructure so the host community or groups of residents can develop a share in the destination.

Quality matters. Cultural and World Heritage tourists are more economically valuable , but they also have higher expectations about quality. The ability to secure the maximum benefit from tourism in a destination is inextricably tied to the quality of product , particularly the accommodation your destination offers. If your site lacks enough quality accommodation, it could significantly affect the economic profile and impact of the tourists visiting your site – the more visitors to your destination that stay in good quality accommodation, the greater their spending . You need to understand if the quality of your accommodation stock is limiting the economic potential from particular types of visitor, and then work with businesses to improve quality . Some destinations have developed quality improvement programmes with support and incentives for businesses willing to invest their own money in raising standards. Accreditation can be a powerful way to reward investors for doing the right kind of development – with incentives for those who go the extra mile, such as promoting the most sustainable businesses prominently on the World Heritage website.

Capacity matters . Your work on understanding tourism ( Guide 1 Understanding Tourism) should have revealed what the capacity curve for your destination looks like. In most cases, there is a peak period, when the existing accommodation is close to capacity, and ‘shoulder’ or off-peak seasons, when it is running well below capacity. One of the most sensible ways to improve the economic performance of a destination, and ensure local people have all-year-round employment, is to promote off-peak season visits . This requires little or no new infrastructure, and it can make a big difference to the efficiency of the destination. Simply building more peak season capacity can often be misguided and unsustainable.

Ownership matters . In many destinations the opportunities for local people are limited to low skilled and lower paid roles, so when developing plans for the future of your destination, explore whether or not some of the desired infrastructure can be developed in ways that will benefit the host community. There are a range of ownership models that enable communities to own elements of the tourism infrastructure or be shareholders in it. Some destinations have strong cooperatives of individuals or businesses that offer products, services, or experiences, and they have invested in such models to empower local people . Ownership gives local people more control and a share of the profits. However, it should also be pointed out that ownership is not always critical. Most turnover for a hotel is in wages, with the profit being only a small margin of that turnover.

Transport and routing matters. Being able to influence transport is crucial to creating a sustainable system at many World Heritage sites. It is important that destinations develop itineraries with transport providers that encourage more sustainable transport, but also influence where people stop to spend their money and where they have their environmental impact. Simple things like having a rest room break before entering a site can reduce the water usage and waste disposal issues within a site.

All growth needs to be in the context of respecting and conserving the OUV of the World Heritage site and its environs

Above all, it is the responsibility of the destination to protect the heritage from irresponsible development through planning or 'development control'. The World Heritage site, itself, and the designation are key assets for any destination – all plans for developing infrastructure need to be based on a deep respect for, and understanding of, the World Heritage site. It is crucially important that the sense of place and distinctiveness are protected. These guides are based on the assumption that sites value their World Heritage status and have planning control systems that can protect the heritage from development that is not appropriate. Work hard to retain the sense of place, distinctiveness, and authenticity of the destination. When you do have to build new infrastructure, work closely with planning control officers so they understand the need to balance heritage conservation and the demand for development.

Secure and encourage investment to make your plans a reality

Encourage the private sector to develop the infrastructure . The role of destination management is to define the parameters of growth – setting out what is appropriate (and where) in a tourism destination. This will often mean that the development that does take place will be commercial.

Develop a Community Fund to help local people and communities secure the capital needed to offer goods, services, and products to visitors. Relatively small amounts of seed capital can give local people a foothold in the marketplace ( See Guide 9 Fundraising and Investment).

Identify any public realm or free-to-access infrastructure needed and find a way to deliver it. In this case, it is critical that an effective case is researched, well-crafted, and specific to the investment sought ( See Guide 9 Fundraising and Investment).

Guide 6 PDF version

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• Understanding Poverty
• Competitiveness

Tourism and Competitiveness

• Publications

The tourism sector provides opportunities for developing countries to create productive and inclusive jobs, grow innovative firms, finance the conservation of natural and cultural assets, and increase economic empowerment, especially for women, who comprise the majority of the tourism sector’s workforce. Before the COVID-19 pandemic, tourism was the world’s largest service sector—providing one in ten jobs worldwide,  almost seven percent of all international trade and  25 percent of the world’s service exports —a critical foreign exchange generator.  In 2019 the sector was valued at more than US$9 trillion and accounted for 10.4 percent of global GDP.

Tourism offers opportunities for economic diversification and market-creation. When effectively managed, its deep local value chains can expand demand for existing and new products and services that directly and positively impact the poor and rural/isolated communities. The sector can also be a force for biodiversity conservation, heritage protection, and climate-friendly livelihoods, making up a key pillar of the blue/green economy. This potential is also associated with social and environmental risks, which need to be managed and mitigated to maximize the sector’s net-positive benefits.

The impact of the COVID-19 pandemic has been devastating for tourism service providers, with a loss of 20 percent of all tourism jobs (62 million), and US$1.3 trillion in export revenue, leading to a reduction of 50 percent of its  contribution to GDP  in 2020 alone. The collapse of demand has severely impacted the livelihoods of tourism-dependent communities, small businesses and women-run enterprises. It has also reduced government tax revenues and constrained the availability of resources for destination management and site conservation.

Naturalist local guide with group of tourist in Cuyabeno Wildlife Reserve Ecuador. Photo: Ammit Jack/Shutterstock

Tourism and Competitiveness Strategic Pillars

Our solutions are integrated across the following areas:

• Competitive and Productive Tourism Markets. We work with government and private sector stakeholders to foster competitive tourism markets that create productive jobs, improve visitor expenditure and impact, and are supportive of high-growth, innovative firms. To do so we offer guidance on firm and destination level recovery, policy and regulatory reforms, demand diversification, investment promotion and market access. 
• Blue, Green and Resilient Tourism Economies. We support economic diversification to sustain natural capital and tourism assets, prepare for external and climate-related shocks, and be sustainably managed through strong policy, coordination, and governance improvements. To do so we offer support to align the tourism enabling and policy environment towards sustainability, while improving tourism destination and site planning, development, and management. We work with governments to enhance the sector’s resilience and to foster the development of innovative sustainable financing instruments.
• Inclusive Value Chains. We work with client governments and intermediaries to support Small and Medium sized Enterprises (SMEs), and strengthen value chains that provide equitable livelihoods for communities, women, youth, minorities, and local businesses. 

The successful design and implementation of reforms in the tourism space requires the combined effort of diverse line ministries and agencies, and an understanding of the impact of digital technologies in the industry. Accordingly, our teams support cross-cutting issues of tourism governance and coordination, digital innovation and the use and application of data throughout the three focus areas of work.

Tourism and Competitiveness Theory of Change 

Examples of our projects:

• In Indonesia , a US$955m loan is supporting the Government’s Integrated Infrastructure Development for National Tourism Strategic Areas Project. This project is designed to improve the quality of, and access to, tourism-relevant basic infrastructure and services, strengthen local economy linkages to tourism, and attract private investment in selected tourism destinations. In its initial phases, the project has supported detailed market and demand analyses needed to justify significant public investment, mobilized integrated tourism destination masterplans for each new destination and established essential coordination mechanisms at the national level and at all seventeen of the Project’s participating districts and cities.
• In Madagascar , a series of projects totaling US$450m in lending and IFC Technical Assistance have contributed to the sustainable growth of the tourism sector by enhancing access to enabling infrastructure and services in target regions. Activities under the project focused on providing support to SMEs, capacity building to institutions, and promoting investment and enabling environment reforms. They resulted in the creation of more than 10,000 jobs and the registration of more than 30,000 businesses. As a result of COVID-19, the project provided emergency support both to government institutions (i.e., Ministry of Tourism) and other organizations such as the National Tourism Promotion Board to plan, strategize and implement initiatives to address effects of the pandemic and support the sector’s gradual relaunch, as well as to directly support tourism companies and workers groups most affected by the crisis. 
• In Sierra Leone , an Economic Diversification Project has a strong focus on sustainable tourism development.  The project is contributing significantly to the COVID-19 recovery, with its focus on the creation of six new tourism destinations, attracting new private investment, and building the capacity of government ministries to successfully manage and market their tourism assets.  This project aims to contribute to the development of more circular economy tourism business models, and support the growth of women- run tourism businesses.  
• Through the Rebuilding Tourism Competitiveness: Tourism Response, Recovery and Resilience to the COVID-19 Crisis initiative and the Tourism for Development Learning Series , we held webinars, published insights and guidance notes as well as formed new partnerships with Organization of Eastern Caribbean States, United Nations Environment Program, United Nations World Tourism Organization, and World Travel and Tourism Council to exchange knowledge on managing tourism throughout the pandemic, planning for recovery and building back better. The initiative’s key Policy Note has been downloaded more than 20,000 times and has been used to inform recovery initiatives in over 30 countries across 6 regions.
• The Global Aviation Dashboard  is a platform that visualizes real-time changes in global flight movements, allowing users to generate 2D & 3D visualizations, charts, graphs, and tables; and ranking animations for: flight volume, seat volume, and available seat kilometers.  Data is available for domestic, intra-regional, and inter-regional routes across all regions, countries, airports, and airlines on a daily, weekly, or monthly basis from January 2020 until today. The dashboard has been used to track the status and recovery of global travel and inform policy and operational actions.

Traditional Samburu women in Kenya. Photo: hecke61/Shutterstock.

Featured Data

We-Fi WeTour Women in Tourism Enterprise Surveys (2019)

• Sierra Leone  |  Ghana

Featured Reports 

• Destination Management Handbook: A Guide to the Planning and Implementation of Destination Management  (2023)
• Blue Tourism in Islands and Small Tourism-Dependent Coastal States : Tools and Recovery Strategies (2022)
• Resilient Tourism: Competitiveness in the Face of Disasters  (2020)
• Tourism and the Sharing Economy: Policy and Potential of Sustainable Peer-to-Peer Accommodation  (2018)
• Supporting Sustainable Livelihoods through Wildlife Tourism  (2018)
• The Voice of Travelers: Leveraging User-Generated Content for Tourism Development  (2018)
• Women and Tourism: Designing for Inclusion  (2017)
• Twenty Reasons Sustainable Tourism Counts for Development  (2017)
• An introduction to tourism concessioning:14 characteristics of successful programs.  The World Bank, 2016)
• Getting financed: 9 tips for community joint ventures in tourism . World Wildlife Fund (WWF) and World Bank, (2015)
• Global investment promotion best practices: Winning tourism investment” Investment Climate  (2013)

Country-Specific

• COVID-19 and Tourism in South Asia: Opportunities for Sustainable Regional Outcomes  (2020)
• Demand Analysis for Tourism in African Local Communities  (2018)
• Tourism in Africa: Harnessing Tourism for Growth and Improved Livelihoods . Africa Development Forum (2014)

COVID-19 Response

• Expecting the Unexpected : Tools and Policy Considerations to Support the Recovery and Resilience of the Tourism Sector (2022)
• Rebuilding Tourism Competitiveness. Tourism response, recovery and resilience to the COVID-19 crisis  (2020)
• COVID-19 and Tourism in South Asia Opportunities for Sustainable Regional Outcomes  (2020)  
• WBG support for tourism clients and destinations during the COVID-19 crisis  (2020)
• Tourism for Development: Tourism Diagnostic Toolkit  (2019)
• Tourism Theory of Change  (2018)

Country   -Specific

• COVID Impact Mitigation Survey Results  (South Africa) (2020)
• COVID Preparedness for Reopening Survey Results  (South Africa) (2020)
• COVID Study  (Fiji) (2020) with   IFC

Featured Blogs

• Fiona Stewart, Samantha Power & Shaun Mann ,  Harnessing the power of capital markets to conserve and restore global biodiversity through “Natural Asset Companies”   | October 12 th  2021
• Mari Elka Pangestu ,  Tourism in the post-COVID world: Three steps to build better forward  | April 30 th  2021
• Hartwig Schafer ,  Regional collaboration can help South Asian nations rebuild and strengthen tourism industry  | July 23 rd  2020
• Caroline Freund ,  We can’t travel, but we can take measures to preserve jobs in the tourism industry  | March 20 th  2020

Featured Webinars

• Destination Management for Resilient Growth . This webinar looks at emerging destinations at the local level to examine the opportunities, examples, and best tools available. Destination Management Handbook
• Launch of the Future of Pacific Tourism. This webinar goes through the results of the new Future of Pacific Tourism report. It was launched by FCI Regional and Global Managers with Discussants from the Asian Development Bank and Intrepid Group.
• Circular Economy and Tourism . This webinar discusses how new and circular business models are needed to change the way tourism operates and enable businesses and destinations to be sustainable.
• Closing the Gap: Gender in Projects and Analytics .  The purpose of this webinar is to raise awareness on integrating gender considerations into projects and provide guidelines for future project design in various sectoral areas.
• WTO Tourism Resilience: Building forward Better. High-level panelists from Sri Lanka, Costa Rica, Jordan and Kenya discuss how donors, governments and the private sector can work together most effectively to rebuild the tourism industry and improve its resilience for the future.
• Tourism Watch
• [email protected]

Launch of Blue Tourism Resource Portal

Tradeology, the ITA Blog

America’s travel comeback: five ways we’re supporting our travel & tourism industry .

Grant T. Harris is the Assistant Secretary of Commerce for Industry & Analysis  

This is the fourth piece in a blog series about the 2023 National Export Strategy , a government-wide strategic plan to support American businesses through trade promotion activities. This article focuses on the Travel and Tourism chapter of the National Export Strategy. This post contains external links. Please review our external linking policy .  

The holiday travel season is here! As families and friends gather for celebrations, it’s a great time to spotlight a critical driver of economic growth and employment in the United States: the travel and tourism industry. 

You’ve seen the headlines: Travel is back, and travelers from all over the nation and world are bringing immense economic benefits to communities across the country. In 2021, $1.7 trillion of economic activity was generated by the travel and tourism industry, and nearly 1 in every 20 jobs in the United States relies directly or indirectly on this sector. The Department of Commerce has made it a top priority to strengthen our nation’s global competitiveness in travel and tourism, and to create a more equitable, resilient, and sustainable travel and tourism industry for the future. 

We are hard at work implementing the Biden-Harris Administration’s National Travel and Tourism Strategy and, as we head into the holiday season, we wanted to highlight five things you need to know about travel and tourism in the United States: 

1. Travel to the United States is bouncing back  

ITA’s National Travel and Tourism Office forecasts that we are on track to reach the National Travel and Tourism Strategy’s goal of welcoming 90 million visitors to the United States by 2027. These visitors are estimated to spend $279 billion annually. This is positive news and is based on data that ITA’s economists collect and analyze from the Survey of International Air Travelers and other sources. In 2022, nearly 51 million international visitors came to the United States—more than double the number from 2021. Those travelers spent $165 billion on goods and services, supporting more than 1 million American jobs. In the first nine months of 2023, international visitation to the United States reached 82% of what it was pre-pandemic—a significant improvement from 61% during the first eight months of 2022. 

2. We are working to meet visa demand and enhance the travel experience  

The U.S. Department of State is issuing visas at a record pace as demand for travel to the United States around the world continues to surge following the pandemic. At the same time, the U.S. Department of Homeland Security’s Customs and Border Protection agency is expanding biometric entry and exit through public-private partnerships with airlines and airports to enhance security and the travel experience.   

3. We are working to make destinations more accessible for travelers with disabilities  

The U.S. Government wants to facilitate travel opportunities for people with disabilities. One way we’re doing that is by better communicating accessibility information to the public so that more travelers can enjoy national parks, historical and landmark destinations, and natural attractions. For instance, the National Park Service launched a new resource to help travelers with disabilities plan trips by providing information on accessible features and services at national parks. Ocean lovers who visit the National Oceanic and Atmospheric Administration’s (NOAA) National Marine Sanctuaries also will benefit from newly developed and installed accessible exhibits on local marine life. 

4. We are mobilizing resources to accelerate recovery for the travel and tourism industry  

The U.S. Department of Commerce’s Economic Development Administration invested $750 million from funding that was passed through the American Rescue Plan to support travel, tourism, and outdoor recreation communities hard hit by the pandemic. Today, funding is being invested in every state and territory across 185 awards, and communities are using these investments to rebuild the travel and tourism sector and create a more equitable, competitive, and resilient industry.   

5. We are working to make travel and tourism communities more resilient  

Today, federal funds are also being used to support communities across America as they enhance their capacity and ability to benefit from travel and tourism. One way we are making travel and tourism communities more resilient is by protecting coastal communities from the climate crisis through historic investments, including from the Inflation Reduction Act. These efforts include supporting rural and tribal communities by helping them to leverage the power of the growing outdoor recreation economy.  

These are just a few of many examples, and we hope for more good news in the new year. If you are interested in learning more, check out the National Travel and Tourism Strategy and the many other sectors of that drive the U.S. economy in the 2023 National Export Strategy . 

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Article contents

The role of tourism in sustainable development.

• Robert B. Richardson Robert B. Richardson Community Sustainability, Michigan State University
• https://doi.org/10.1093/acrefore/9780199389414.013.387
• Published online: 25 March 2021

Sustainable development is the foundational principle for enhancing human and economic development while maintaining the functional integrity of ecological and social systems that support regional economies. Tourism has played a critical role in sustainable development in many countries and regions around the world. In developing countries, tourism development has been used as an important strategy for increasing economic growth, alleviating poverty, creating jobs, and improving food security. Many developing countries are in regions that are characterized by high levels of biological diversity, natural resources, and cultural heritage sites that attract international tourists whose local purchases generate income and support employment and economic development. Tourism has been associated with the principles of sustainable development because of its potential to support environmental protection and livelihoods. However, the relationship between tourism and the environment is multifaceted, as some types of tourism have been associated with negative environmental impacts, many of which are borne by host communities.

The concept of sustainable tourism development emerged in contrast to mass tourism, which involves the participation of large numbers of people, often in structured or packaged tours. Mass tourism has been associated with economic leakage and dependence, along with negative environmental and social impacts. Sustainable tourism development has been promoted in various ways as a framing concept in contrast to these economic, environmental, and social impacts. Some literature has acknowledged a vagueness of the concept of sustainable tourism, which has been used to advocate for fundamentally different strategies for tourism development that may exacerbate existing conflicts between conservation and development paradigms. Tourism has played an important role in sustainable development in some countries through the development of alternative tourism models, including ecotourism, community-based tourism, pro-poor tourism, slow tourism, green tourism, and heritage tourism, among others that aim to enhance livelihoods, increase local economic growth, and provide for environmental protection. Although these models have been given significant attention among researchers, the extent of their implementation in tourism planning initiatives has been limited, superficial, or incomplete in many contexts.

The sustainability of tourism as a global system is disputed among scholars. Tourism is dependent on travel, and nearly all forms of transportation require the use of non-renewable resources such as fossil fuels for energy. The burning of fossil fuels for transportation generates emissions of greenhouse gases that contribute to global climate change, which is fundamentally unsustainable. Tourism is also vulnerable to both localized and global shocks. Studies of the vulnerability of tourism to localized shocks include the impacts of natural disasters, disease outbreaks, and civil unrest. Studies of the vulnerability of tourism to global shocks include the impacts of climate change, economic crisis, global public health pandemics, oil price shocks, and acts of terrorism. It is clear that tourism has contributed significantly to economic development globally, but its role in sustainable development is uncertain, debatable, and potentially contradictory.

• conservation
• economic development
• environmental impacts
• sustainable development
• sustainable tourism
• tourism development

Introduction

Sustainable development is the guiding principle for advancing human and economic development while maintaining the integrity of ecosystems and social systems on which the economy depends. It is also the foundation of the leading global framework for international cooperation—the 2030 Agenda for Sustainable Development and the Sustainable Development Goals (SDGs) (United Nations, 2015 ). The concept of sustainable development is often associated with the publication of Our Common Future (World Commission on Environment and Development [WCED], 1987 , p. 29), which defined it as “paths of human progress that meet the needs and aspirations of the present generation without compromising the ability of future generations to meet their needs.” Concerns about the environmental implications of economic development in lower income countries had been central to debates about development studies since the 1970s (Adams, 2009 ). The principles of sustainable development have come to dominate the development discourse, and the concept has become the primary development paradigm since the 1990s.

Tourism has played an increasingly important role in sustainable development since the 1990s, both globally and in particular countries and regions. For decades, tourism has been promoted as a low-impact, non-extractive option for economic development, particularly for developing countries (Gössling, 2000 ). Many developing countries have managed to increase their participation in the global economy through development of international tourism. Tourism development is increasingly viewed as an important tool in increasing economic growth, alleviating poverty, and improving food security. Tourism enables communities that are poor in material wealth, but rich in history and cultural heritage, to leverage their unique assets for economic development (Honey & Gilpin, 2009 ). More importantly, tourism offers an alternative to large-scale development projects, such as construction of dams, and to extractive industries such as mining and forestry, all of which contribute to emissions of pollutants and threaten biodiversity and the cultural values of Indigenous Peoples.

Environmental quality in destination areas is inextricably linked with tourism, as visiting natural areas and sightseeing are often the primary purpose of many leisure travels. Some forms of tourism, such as ecotourism, can contribute to the conservation of biodiversity and the protection of ecosystem functions in destination areas (Fennell, 2020 ; Gössling, 1999 ). Butler ( 1991 ) suggests that there is a kind of mutual dependence between tourism and the environment that should generate mutual benefits. Many developing countries are in regions that are characterized by high levels of species diversity, natural resources, and protected areas. Such ideas imply that tourism may be well aligned with the tenets of sustainable development.

However, the relationship between tourism and the environment is complex, as some forms of tourism have been associated with negative environmental impacts, including greenhouse gas emissions, freshwater use, land use, and food consumption (Butler, 1991 ; Gössling & Peeters, 2015 ; Hunter & Green, 1995 ; Vitousek et al., 1997 ). Assessments of the sustainability of tourism have highlighted several themes, including (a) parks, biodiversity, and conservation; (b) pollution and climate change; (c) prosperity, economic growth, and poverty alleviation; (d) peace, security, and safety; and (e) population stabilization and reduction (Buckley, 2012 ). From a global perspective, tourism contributes to (a) changes in land cover and land use; (b) energy use, (c) biotic exchange and extinction of wild species; (d) exchange and dispersion of diseases; and (e) changes in the perception and understanding of the environment (Gössling, 2002 ).

Research on tourism and the environment spans a wide range of social and natural science disciplines, and key contributions have been disseminated across many interdisciplinary fields, including biodiversity conservation, climate science, economics, and environmental science, among others (Buckley, 2011 ; Butler, 1991 ; Gössling, 2002 ; Lenzen et al., 2018 ). Given the global significance of the tourism sector and its environmental impacts, the role of tourism in sustainable development is an important topic of research in environmental science generally and in environmental economics and management specifically. Reviews of tourism research have highlighted future research priorities for sustainable development, including the role of tourism in the designation and expansion of protected areas; improvement in environmental accounting techniques that quantify environmental impacts; and the effects of individual perceptions of responsibility in addressing climate change (Buckley, 2012 ).

Tourism is one of the world’s largest industries, and it has linkages with many of the prime sectors of the global economy (Fennell, 2020 ). As a global economic sector, tourism represents one of the largest generators of wealth, and it is an important agent of economic growth and development (Garau-Vadell et al., 2018 ). Tourism is a critical industry in many local and national economies, and it represents a large and growing share of world trade (Hunter, 1995 ). Global tourism has had an average annual increase of 6.6% over the past half century, with international tourist arrivals rising sharply from 25.2 million in 1950 to more than 950 million in 2010 . In 2019 , the number of international tourists reached 1.5 billion, up 4% from 2018 (Fennell, 2020 ; United Nations World Tourism Organization [UNWTO], 2020 ). European countries are host to more than half of international tourists, but since 1990 , growth in international arrivals has risen faster than the global average, in both the Middle East and the Asia and Pacific region (UNWTO, 2020 ).

The growth in global tourism has been accompanied by an expansion of travel markets and a diversification of tourism destinations. In 1950 , the top five travel destinations were all countries in Europe and the Americas, and these destinations held 71% of the global travel market (Fennell, 2020 ). By 2002 , these countries represented only 35%, which underscores the emergence of newly accessible travel destinations in Africa, Asia, the Middle East, and the Pacific Rim, including numerous developing countries. Over the past 70 years, global tourism has grown significantly as an economic sector, and it has contributed to the economic development of dozens of nations.

Given the growth of international tourism and its emergence as one of the world’s largest export sectors, the question of its impact on economic growth for the host countries has been a topic of great interest in the tourism literature. Two hypotheses have emerged regarding the role of tourism in the economic growth process (Apergis & Payne, 2012 ). First, tourism-led growth hypothesis relies on the assumption that tourism is an engine of growth that generates spillovers and positive externalities through economic linkages that will impact the overall economy. Second, the economic-driven tourism growth hypothesis emphasizes policies oriented toward well-defined and enforceable property rights, stable political institutions, and adequate investment in both physical and human capital to facilitate the development of the tourism sector. Studies have concluded with support for both the tourism-led growth hypothesis (e.g., Durbarry, 2004 ; Katircioglu, 2010 ) and the economic-led growth hypothesis (e.g., Katircioglu, 2009 ; Oh, 2005 ), whereas other studies have found support for a bidirectional causality for tourism and economic growth (e.g., Apergis & Payne, 2012 ; Lee & Chang, 2008 ).

The growth of tourism has been marked by an increase in the competition for tourist expenditures, making it difficult for destinations to maintain their share of the international tourism market (Butler, 1991 ). Tourism development is cyclical and subject to short-term cycles and overconsumption of resources. Butler ( 1980 ) developed a tourist-area cycle of evolution that depicts the number of tourists rising sharply over time through periods of exploration, involvement, and development, before eventual consolidation and stagnation. When tourism growth exceeds the carrying capacity of the area, resource degradation can lead to the decline of tourism unless specific steps are taken to promote rejuvenation (Butler, 1980 , 1991 ).

The potential of tourism development as a tool to contribute to environmental conservation, economic growth, and poverty reduction is derived from several unique characteristics of the tourism system (UNWTO, 2002 ). First, tourism represents an opportunity for economic diversification, particularly in marginal areas with few other export options. Tourists are attracted to remote areas with high values of cultural, wildlife, and landscape assets. The cultural and natural heritage of developing countries is frequently based on such assets, and tourism represents an opportunity for income generation through the preservation of heritage values. Tourism is the only export sector where the consumer travels to the exporting country, which provides opportunities for lower-income households to become exporters through the sale of goods and services to foreign tourists. Tourism is also labor intensive; it provides small-scale employment opportunities, which also helps to promote gender equity. Finally, there are numerous indirect benefits of tourism for people living in poverty, including increased market access for remote areas through the development of roads, infrastructure, and communication networks. Nevertheless, travel is highly income elastic and carbon intensive, which has significant implications for the sustainability of the tourism sector (Lenzen et al., 2018 ).

Concerns about environmental issues appeared in tourism research just as global awareness of the environmental impacts of human activities was expanding. The United Nations Conference on the Human Environment was held in Stockholm in 1972 , the same year as the publication of The Limits to Growth (Meadows et al., 1972 ), which highlighted the concerns about the implications of exponential economic and population growth in a world of finite resources. This was the same year that the famous Blue Marble photograph of Earth was taken by the crew of the Apollo 17 spacecraft (Höhler, 2015 , p. 10), and the image captured the planet cloaked in the darkness of space and became a symbol of Earth’s fragility and vulnerability. As noted by Buckley ( 2012 ), tourism researchers turned their attention to social and environmental issues around the same time (Cohen, 1978 ; Farrell & McLellan, 1987 ; Turner & Ash, 1975 ; Young, 1973 ).

The notion of sustainable development is often associated with the publication of Our Common Future , the report of the World Commission on Environment and Development, also known as the Brundtland Commission (WCED, 1987 ). The report characterized sustainable development in terms of meeting “the needs of the present without compromising the ability of future generations to meet their own needs” (WCED, 1987 , p. 43). Four basic principles are fundamental to the concept of sustainability: (a) the idea of holistic planning and strategy making; (b) the importance of preserving essential ecological processes; (c) the need to protect both human heritage and biodiversity; and (d) the need to develop in such a way that productivity can be sustained over the long term for future generations (Bramwell & Lane, 1993 ). In addition to achieving balance between economic growth and the conservation of natural resources, there should be a balance of fairness and opportunity between the nations of the world.

Although the modern concept of sustainable development emerged with the publication of Our Common Future , sustainable development has its roots in ideas about sustainable forest management that were developed in Europe during the 17th and 18th centuries (Blewitt, 2015 ; Grober, 2007 ). Sustainable forest management is concerned with the stewardship and use of forests in a way that maintains their biodiversity, productivity, and regeneration capacity as well as their potential to fulfill society’s demands for forest products and benefits. Building on these ideas, Daly ( 1990 ) offered two operational principles of sustainable development. First, sustainable development implies that harvest rates should be no greater than rates of regeneration; this concept is known as maximum sustainable yield. Second, waste emission rates should not exceed the natural assimilative capacities of the ecosystems into which the wastes are emitted. Regenerative and assimilative capacities are characterized as natural capital, and a failure to maintain these capacities is not sustainable.

Shortly after the emergence of the concept of sustainable development in academic and policy discourse, tourism researchers began referring to the notion of sustainable tourism (May, 1991 ; Nash & Butler, 1990 ), which soon became the dominant paradigm of tourism development. The concept of sustainable tourism, as with the role of tourism in sustainable development, has been interpreted in different ways, and there is a lack of consensus concerning its meaning, objectives, and indicators (Sharpley, 2000 ). Growing interest in the subject inspired the creation of a new academic journal, Journal of Sustainable Tourism , which was launched in 1993 and has become a leading tourism journal. It is described as “an international journal that publishes research on tourism and sustainable development, including economic, social, cultural and political aspects.”

The notion of sustainable tourism development emerged in contrast to mass tourism, which is characterized by the participation of large numbers of people, often provided as structured or packaged tours. Mass tourism has risen sharply in the last half century. International arrivals alone have increased by an average annual rate of more than 25% since 1950 , and many of those trips involved mass tourism activities (Fennell, 2020 ; UNWTO, 2020 ). Some examples of mass tourism include beach resorts, cruise ship tourism, gaming casinos, golf resorts, group tours, ski resorts, theme parks, and wildlife safari tourism, among others. Little data exist regarding the volume of domestic mass tourism, but nevertheless mass tourism activities dominate the global tourism sector. Mass tourism has been shown to generate benefits to host countries, such as income and employment generation, although it has also been associated with economic leakage (where revenue generated by tourism is lost to other countries’ economies) and economic dependency (where developing countries are dependent on wealthier countries for tourists, imports, and foreign investment) (Cater, 1993 ; Conway & Timms, 2010 ; Khan, 1997 ; Peeters, 2012 ). Mass tourism has been associated with numerous negative environmental impacts and social impacts (Cater, 1993 ; Conway & Timms, 2010 ; Fennell, 2020 ; Ghimire, 2013 ; Gursoy et al., 2010 ; Liu, 2003 ; Peeters, 2012 ; Wheeller, 2007 ). Sustainable tourism development has been promoted in various ways as a framing concept in contrast to many of these economic, environmental, and social impacts.

Much of the early research on sustainable tourism focused on defining the concept, which has been the subject of vigorous debate (Bramwell & Lane, 1993 ; Garrod & Fyall, 1998 ; Hunter, 1995 ; Inskeep, 1991 ; Liu, 2003 ; Sharpley, 2000 ). Early definitions of sustainable tourism development seemed to fall in one of two categories (Sharpley, 2000 ). First, the “tourism-centric” paradigm of sustainable tourism development focuses on sustaining tourism as an economic activity (Hunter, 1995 ). Second, alternative paradigms have situated sustainable tourism in the context of wider sustainable development policies (Butler, 1991 ). One of the most comprehensive definitions of sustainable tourism echoes some of the language of the Brundtland Commission’s definition of sustainable development (WCED, 1987 ), emphasizing opportunities for the future while also integrating social and environmental concerns:

Sustainable tourism can be thought of as meeting the needs of present tourists and host regions while protecting and enhancing opportunity for the future. Sustainable tourism development is envisaged as leading to management of all resources in such a way that we can fulfill economic, social and aesthetic needs while maintaining cultural integrity, essential ecological processes, biological diversity and life support systems. (Inskeep, 1991 , p. 461)

Hunter argued that over the short and long terms, sustainable tourism development should

“meet the needs and wants of the local host community in terms of improved living standards and quality of life;

satisfy the demands of tourists and the tourism industry, and continue to attract them in order to meet the first aim; and

safeguard the environmental resource base for tourism, encompassing natural, built and cultural components, in order to achieve both of the preceding aims.” (Hunter, 1995 , p. 156)

Numerous other definitions have been documented, and the term itself has been subject to widespread critique (Buckley, 2012 ; Hunter, 1995 ; Liu, 2003 ). Nevertheless, there have been numerous calls to move beyond debate about a definition and to consider how it may best be implemented in practice (Garrod & Fyall, 1998 ; Liu, 2003 ). Cater ( 1993 ) identified three key criteria for sustainable tourism: (a) meeting the needs of the host population in terms of improved living standards both in the short and long terms; (b) satisfying the demands of a growing number of tourists; and (c) safeguarding the natural environment in order to achieve both of the preceding aims.

Some literature has acknowledged a vagueness of the concept of sustainable tourism, which has been used to advocate for fundamentally different strategies for tourism development that may exacerbate existing conflicts between conservation and development paradigms (Garrod & Fyall, 1998 ; Hunter, 1995 ; Liu, 2003 ; McKercher, 1993b ). Similar criticisms have been leveled at the concept of sustainable development, which has been described as an oxymoron with a wide range of meanings (Adams, 2009 ; Daly, 1990 ) and “defined in such a way as to be either morally repugnant or logically redundant” (Beckerman, 1994 , p. 192). Sharpley ( 2000 ) suggests that in the tourism literature, there has been “a consistent and fundamental failure to build a theoretical link between sustainable tourism and its parental paradigm,” sustainable development (p. 2). Hunter ( 1995 ) suggests that practical measures designed to operationalize sustainable tourism fail to address many of the critical issues that are central to the concept of sustainable development generally and may even actually counteract the fundamental requirements of sustainable development. He suggests that mainstream sustainable tourism development is concerned with protecting the immediate resource base that will sustain tourism development while ignoring concerns for the status of the wider tourism resource base, such as potential problems associated with air pollution, congestion, introduction of invasive species, and declining oil reserves. The dominant paradigm of sustainable tourism development has been described as introverted, tourism-centric, and in competition with other sectors for scarce resources (McKercher, 1993a ). Hunter ( 1995 , p. 156) proposes an alternative, “extraparochial” paradigm where sustainable tourism development is reconceptualized in terms of its contribution to overall sustainable development. Such a paradigm would reconsider the scope, scale, and sectoral context of tourism-related resource utilization issues.

“Sustainability,” “sustainable tourism,” and “sustainable development” are all well-established terms that have often been used loosely and interchangeably in the tourism literature (Liu, 2003 ). Nevertheless, the subject of sustainable tourism has been given considerable attention and has been the focus of numerous academic compilations and textbooks (Coccossis & Nijkamp, 1995 ; Hall & Lew, 1998 ; Stabler, 1997 ; Swarbrooke, 1999 ), and it calls for new approaches to sustainable tourism development (Bramwell & Lane, 1993 ; Garrod & Fyall, 1998 ; Hunter, 1995 ; Sharpley, 2000 ). The notion of sustainable tourism has been reconceptualized in the literature by several authors who provided alternative frameworks for tourism development (Buckley, 2012 ; Gössling, 2002 ; Hunter, 1995 ; Liu, 2003 ; McKercher, 1993b ; Sharpley, 2000 ).

Early research in sustainable tourism focused on the local environmental impacts of tourism, including energy use, water use, food consumption, and change in land use (Buckley, 2012 ; Butler, 1991 ; Gössling, 2002 ; Hunter & Green, 1995 ). Subsequent research has emphasized the global environmental impacts of tourism, such as greenhouse gas emissions and biodiversity losses (Gössling, 2002 ; Gössling & Peeters, 2015 ; Lenzen et al., 2018 ). Additional research has emphasized the impacts of environmental change on tourism itself, including the impacts of climate change on tourist behavior (Gössling et al., 2012 ; Richardson & Loomis, 2004 ; Scott et al., 2012 ; Viner, 2006 ). Countries that are dependent on tourism for economic growth may be particularly vulnerable to the impacts of climate change (Richardson & Witkoswki, 2010 ).

The early focus on environmental issues in sustainable tourism has been broadened to include economic, social, and cultural issues as well as questions of power and equity in society (Bramwell & Lane, 1993 ; Sharpley, 2014 ), and some of these frameworks have integrated notions of social equity, prosperity, and cultural heritage values. Sustainable tourism is dependent on critical long-term considerations of the impacts; notions of equity; an appreciation of the importance of linkages (i.e., economic, social, and environmental); and the facilitation of cooperation and collaboration between different stakeholders (Elliott & Neirotti, 2008 ).

McKercher ( 1993b ) notes that tourism resources are typically part of the public domain or are intrinsically linked to the social fabric of the host community. As a result, many commonplace tourist activities such as sightseeing may be perceived as invasive by members of the host community. Many social impacts of tourism can be linked to the overuse of the resource base, increases in traffic congestion, rising land prices, urban sprawl, and changes in the social structure of host communities. Given the importance of tourist–resident interaction, sustainable tourism development depends in part on the support of the host community (Garau-Vadell et al., 2018 ).

Tourism planning involves the dual objectives of optimizing the well-being of local residents in host communities and minimizing the costs of tourism development (Sharpley, 2014 ). Tourism researchers have paid significant attention to examining the social impacts of tourism in general and to understanding host communities’ perceptions of tourism in particular. Studies of the social impacts of tourism development have examined the perceptions of local residents and the effects of tourism on social cohesion, traditional lifestyles, and the erosion of cultural heritage, particularly among Indigenous Peoples (Butler & Hinch, 2007 ; Deery et al., 2012 ; Mathieson & Wall, 1982 ; Sharpley, 2014 ; Whitford & Ruhanen, 2016 ).

Alternative Tourism and Sustainable Development

A wide body of published research is related to the role of tourism in sustainable development, and much of the literature involves case studies of particular types of tourism. Many such studies contrast types of alternative tourism with those of mass tourism, which has received sustained criticism for decades and is widely considered to be unsustainable (Cater, 1993 ; Conway & Timms, 2010 ; Fennell, 2020 ; Gursoy et al., 2010 ; Liu, 2003 ; Peeters, 2012 ; Zapata et al., 2011 ). Still, some tourism researchers have taken issue with the conclusion that mass tourism is inherently unsustainable (Sharpley, 2000 ; Weaver, 2007 ), and some have argued for developing pathways to “sustainable mass tourism” as “the desired and impending outcome for most destinations” (Weaver, 2012 , p. 1030). In integrating an ethical component to mass tourism development, Weaver ( 2014 , p. 131) suggests that the desirable outcome is “enlightened mass tourism.” Such suggestions have been contested in the literature and criticized for dubious assumptions about emergent norms of sustainability and support for growth, which are widely seen as contradictory (Peeters, 2012 ; Wheeller, 2007 ).

Models of responsible or alternative tourism development include ecotourism, community-based tourism, pro-poor tourism, slow tourism, green tourism, and heritage tourism, among others. Most models of alternative tourism development emphasize themes that aim to counteract the perceived negative impacts of conventional or mass tourism. As such, the objectives of these models of tourism development tend to focus on minimizing environmental impacts, supporting biodiversity conservation, empowering local communities, alleviating poverty, and engendering pleasant relationships between tourists and residents.

Approaches to alternative tourism development tend to overlap with themes of responsible tourism, and the two terms are frequently used interchangeably. Responsible tourism has been characterized in terms of numerous elements, including

ensuring that communities are involved in and benefit from tourism;

respecting local, natural, and cultural environments;

involving the local community in planning and decision-making;

using local resources sustainably;

behaving in ways that are sensitive to the host culture;

maintaining and encouraging natural, economic, and cultural diversity; and

assessing environmental, social, and economic impacts as a prerequisite to tourism development (Spenceley, 2012 ).

Hetzer ( 1965 ) identified four fundamental principles or perquisites for a more responsible form of tourism: (a) minimum environmental impact; (b) minimum impact on and maximum respect for host cultures; (c) maximum economic benefits to the host country; and (d) maximum leisure satisfaction to participating tourists.

The history of ecotourism is closely connected with the emergence of sustainable development, as it was born out of a concern for the conservation of biodiversity. Ecotourism is a form of tourism that aims to minimize local environmental impacts while bringing benefits to protected areas and the people living around those lands (Honey, 2008 ). Ecotourism represents a small segment of nature-based tourism, which is understood as tourism based on the natural attractions of an area, such as scenic areas and wildlife (Gössling, 1999 ). The ecotourism movement gained momentum in the 1990s, primarily in developing countries in Latin America and sub-Saharan Africa, and nearly all countries are now engaged in some form of ecotourism. In some communities, ecotourism is the primary economic activity and source of income and economic development.

The term “ecotourism” was coined by Hector Ceballos-Lascuráin and defined by him as “tourism that consists in travelling to relatively undisturbed or uncontaminated natural areas with the specific object of studying, admiring, and enjoying the scenery and its wild plants and animals” (Ceballos-Lascuráin, 1987 , p. 13). In discussing ecotourism resources, he also made reference to “any existing cultural manifestations (both past and present) found in these areas” (Ceballos-Lascuráin, 1987 , p. 14). The basic precepts of ecotourism had been discussed long before the actual use of the term. Twenty years earlier, Hetzer ( 1965 ) referred to a form of tourism “based principally upon natural and archaeological resources such as caves, fossil sites (and) archaeological sites.” Thus, both natural resources and cultural resources were integrated into ecotourism frameworks from the earliest manifestations.

Costa Rica is well known for having successfully integrated ecotourism in its overall strategy for sustainable development, and numerous case studies of ecotourism in Costa Rica appear in the literature (Chase et al., 1998 ; Fennell & Eagles, 1990 ; Gray & Campbell, 2007 ; Hearne & Salinas, 2002 ). Ecotourism in Costa Rica has been seen as having supported the economic development of the country while promoting biodiversity conservation in its extensive network of protected areas. Chase et al. ( 1998 ) estimated the demand for ecotourism in a study of differential pricing of entrance fees at national parks in Costa Rica. The authors estimated elasticities associated with the own-price, cross-price, and income variables and found that the elasticities of demand were significantly different between three different national park sites. The results reveal the heterogeneity characterizing tourist behavior and park attractions and amenities. Hearne and Salinas ( 2002 ) used choice experiments to examine the preferences of domestic and foreign tourists in Costa Rica in an ecotourism site. Both sets of tourists demonstrated a preference for improved infrastructure, more information, and lower entrance fees. Foreign tourists demonstrated relatively stronger preferences for the inclusion of restrictions in the access to some trails.

Ecotourism has also been studied extensively in Kenya (Southgate, 2006 ), Malaysia (Lian Chan & Baum, 2007 ), Nepal (Baral et al., 2008 ), Peru (Stronza, 2007 ), and Taiwan (Lai & Nepal, 2006 ), among many other countries. Numerous case studies have demonstrated the potential for ecotourism to contribute to sustainable development by providing support for biodiversity conservation, local livelihoods, and regional development.

Community-Based Tourism

Community-based tourism (CBT) is a model of tourism development that emphasizes the development of local communities and allows for local residents to have substantial control over its development and management, and a major proportion of the benefits remain within the community. CBT emerged during the 1970s as a response to the negative impacts of the international mass tourism development model (Cater, 1993 ; Hall & Lew, 2009 ; Turner & Ash, 1975 ; Zapata et al., 2011 ).

Community-based tourism has been examined for its potential to contribute to poverty reduction. In a study of the viability of the CBT model to support socioeconomic development and poverty alleviation in Nicaragua, tourism was perceived by participants in the study to have an impact on employment creation in their communities (Zapata et al., 2011 ). Tourism was seen to have had positive impacts on strengthening local knowledge and skills, particularly on the integration of women to new roles in the labor market. One of the main perceived gains regarding the environment was the process of raising awareness regarding the conservation of natural resources. The small scale of CBT operations and low capacity to accommodate visitors was seen as a limitation of the model.

Spenceley ( 2012 ) compiled case studies of community-based tourism in countries in southern Africa, including Botswana, Madagascar, Namibia, South Africa, Tanzania, Zambia, and Zimbabwe. In this volume, authors characterize community-based and nature-based tourism development projects in the region and demonstrate how community participation in planning and decision-making has generated benefits for local residents and supported conservation initiatives. They contend that responsible tourism practices are of particular importance in the region because of the rich biological diversity, abundant charismatic wildlife, and the critical need for local economic development and livelihood strategies.

In Kenya, CBT enterprises were not perceived to have made a significant impact on poverty reduction at an individual household level, in part because the model relied heavily on donor funding, reinforcing dependency and poverty (Manyara & Jones, 2007 ). The study identified several critical success factors for CBT enterprises, namely, awareness and sensitization, community empowerment, effective leadership, and community capacity building, which can inform appropriate tourism policy formulation in Kenya. The impacts of CBT on economic development and poverty reduction would be greatly enhanced if tourism initiatives were able to emphasize independence, address local community priorities, enhance community empowerment and transparency, discourage elitism, promote effective community leadership, and develop community capacity to operate their own enterprises more efficiently.

Pro-Poor Tourism

Pro-poor tourism is a model of tourism development that brings net benefits to people living in poverty (Ashley et al., 2001 ; Harrison, 2008 ). Although its theoretical foundations and development objectives overlap to some degree with those of community-based tourism and other models of AT, the key distinctive feature of pro-poor tourism is that it places poor people and poverty at the top of the agenda. By focusing on a very simple and incontrovertibly moral idea, namely, the net benefits of tourism to impoverished people, the concept has broad appeal to donors and international aid agencies. Harnessing the economic benefits of tourism for pro-poor growth means capitalizing on the advantages while reducing negative impacts to people living in poverty (Ashley et al., 2001 ). Pro-poor approaches to tourism development include increasing access of impoverished people to economic benefits; addressing negative social and environmental impacts associated with tourism; and focusing on policies, processes, and partnerships that seek to remove barriers to participation by people living in poverty. At the local level, pro-poor tourism can play a very significant role in livelihood security and poverty reduction (Ashley & Roe, 2002 ).

Rogerson ( 2011 ) argues that the growth of pro-poor tourism initiatives in South Africa suggests that the country has become a laboratory for the testing and evolution of new approaches toward sustainable development planning that potentially will have relevance for other countries in the developing world. A study of pro-poor tourism development initiatives in Laos identified a number of favorable conditions for pro-poor tourism development, including the fact that local people are open to tourism and motivated to participate (Suntikul et al., 2009 ). The authors also noted a lack of development in the linkages that could optimize the fulfilment of the pro-poor agenda, such as training or facilitation of local people’s participation in pro-poor tourism development at the grassroots level.

Critics of the model have argued that pro-poor tourism is based on an acceptance of the status quo of existing capitalism, that it is morally indiscriminate and theoretically imprecise, and that its practitioners are academically and commercially marginal (Harrison, 2008 ). As Chok et al. ( 2007 ) indicate, the focus “on poor people in the South reflects a strong anthropocentric view . . . and . . . environmental benefits are secondary to poor peoples’” benefits (p. 153).

Harrison ( 2008 ) argues that pro-poor tourism is not a distinctive approach to tourism as a development tool and that it may be easier to discuss what pro-poor tourism is not than what it is. He concludes that it is neither anticapitalist nor inconsistent with mainstream tourism on which it relies; it is neither a theory nor a model and is not a niche form of tourism. Further, he argues that it has no distinctive method and is not only about people living in poverty.

Slow Tourism

The concept of slow tourism has emerged as a model of sustainable tourism development, and as such, it lacks an exact definition. The concept of slow tourism traces its origin back to some institutionalized social movements such as “slow food” and “slow cities” that began in Italy in the 1990s and spread rapidly around the world (Fullagar et al., 2012 ; Oh et al., 2016 , p. 205). Advocates of slow tourism tend to emphasize slowness in terms of speed, mobility, and modes of transportation that generate less environmental pollution. They propose niche marketing for alternative forms of tourism that focus on quality upgrading rather than merely increasing the quantity of visitors via the established mass-tourism infrastructure (Conway & Timms, 2010 ).

In the context of the Caribbean region, slow tourism has been promoted as more culturally sensitive and authentic, as compared to the dominant mass tourism development model that is based on all-inclusive beach resorts dependent on foreign investment (Conway & Timms, 2010 ). Recognizing its value as an alternative marketing strategy, Conway and Timms ( 2010 ) make the case for rebranding alternative tourism in the Caribbean as a means of revitalizing the sector for the changing demands of tourists in the 21st century . They suggest that slow tourism is the antithesis of mass tourism, which “relies on increasing the quantity of tourists who move through the system with little regard to either the quality of the tourists’ experience or the benefits that accrue to the localities the tourist visits” (Conway & Timms, 2010 , p. 332). The authors draw on cases from Barbados, the Grenadines, Jamaica, and Trinidad and Tobago to characterize models of slow tourism development in remote fishing villages and communities near nature preserves and sea turtle nesting sites.

Although there is a growing interest in the concept of slow tourism in the literature, there seems to be little agreement about the exact nature of slow tourism and whether it is a niche form of special interest tourism or whether it represents a more fundamental potential shift across the industry. Conway and Timms ( 2010 ) focus on the destination, advocating for slow tourism in terms of a promotional identity for an industry in need of rebranding. Caffyn ( 2012 , p. 77) discusses the implementation of slow tourism in terms of “encouraging visitors to make slower choices when planning and enjoying their holidays.” It is not clear whether slow tourism is a marketing strategy, a mindset, or a social movement, but the literature on slow tourism nearly always equates the term with sustainable tourism (Caffyn, 2012 ; Conway & Timms, 2010 ; Oh et al., 2016 ). Caffyn ( 2012 , p. 80) suggests that slow tourism could offer a “win–win,” which she describes as “a more sustainable form of tourism; keeping more of the economic benefits within the local community and destination; and delivering a more meaningful and satisfying experience.” Research on slow tourism is nascent, and thus the contribution of slow tourism to sustainable development is not well understood.

Impacts of Tourism Development

The role of tourism in sustainable development can be examined through an understanding of the economic, environmental, and social impacts of tourism. Tourism is a global phenomenon that involves travel, recreation, the consumption of food, overnight accommodations, entertainment, sightseeing, and other activities that simultaneously intersect the lives of local residents, businesses, and communities. The impacts of tourism involve benefits and costs to all groups, and some of these impacts cannot easily be measured. Nevertheless, they have been studied extensively in the literature, which provides some context for how these benefits and costs are distributed.

Economic Impacts of Tourism

The travel and tourism sector is one of the largest components of the global economy, and global tourism has increased exponentially since the end of the Second World War (UNWTO, 2020 ). The direct, indirect, and induced economic impact of global travel accounted for 8.9 trillion U.S. dollars in contribution to the global gross domestic product (GDP), or 10.3% of global GDP. The global travel and tourism sector supports approximately 330 million jobs, or 1 in 10 jobs around the world. From an economic perspective, tourism plays a significant role in sustainable development. In many developing countries, tourism has the potential to play a unique role in income generation and distribution relative to many other industries, in part because of its high multiplier effect and consumption of local goods and services. However, research on the economic impacts of tourism has shown that this potential has rarely been fully realized (Liu, 2003 ).

Numerous studies have examined the impact of tourism expenditure on GDP, income, employment, and public sector revenue. Narayan ( 2004 ) used a computable general equilibrium model to estimate the economic impact of tourism growth on the economy of Fiji. Tourism is Fiji’s largest industry, with average annual growth of 10–12%; and as a middle-income country, tourism is critical to Fiji’s economic development. The findings indicate that an increase in tourism expenditures was associated with an increase in GDP, an improvement in the country’s balance of payments, and an increase in real consumption and national welfare. Evidence suggests that the benefits of tourism expansion outweigh any export effects caused by an appreciation of the exchange rate and an increase in domestic prices and wages.

Seetanah ( 2011 ) examined the potential contribution of tourism to economic growth and development using panel data of 19 island economies around the world from 1990 to 2007 and revealed that tourism development is an important factor in explaining economic performance in the selected island economies. The results have policy implications for improving economic growth by harnessing the contribution of the tourism sector. Pratt ( 2015 ) modeled the economic impact of tourism for seven small island developing states in the Pacific, the Caribbean, and the Indian Ocean. In most states, the transportation sector was found to have above-average linkages to other sectors of the economy. The results revealed some advantages of economies of scale for maximizing the economic contribution of tourism.

Apergis and Payne ( 2012 ) examined the causal relationship between tourism and economic growth for a panel of nine Caribbean countries. The panel of Caribbean countries includes Antigua and Barbuda, Bahamas, Dominica, Dominican Republic, Grenada, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, and Trinidad and Tobago. The authors use a panel error correction model to reveal bidirectional causality between tourism and economic growth in both the short run and the long run. The presence of bidirectional causality reiterates the importance of the tourism sector in the generation of foreign exchange income and in financing the production of goods and services within these countries. Likewise, stable political institutions and adequate government policies to ensure the appropriate investment in physical and human capital will enhance economic growth. In turn, stable economic growth will provide the resources needed to develop the tourism infrastructure for the success of the countries’ tourism sector. Thus, policy makers should be cognizant of the interdependent relationship between tourism and economic growth in the design and implementation of economic policy. The mixed nature of these results suggest that the relationship between tourism and economic growth depends largely on the social and economic context as well as the role of tourism in the economy.

The economic benefits and costs of tourism are frequently distributed unevenly. An analysis of the impact of wildlife conservation policies in Zambia on household welfare found that households located near national parks earn higher levels of income from wage employment and self-employment than other rural households in the country, but they were also more likely to suffer crop losses related to wildlife conflicts (Richardson et al., 2012 ). The findings suggest that tourism development and wildlife conservation can contribute to pro-poor development, but they may be sustainable only if human–wildlife conflicts are minimized or compensated.

Environmental Impacts of Tourism

The environmental impacts of tourism are significant, ranging from local effects to contributions to global environmental change (Gössling & Peeters, 2015 ). Tourism is both dependent on water resources and a factor in global and local freshwater use. Tourists consume water for drinking, when showering and using the toilet, when participating in activities such as winter ski tourism (i.e., snowmaking), and when using swimming pools and spas. Fresh water is also needed to maintain hotel gardens and golf courses, and water use is embedded in tourism infrastructure development (e.g., accommodations, laundry, dining) and in food and fuel production. Direct water consumption in tourism is estimated to be approximately 350 liters (L) per guest night for accommodation; when indirect water use from food, energy, and transport are considered, total water use in tourism is estimated to be approximately 6,575 L per guest night, or 27,800 L per person per trip (Gössling & Peeters, 2015 ). In addition, tourism contributes to the pollution of oceans as well as lakes, rivers, and other freshwater systems (Gössling, 2002 ; Gössling et al., 2011 ).

The clearing and conversion of land is central for tourism development, and in many cases, the land used for tourism includes roads, airports, railways, accommodations, trails, pedestrian walks, shopping areas, parking areas, campgrounds, vacation homes, golf courses, marinas, ski resorts, and indirect land use for food production, disposal of solid wastes, and the treatment of wastewater (Gössling & Peeters, 2015 ). Global land use for accommodation is estimated to be approximately 42 m 2 per bed. Total global land use for tourism is estimated to be nearly 62,000 km 2 , or 11.7 m 2 per tourist; more than half of this estimate is represented by land use for traffic infrastructure.

Tourism and hospitality have direct and indirect links to nearly all aspects of food production, preparation, and consumption because of the quantities of food consumed in tourism contexts (Gössling et al., 2011 ). Food production has significant implications for sustainable development, given the growing global demand for food. The implications include land conversion, losses to biodiversity, changes in nutrient cycling, and contributions to greenhouse emissions that are associated with global climate change (Vitousek et al., 1997 ). Global food use for tourism is estimated to be approximately 39.4 megatons 1 (Mt), about 38% than the amount of food consumed at home. This equates to approximately 1,800 grams (g) of food consumed per tourist per day.

Although tourism has been promoted as a low-impact, nonextractive option for economic development, (Gössling, 2000 ), assessments reveal that such pursuits have a significant carbon footprint, as tourism is significantly more carbon intensive than other potential areas of economic development (Lenzen et al., 2018 ). Tourism is dependent on energy, and virtually all energy use in the tourism sector is derived from fossil fuels, which contribute to global greenhouse emissions that are associated with global climate change. Energy use for tourism has been estimated to be approximately 3,575 megajoules 2 (MJ) per trip, including energy for travel and accommodations (Gössling & Peeters, 2015 ). A previous estimate of global carbon dioxide (CO 2 ) emissions from tourism provided values of 1.12 gigatons 3 (Gt) of CO 2 , amounting to about 3% of global CO 2 -equivalent (CO 2 e) emissions (Gössling & Peeters, 2015 ). However, these analyses do not cover the supply chains underpinning tourism and do not therefore represent true carbon footprints. A more complete analysis of the emissions from energy consumption necessary to sustain the tourism sector would include food and beverages, infrastructure construction and maintenance, retail, and financial services. Between 2009 and 2013 , tourism’s global carbon footprint is estimated to have increased from 3.9 to 4.5 GtCO 2 e, four times more than previously estimated, accounting for about 8% of global greenhouse gas emissions (Lenzen et al., 2018 ). The majority of this footprint is exerted by and within high-income countries. The rising global demand for tourism is outstripping efforts at decarbonization of tourism operations and as a result is accelerating global carbon emissions.

Social Impacts of Tourism

The social impacts of tourism have been widely studied, with an emphasis on residents’ perceptions in the host community (Sharpley, 2014 ). Case studies include research conducted in Australia (Faulkner & Tideswell, 1997 ; Gursoy et al., 2010 ; Tovar & Lockwood, 2008 ), Belize (Diedrich & Garcia-Buades, 2008 ), China (Gu & Ryan, 2008 ), Fiji (King et al., 1993 ), Greece (Haralambopoulos & Pizam, 1996 ; Tsartas, 1992 ), Hungary (Rátz, 2000 ), Thailand (Huttasin, 2008 ), Turkey (Kuvan & Akan, 2005 ), the United Kingdom (Brunt & Courtney, 1999 ; Haley et al., 2005 ), and the United States (Andereck et al., 2005 ; Milman & Pizam, 1988 ), among others. The social impacts of tourism are difficult to measure, and most published studies are mainly concerned with the social impacts on the host communities rather than the impacts on the tourists themselves.

Studies of residents’ perceptions of tourism are typically conducted using household surveys. In most cases, residents recognize the economic dependence on tourism for income, and there is substantial evidence to suggest that working in or owning a business in tourism or a related industry is associated with more positive perceptions of tourism (Andereck et al., 2007 ). The perceived nature of negative effects is complex and often conveys a dislike of crowding, traffic congestion, and higher prices for basic needs (Deery et al., 2012 ). When the number of tourists far exceeds that of the resident population, negative attitudes toward tourism may manifest (Diedrich & Garcia-Buades, 2008 ). However, residents who recognize negative impacts may not necessarily oppose tourism development (King et al., 1993 ).

In some regions, little is known about the social and cultural impacts of tourism despite its dominance as an economic sector. Tourism is a rapidly growing sector in Cuba, and it is projected to grow at rates that exceed the average projected growth rates for the Caribbean and the world overall (Salinas et al., 2018 ). Still, even though there has been rapid tourism development in Cuba, there has been little research related to the environmental and sociocultural impacts of this tourism growth (Rutty & Richardson, 2019 ).

In some international tourism contexts, studies have found that residents are generally resentful toward tourism because it fuels inequality and exacerbates racist attitudes and discrimination (Cabezas, 2004 ; Jamal & Camargo, 2014 ; Mbaiwa, 2005 ). Other studies revealed similar narratives and recorded statements of exclusion and socioeconomic stratification (Sanchez & Adams, 2008 ). Local residents often must navigate the gaps in the racialized, gendered, and sexualized structures imposed by the global tourism industry and host-country governments (Cabezas, 2004 ).

However, during times of economic crisis, residents may develop a more permissive view as their perceptions of the costs of tourism development decrease (Garau-Vadell et al., 2018 ). This increased positive attitude is not based on an increase in the perception of positive impacts of tourism, but rather on a decrease in the perception of the negative impacts.

There is a growing body of research on Indigenous and Aboriginal tourism that emphasizes justice issues such as human rights and self-empowerment, control, and participation of traditional owners in comanagement of destinations (Jamal & Camargo, 2014 ; Ryan & Huyton, 2000 ; Whyte, 2010 ).

Sustainability of Tourism

A process or system is said to be sustainable to the extent that it is robust, resilient, and adaptive (Anderies et al., 2013 ). By most measures, the global tourism system does not meet these criteria for sustainability. Tourism is not robust in that it cannot resist threats and perturbations, such as economic shocks, public health pandemics, war, and other disruptions. Tourism is not resilient in that it does not easily recover from failures, such as natural disasters or civil unrest. Furthermore, tourism is not adaptive in that it is often unable to change in response to external conditions. One example that underscores the failure to meet all three criteria is the dependence of tourism on fossil fuels for transportation and energy, which are key inputs for tourism development. This dependence itself is not sustainable (Wheeller, 2007 ), and thus the sustainability of tourism is questionable.

Liu ( 2003 ) notes that research related to the role of tourism in sustainable development has emphasized supply-side concepts such as sustaining tourism resources and ignored the demand side, which is particularly vulnerable to social and economic shocks. Tourism is vulnerable to both localized and global shocks. Studies of the vulnerability of tourism to localized shocks include disaster vulnerability in coastal Thailand (Calgaro & Lloyd, 2008 ), bushfires in northeast Victoria in Australia (Cioccio & Michael, 2007 ), forest fires in British Columbia, Canada (Hystad & Keller, 2008 ); and outbreak of foot and mouth disease in the United Kingdom (Miller & Ritchie, 2003 ).

Like most other economic sectors, tourism is vulnerable to the impacts of earthquakes, particularly in areas where tourism infrastructure may not be resilient to such shocks. Numerous studies have examined the impacts of earthquake events on tourism, including studies of the aftermath of the 1997 earthquake in central Italy (Mazzocchi & Montini, 2001 ), the 1999 earthquake in Taiwan (Huan et al., 2004 ; Huang & Min, 2002 ), and the 2008 Wenchuan earthquake in western Sichuan, China (Yang et al., 2011 ), among others.

Tourism is vulnerable to extreme weather events. Regional economic strength has been found to be associated with lower vulnerability to natural disasters. Kim and Marcoullier ( 2015 ) examined the vulnerability and resilience of 10 tourism-based regional economies that included U.S. national parks or protected seashores situated on the Gulf of Mexico or Atlantic Ocean coastline that were affected by several hurricanes over a 26-year period. Regions with stronger economic characteristics prior to natural disasters were found to have lower disaster losses than regions with weaker economies.

Tourism is extremely sensitive to oil spills, whatever their origin, and the volume of oil released need not be large to generate significant economic losses (Cirer-Costa, 2015 ). Studies of the vulnerability of tourism to the localized shock of an oil spill include research on the impacts of oil spills in Alaska (Coddington, 2015 ), Brazil (Ribeiro et al., 2020 ), Spain (Castanedo et al., 2009 ), affected regions in the United States along the Gulf of Mexico (Pennington-Gray et al., 2011 ; Ritchie et al., 2013 ), and the Republic of Korea (Cheong, 2012 ), among others. Future research on the vulnerability of tourist destinations to oil spills should also incorporate freshwater environments, such as lakes, rivers, and streams, where the rupture of oil pipelines is more frequent.

Significant attention has been paid to assessing the vulnerability of tourist destinations to acts of terrorism and the impacts of terrorist attacks on regional tourist economies (Liu & Pratt, 2017 ). Such studies include analyses of the impacts of terrorist attacks on three European countries, Greece, Italy, and Austria (Enders et al., 1992 ); the impact of the 2001 terrorist attacks on the United States (Goodrich, 2002 ); terrorism and tourism in Nepal (Bhattarai et al., 2005 ); vulnerability of tourism livelihoods in Bali (Baker & Coulter, 2007 ); the impact of terrorism on tourist preferences for destinations in the Mediterranean and the Canary Islands (Arana & León, 2008 ); the 2011 massacres in Olso and Utøya, Norway (Wolff & Larsen, 2014 ); terrorism and political violence in Tunisia (Lanouar & Goaied, 2019 ); and the impact of terrorism on European tourism (Corbet et al., 2019 ), among others. Pizam and Fleischer ( 2002 ) studied the impact of acts of terrorism on tourism demand in Israel between May 1991 and May 2001 , and they confirmed that the frequency of acts of terrorism had caused a larger decline in international tourist arrivals than the severity of these acts. Most of these are ex post studies, and future assessments of the underlying conditions of destinations could reveal a deeper understanding of the vulnerability of tourism to terrorism.

Tourism is vulnerable to economic crisis, both local economic shocks (Okumus & Karamustafa, 2005 ; Stylidis & Terzidou, 2014 ) and global economic crisis (Papatheodorou et al., 2010 ; Smeral, 2010 ). Okumus and Karamustafa ( 2005 ) evaluated the impact of the February 2001 economic crisis in Turkey on tourism, and they found that the tourism industry was poorly prepared for the economic crisis despite having suffered previous impacts related to the Gulf War in the early 1990s, terrorism in Turkey in the 1990s, the civil war in former Yugoslavia in the early 1990s, an internal economic crisis in 1994 , and two earthquakes in the northwest region of Turkey in 1999 . In a study of the attitudes and perceptions of citizens of Greece, Stylidis and Terzidou ( 2014 ) found that economic crisis is associated with increased support for tourism development, particularly out of self-interest. Economic crisis diminishes residents’ concern for environmental issues. In a study of the behavior of European tourists amid an economic crisis, Eugenio-Martin and Campos-Soria ( 2014 ) found that the probability of households cutting back on travel expenditures depends largely on the climate and economic conditions of tourists’ home countries, and households that do reduce travel spending engage in tourism closer to home.

Becken and Lennox ( 2012 ) studied the implications of a long-term increase in oil prices for tourism in New Zealand, and they estimate that a doubling of oil prices is associated with a 1.7% decrease in real gross national disposable income and a 9% reduction in the real value of tourism exports. Chatziantoniou et al. ( 2013 ) investigated the relationship among oil price shocks, tourism variables, and economic indicators in four European Mediterranean countries and found that aggregate demand oil price shocks generated a lagged effect on tourism-generated income and economic growth. Kisswani et al. ( 2020 ) examined the asymmetric effect of oil prices on tourism receipts and the sensitive susceptibility of tourism to oil price changes using nonlinear analysis. The findings document a long-run asymmetrical effect for most countries, after incorporating the structural breaks, suggesting that governments and tourism businesses and organizations should interpret oil price fluctuations cautiously.

Finally, the sustainability of tourism has been shown to be vulnerable to the outbreak of infectious diseases, including the impact of the Ebola virus on tourism in sub-Saharan Africa (Maphanga & Henama, 2019 ; Novelli et al., 2018 ) and in the United States (Cahyanto et al., 2016 ). The literature also includes studies of the impact of swine flu on tourism demand in Brunei (Haque & Haque, 2018 ), Mexico (Monterrubio, 2010 ), and the United Kingdom (Page et al., 2012 ), among others. In addition, rapid assessments of the impacts of the novel coronavirus SARS-CoV-2 have documented severe disruptions and cessations of tourism because of unprecedented global travel restrictions and widespread restrictions on public gatherings (Gössling et al., 2020 ; Qiu et al., 2020 ; Sharma & Nicolau, 2020 ). Hotels, airlines, cruise lines, and car rentals have all experienced a significant decrease globally because of the COVID-19 pandemic, and the shock to the industry is significant enough to warrant concerns about the long-term outlook (Sharma & Nicolau, 2020 ). Qiu et al. ( 2020 ) estimated the social costs of the pandemic to tourism in three cities in China (Hong Kong, Guangzhou, and Wuhan), and they found that most respondents were willing to pay for risk reduction and action in responding to the pandemic crisis; there was no significant difference between residents’ willingness to pay in the three cities. Some research has emphasized how lessons from the COVID-19 pandemic can prepare global tourism for an economic transformation that is needed to mitigate the impacts of climate change (Brouder, 2020 ; Prideaux et al., 2020 ).

It is clear that tourism has contributed significantly to economic development globally, but its role in sustainable development is uncertain, contested, and potentially paradoxical. This is due, in part, to the contested nature of sustainable development itself. Tourism has been promoted as a low-impact, nonextractive option for economic development, particularly for developing countries (Gössling, 2000 ), and many countries have managed to increase their participation in the global economy through development of international tourism. Tourism development has been viewed as an important sector for investment to enhance economic growth, poverty alleviation, and food security, and the sector provides an alternative opportunity to large-scale development projects and extractive industries that contribute to emissions of pollutants and threaten biodiversity and cultural values. However, global evidence from research on the economic impacts of tourism has shown that this potential has rarely been realized (Liu, 2003 ).

The role of tourism in sustainable development has been studied extensively and with a variety of perspectives, including the conceptualization of alternative or responsible forms of tourism and the examination of economic, environmental, and social impacts of tourism development. The research has generally concluded that tourism development has contributed to sustainable development in some cases where it is demonstrated to have provided support for biodiversity conservation initiatives and livelihood development strategies. As an economic sector, tourism is considered to be labor intensive, providing opportunities for poor households to enhance their livelihood through the sale of goods and services to foreign tourists.

Nature-based tourism approaches such as ecotourism and community-based tourism have been successful at attracting tourists to parks and protected areas, and their spending provides financial support for biodiversity conservation, livelihoods, and economic growth in developing countries. Nevertheless, studies of the impacts of tourism development have documented negative environmental impacts locally in terms of land use, food and water consumption, and congestion, and globally in terms of the contribution of tourism to climate change through the emission of greenhouse gases related to transportation and other tourist activities. Studies of the social impacts of tourism have documented experiences of discrimination based on ethnicity, gender, race, sex, and national identity.

The sustainability of tourism as an economic sector has been examined in terms of its vulnerability to civil conflict, economic shocks, natural disasters, and public health pandemics. Most studies conclude that tourism may have positive impacts for regional development and environmental conservation, but there is evidence that tourism inherently generates negative environmental impacts, primarily through pollutions stemming from transportation. The regional benefits of tourism development must be considered alongside the global impacts of increased transportation and tourism participation. Global tourism has also been shown to be vulnerable to economic crises, oil price shocks, and global outbreaks of infectious diseases. Given that tourism is dependent on energy, the movement of people, and the consumption of resources, virtually all tourism activities have significant economic, environmental, and sustainable impacts. As such, the role of tourism in sustainable development is highly questionable. Future research on the role of tourism in sustainable development should focus on reducing the negative impacts of tourism development, both regionally and globally.

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1. One megatonne (Mt) is equal to 1 million (10 6 ) metric tons.

2. One megajoule (MJ) is equal to 1 million (10 6 ) joules, or approximately the kinetic energy of a 1-megagram (tonne) vehicle moving at 161 km/h.

3. One gigatonne (Gt) is equal to 1 billion (10 9 ) metric tons.

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Tourism and economic growth: A global study on Granger causality and wavelet coherence

Chathuni wijesekara.

1 SLIIT Business School, Sri Lanka Institute of Information Technology, Malabe, Sri Lanka

Chamath Tittagalla

Ashinsana jayathilaka, uvinya ilukpotha, ruwan jayathilaka.

2 Department of Information Management, SLIIT Business School, Sri Lanka Institute of Information Technology, Malabe, Sri Lanka

Punmadara Jayasinghe

Associated data.

All relevant data are within the manuscript and its with Supporting information files.

This paper empirically investigates the relationship between tourism and economic growth by using a panel data cointegration test, Granger causality test and Wavelet coherence analysis at the global level. This analysis examines 105 nations utilising panel data from 2003 to 2020. The findings indicates that in most regions, tourism contributes significantly to economic growth and vice versa. Developing trade across most of the regions appears to be a major influencer in the study, as a bidirectional association exists between trade openness and economic growth. Additionally, all regions other than the American region showed a one-way association between gross capital formation and economic growth. Therefore, it is crucial to highlight that using initiatives to increase demand would advance tourism while also boosting the economy.

Introduction

Tourism is one of the world’s major industries, and people have been travelling for pleasure since the dawn of time. It has become one of the fastest expanding sectors of the global economy in recent years. Tourism arose as a result of modernisation and contributed significantly to shaping the experience of modernity. Economic growth and tourism development are intertwined, according to previous literature, therefore, an increase in the general economy will support tourism development [ 1 ]. As a result, it’s critical to investigate how tourism and other factors (including macroeconomic) are linked to economic growth. Economic growth can be defined as an increase in the real gross domestic product (GDP) or GDP per capita. Global tourism, as a key contributory business, has contributed to approximately 10% of global GDP through possible employment opportunities, extending client markets, encouraging export trades, and gains from foreign exchanges [ 2 , 3 ]. Another study that looked at the relationship between tourism and economic growth using variables like tourist receipts and tourism spending added to the literature by suggesting that tourism receipts impacted economic growth [ 4 ]. Additionally, according to Marin [ 5 ], tourism receipts have an upward link to the country’s economy and can thus aid in economic growth. Globally developed tourism business fosters economic growth over time, supporting the economy more than anticipated.

In recent years, research studies analysing the direction of the relationship between economic growth and tourism have been a popular area of interest in literature. A study of 12 Mediterranean nations in 2015 demonstrated a bidirectional causality relationship between tourism development and economic growth [ 6 ]. In a study conducted in Romania [ 7 ], a bidirectional causal relationship exists between GDP and the number of international tourist arrivals, whereas in an African study, a unidirectional causal relationship exists between international tourism earnings and real GDP, both in the short and long run [ 8 ]. According to previous research, this link appears to be both unidirectional and bidirectional.

Some of the processes by which tourism contributes to socioeconomic development include creating jobs, decreasing unemployment rates, and introducing of new tax income streams. In research conducted to investigate the relationship between tourism spending and economic growth in 49 nations, it was discovered that the two are inextricably linked, with a bidirectional causal relationship [ 9 ]. Investigating this relationship could be a useful for prioritising resource allocation across industries to improve overall tourism and economic outcomes.

Furthermore, a study based on 11 Asian regions discovers a close link between real international tourist revenues, capital formation, and GDP, confirming the tourism industry’s contribution to GDP [ 10 ]. Another study that looked at the relationship between tourism and economic growth based on tourist arrivals found that tourism is a good driver of economic growth [ 11 ]. This study looked into data of 94 countries, although there was no geographical examination of this association. Similarly, as previously mentioned, many authors have focused their research on a few countries or a single region when exploring the link between tourism and economic growth. The present study will contribute to filling the above-said research gap whilst providing an overall picture of the relationship between tourism and economic growth at the global level.

Many research papers have been written to determine the relationship between tourism demand and economic growth in diverse regions of the world. Based on certain regions, this link has been demonstrated to be bidirectional as well as unidirectional in the literature. The investigation of the relationship between tourism demand and global economic growth would provide a broad view of the relationship between these two factors. However, limited research has been done to examine this connection, which spans 18 years and includes regional data worldwide. Furthermore, because tourism is not the only element that influences GDP, other factors that considerably influence economic growth too must be considered. In the past, there hasn’t been much research conducted on the moderate impact of tourism on GDP. To address this gap in the literature, this research will examine the relationship between tourism demand and economic growth, as well as the moderating impact of variables such as gross capital formation and trade openness on economic growth in nations around the world. As a result, the current study focuses on all five regions, as there hasn’t been much research done on this topic.

The goal of this research paper is to examine the empirical relationship between tourism and economic growth along with the moderate impact of trade openness and gross capital formation for the worldwide regions. In four ways, the goals of this study can help improve the existing literature. Firstly, this study will be the most recent addition to the literature, focusing on an eighteen-year timeframe using panel data from 2003 to 2020. Secondly, this study will collect and analyse valid data from 105 countries including 42 countries in Europe, 25 countries in Asia & the Pacific, 18 countries in the Americas, and 20 countries from Africa and the Middle East region. The study’s emphasis on an 18-year time period and data from 105 countries allow the conclusions to be generalised and applied to any country. As a result, the study addresses one of the most significant flaws in the literature. Thirdly, in addition to the direct relationship between tourism on economic growth, this study attempts to examine the relationship between tourist receipts modulated by trade openness and gross capital formationon a region’s per capita GDP. These moderating effects on a country’s and region’s economic growth have yet to be investigated. Moreover, to the author’s knowledge, the wavelet technique hasn’t been used in previous research to analyse the relationship between per capita GDP and international tourist receipts. Additionally, analysis of this would produce precise and reliable data for future research and decision-making.

The next sections of the article are organised as follows: the first part analyses the existing literature, followed by the data used and the technique used in this investigation, then the findings and discussion, and lastly, the general conclusion of the study.

Literature review

This section includes contributions to the literature by a variety of scholars from various nations and locations. The conclusions of the study done for a particular region were segregated into regions, whilst studies were divided according to the manner of causal relationship.

Bidirectional causality between tourism and economic growth

The majority of earlier studies investigated the impact of tourism on economic growth in the European region. By adopting the Granger causality test Bilen, Yilanci [ 6 ] analysed the bidirectional causal connection between tourism development and economic growth, in the 12 Mediterranean countries with data from 1995-to 2012. Dritsakis [ 12 ] examined the impact of tourism on Greece’s economic development between 1960 and 2000, by using the Multivariate autoregressive and Granger causality tests. Here, the data revealed a ’Granger causal’ relationship between international tourism earnings and economic growth, a ’strong causal’ relationship between real exchange rate and economic growth, as well as simple ’causal’ relationships between economic growth and international tourism earnings, and real exchange rate and international tourism earnings. However, the above study conducted their research only for Greece. Further, the results of the above stated investigations based on 20 th century data, can vary with time. It is noteworthy that specially with the Eurozone crisis that started in 2009, Greece economy was among the severely affected in the region and hence, data do not reflect this situation. Surugiu and Surugiu [ 13 ] conducted a study using Romanian data, identified a long-term correlation between tourism development and economic growth.

According to the literature, several studies were conducted related to Tourism and economic growth. However, only a few studies have been conducted to analyse the causal relationship of both variables for countries worldwide. Most commonly utilised analytical tool is the Granger Causality test to identify the relationship between these two variables. A study conducted for 135 countries by Şak, Çağlayan [ 14 ] revealed that tourism revenue and GDP show bidirectional causality in Europe in contrast to unidirectional causality in America, Latin America, East Asia, South Asia, Oceania, Caribbean, and countries worldwide. However, the results of the above investigation were conducted based on data from 1995 to 2008, which can vary with time. Economic upheavals changes to economic policies in East Asia (including China, India) where geopolitical strategies are dominant, the impact of tourism revenue on GDP may not be significant. Moreover, Fahimi, Akadiri [ 15 ] tested the causality between tourism, economic growth, and investment in human capital in the microstates using data from 1995 to 2015. The results indicate that there is a bidirectional relationship between tourism and GDP. In the same period, Sokhanvar, Çiftçioğlu [ 16 ] performed a Granger causality analysis on 16 countries to investigate the causal relationship between tourism and economic development. The results proved bidirectional causality only in Chile. Further, this study found that seven countries do not show causality between variables. But as both studies were conducted only for selected countries, these results cannot be generalised about the global situation. Most recently, Pulido-Fernández and Cárdenas-García [ 17 ] explained the bidirectional link between tourism growth and economic development in 143 countries. According to them, tourism supports economic growth in the countries where tourism occurs. However, the study employed the level of economic development and tourism growth as a factor to cluster the countries for analysis; the results would most possibly change if another factor was used to cluster the countries.

Unidirectional causality between tourism and economic growth

In the European region, a long-run link was tested between economic growth and tourism based on international tourist receipts, real GDP, and the real effective exchange rate for Croatian nations using quarterly data from 2000-to 2008. Using the Granger causality test as the analysis tool, the results proved that a positive unidirectional causal relationship exists between economic growth and foreign tourism revenues [ 18 ]. Moreover, by adopting the Granger causality test for the annual GDP, the number of foreign visitors to South Tyrol and the relative prices (RP) between South Tyrol and Germany from 1980 to 2006, Brida and Risso [ 19 ] proved that the causation from tourism and RP to real GDP is unidirectional. A study published in 2013 asserted the link between tourist spending and economic growth. For Cyprus, Latvia, and Slovakia, the study discovered a growth hypothesis. whereas a negative relationship for Czech Republic and Poland [ 20 ]. Furthermore, Lee and Brahmasrene [ 21 ] found that tourism has a positive impact on economic growth and is inversely related to carbon dioxide emissions, using the panel cointegration technique and Fixed Effect (FE) model for the European region. Besides, the majority of previous investigators employed the Granger causality test to determine whether a bidirectional or unidirectional link exists between tourism and economic growth among European regions.

For the Asian Region, Oh [ 22 ] conducted on the Korean economy revealed that there is a one-way causal relationship between economy-driven tourism growth by using the Granger causality test for the period from the first quarter of 1975 to the first quarter of 2001. Furthermore, according to the Granger causality test and co-integration, no co-integration exists between tourism and economic growth in the long run and Tourism-Led Growth Hypothesis (TLGH) did not exist in the short term. However, the author noted that in order to generalise the study’s findings, it is necessary to investigate the TLGH under economic conditions of numerous nations. Examining the most recent study in further detail, Wu, Wu [ 10 ] used a multivariate panel Granger causality test to show a growth hypothesis between real GDP and real international tourism receipt in China, Cambodia, and Malaysia. However, an opposite growth hypothesis has been validated in the Philippines, Hong Kong, Indonesia, and South Korea. In Macau and Singapore, an inverse growth theory has been discovered.

Many researchers have studied the relationship between tourism and the African continent’s economic growth, with various kinds of dimensions and methodologies. In the early 20s, Akinboade and Braimoh [ 8 ] used the Granger causality test to assert the link between international tourism and economic expansion in Southern Africa, where the findings demonstrated a one-way causal relationship between international tourism earnings to real GDP with the use of data from 1980 to 2005. Providing more evidence in the same period utilising the same method, Belloumi [ 23 ] too disclosed that tourism has a beneficial influence unidirectionally on economic growth. Moreover, Ahiawodzi [ 24 ] employed the Augmented Dickey-Fuller (ADF) test for unit root, cointegration test, and Granger Causality to investigate the cointegration and causality of tourism revenues and economic growth. It found a unidirectional causality from economic growth to tourism in Ghana as well as a positive relationship and cointegration in the long run. Similarly, Bouzahzah and El Menyari [ 25 ] also discovered significant unidirectional causation from economic growth to international tourist receipts in the long term by analysing data of Morocco and Tunisia. However, since these studies are limited to one or two countries in the region, researchers were unable to view the bigger picture as a region. The most recent study by Kyara, Rahman [ 26 ] was conducted based on data from Tanzania from 1989 to 2018, considering the country’s international tourist receipts, real GDP, and the real effective exchange rate as variables. Here, findings of Granger Causality, and the Wald test supported the existence of one-way causation between tourism and economic expansion.

Only a few researchers have studied the causation between tourism and economic growth in the Middle East region. Countries such as Bahrain, Saudi Arabia, and Jordan should implement strategies to boost tourist arrivals with receipts by uplifting their tourism to tourists from outside the Middle East region [ 27 ]. Also, the scholars conducted panel cointegration and causality test based on data from 1981 to 2008, which revealed that tourism has a long-term relationship with economic growth. However, this research might be improved to include additional countries in the region, allowing for a more realistic comparison. In the meantime, the impact of tourism on economic growth in oil-rich nations was stated by Alodadi and Benhin [ 28 ]. In Jordan, Kreishan [ 29 ] discovered a unidirectional causal relationship between tourism earnings and economic growth by investigating data from 39 years up to 2009 using the Granger causality test. The importance of tourism to economic growth was explained by Tang and Abosedra [ 30 ] using annual data for the period 1995–2010 in Lebanon. Their findings demonstrated that tourism and economic expansion in Lebanon have a long-term association as tourism and growth are cointegrated and the results supported that the Tourism led Growth hypothesis is valid in this country. However, this analysis was performed with a small sample without considering additional variables apart from tourist arrivals and the real GDP. Providing more evidence, the same conclusion was provided [ 31 , 32 ], who tested data for Iran and Saudi Arabia, respectively. In addition, Ozcan and Maryam [ 33 ] claimed that measures to boost economic growth and development in the tourism sector of Qatar should be continued since a positive link exists between the said two factors. Ozcan and Maryam [ 33 ]. It may be determined from previous literature that the Middle East region exhibits a link between tourism and economic growth. Moreover, previous studies found that the tourism sector makes a small contribution to economic growth in oil-rich countries.

Many studies focusing on the countries of the American continent have deliberated the link between tourism and economic growth. According to Risso, Brida [ 34 ] the expenditure of international tourists has a favourable impact on Chile’s economic growth. The elasticity of real GDP to tourism spending (0.81) demonstrates that a 100% increase in tourism expenditure results in a long-run growth increase of more than 80%. With an elasticity of 0.35, the actual exchange rate also has a beneficial influence. This was examined using the Granger causality test as a basis for analysis using data from 1988 to 2009. Another study which was conducted by Brida and Risso [ 35 ], discovers that the causality of tourism and the real exchange rate to real GDP is unidirectional. Analysis of this study used the Granger test and the cointegrated vector model over data during the period 1988–2008. However, the above study only looked into data up to 2008. Similarly, Brida, Lanzilotta [ 36 ] analysed the causal relationship between Uruguay by adopting a Granger causality test. This study used variables such as GDP, Argentinean tourism expenditure, and the real exchange rate from 1987-to 2006, where it showed a positive relationship among the variables. However, this study was limited to Uruguay and Argentina. Using panel data from nine Caribbean nations from 1995 to 2007, a long-run relationship between economic growth and tourism was investigated by Payne and Mervar [ 18 ]. Here, researchers used international tourist arrivals per capita, real GDP per capita, and the real effective exchange rate. It proved that tourism has a large impact on per capita real GDP. Research conducted in Jamaica from 1970 to 2005 unveiled that increasing visitor receipts positively impacted on GDP. As a result, it was suggested that strategies should be focused on attracting more tourists, as this scenario would enhance not only tourism receipts but also Jamaica’s total economic growth [ 37 ]. However, the study described above, solely considered tourism receipts and GDP, excluding the other factors that affect GDP. Sánchez López [ 38 ] confirmed that international tourism has a positive influence on the Mexican economy by considering quarterly data from 1993 to 2017 and utilising GDP and tourist arrivals as variables.

Focusing on the worldwide studies, the case of Mediterranean countries, Tugcu [ 39 ] found a substantial and favourable correlation between tourism and economic growth. As these scholars affirmed, the relationship between economic growth and tourism has been studied for several groups of countries or nations. According to, the relationship between travel and economic growth varies per country, although European nations can experience economic growth through travel to European, Asian, and African nations. The most recent research, Enilov and Wang [ 40 ] examined the causal relationship between foreign tourist arrivals and economic growth using 23 developing and developed countries, in 1981–2017. It used a bootstrap mixed-frequency Granger causality approach using a rolling window technique to evaluate the approach’s stability and persistency over time concerning economic growth. The findings demonstrated that, in contrast to wealthy nations, the tourism industry in developing nations continues to be a major contributor in future economic growth.

In conclusion, many scholars have examined the connection between tourism and economic growth. However, the moderating impact of gross capital formation and trade openness with tourism receipts is yet to be studied. Moreover, limited studies were conducted to analyse the causal relationship between tourism and economic growth by employing the Granger Causality test. To fill this gap, this research investigates the direction of the causality between economic growth and demand for tourism whilst analysing the effect of gross capital formation and trade openness for the world regions.

Conceptual framework

To address the gaps in this analysis, the conceptual framework was developed to investigate the relationship between tourism and economic growth, including the moderate effect of gross capital formation and trade openness, for worldwide regions as stated in the study’s objectives. Fig 1 depicts the conceptual framework for investigating the empirical relationship between tourism and economic growth, as well as the moderate influence of gross capital formation and trade openness, globally and for each region separately.

Source: Authors’ illustrations.

The endogenous growth theory, which often views economic growth as an endogenous product of an economic system rather than the result of factors that affect it from the outside, serves as the theoretical foundation [ 41 ]. In comparison to non-high-tech service industries like tourism, the endogenous growth theory tends to highlight the benefits of high-tech industries as possibly more favourable for high long-run growth. Yet, specialising in tourism can be strongly linked to higher returns, which in turn reinforces the benefits enjoyed by marketplaces, firms, and sectors.

Data and methodology

This section presents a detailed view of the data, the statistical models employed in this study, and descriptive statistics for the variables.

This study was reviewed and approved by the SLIIT Business School and the SLIIT ethical review board. The following Table 1 illustrates the secondary data sources from which the information was gathered. The data file used for the study is presented in S2 Appendix .

To measure economic growth across all regions, the current study employs yearly GDP per capita data from 2003. The amount of a country’s entire volume of goods and services produced relative to its total population is per capita GDP. To measure tourism growth, we use tourist receipts from 2003 until 2020. Tourism receipts were chosen over tourist arrivals because they incorporate both visitor arrivals and expenditure levels, resulting in a more accurate reflection of information on crucial aspects. Furthermore, the moderate impact on GDP per capita will be measured using gross capital formation and trade openness. Gross capital formation is a measure of a country’s yearly net capital accumulation as a proportion of GDP. The sum of goods and services and imports and exports represented as a percentage of GDP is known as trade openness. All the variables were converted as natural logarithms.

Methodology

The causal link between PGDP and TOUR by analysing the moderating effect of GCF and TRADE is tested using the panel Granger causality test [ 42 ]. According to Wang, Zhang [ 43 ], to assess if the sequence of data is stationary the unit root test will be performed and the co-integration tests will be used to analyse the connection between the variables if they are non-stationary. Based on the co-integration test, the Panel Granger causality test will be adopted to determine the existence of the direction and the causal connection between tourism and economic growth by analysing the moderate effect of GCF and TRADE .

Thus, the following equation will be used to determine causality and its direction [ 44 ].

where, Y is the dependent variable ( i and t denote the country and time, respectively) and X is the independent variable, u i , t denotes the error term and k is the number of lags.

The CUSUM test was carried out to assess the stability of the parameters for countries in the regions separately. Brown, Durbin [ 45 ], Hawkins [ 46 ], Koshti [ 47 ] and Rasool, Maqbool [ 48 ] provided more explanation on how to identify and analyse the plot of CUSUM.

With the help of the above-mentioned equation and to prove the dynamics between the PGDP and TOUR from 2010 to 2020, the Wavelet Coherence approach is used in order to deeply analyse the existence of a correlation among the variables discussed. Goupillaud, Grossmann [ 49 ] developed the wavelet technique in its natural form, and the concept’s foundation is based on their expertise knowledge. A time series is decomposed into a frequency-time domain using the wavelet technique. Pal and Mitra [ 50 ], Adebayo and Beton Kalmaz [ 51 ], Kalmaz and Kirikkaleli [ 52 ] and Adebayo, Onyibor [ 53 ] explained how to analyse and the explanation of the wavelet coherence. The wavelet method is used in this study to further visually confirm the existence of a causal relationship among PGDP and TOUR .

The panel granger causality test was carried out using STATA whereas R Studio was used for the CUSUM test and Wavelet coherence.

Empirical results and discussions

Before analysing Granger causality, Table 2 shows descriptive statistics for the major variables concerning worldwide countries and each region separately. This includes 1,890 total observations, of which 360, 324, 450, and 756 observations are for Africa & Middle East, America, Europe, and Asia & Pacific, respectively.

Note: Obs., SD, Min. and Max. represent Observations, Standard Deviation, Minimum value, and Maximum value, respectively.

Source: Authors’ calculation based on data from the world bank, UNWTO, and WorldData.info.

Fig 2 illustrates the mean PGDP and the mean TOUR for the world’s countries from 2003 to 2020, discovering the trend and patterns of key factors.

Note: The data points were converted as natural logarithms. Source: Authors’ illustration based on data from the world bank, UNWTO, and WorldData.info.

According to Fig 2(A) , the African & the Middle East region has the lowest PGDP when compared to other regions, while the European regions have the highest PGDP . The PGDP of the Americas and Asia & Pacific areas fluctuated similarly until 2017, thereafter, the gap between these two countries narrowed. As indicated in Fig 2(B) , the disparity in tourist receipts between America and the Asia-Pacific area has been nearly identical throughout the years. The European region has recorded the highest tourist receipts when compared to other regions. The graph shows that tourist revenues have dropped sharply after 2019. This is because tourism has been one of the most affected industries due to the covid pandemic. A massive drop in demand due to increased worldwide travel restrictions, including the closure of several borders worldwide led to tourism sector collapse.

The unit root tests are used in this study to determine if the data set of PGDP , TOUR , TRADE , and GCF is stationary or non-stationary. The following Table 3 shows the test results for unit roots.

Note: The symbols *, **, and *** represents 10%, 5%, and 1% significance level, respectively.

The variables PGDP , TRADE , and GCF are stationary, according to the findings of the unit root tests. The Fisher-type unit-root test shows that some panels of the variable TOUR are stationary, but according to the Levin-Lin-Chu unit root test, the variable TOUR is nonstationary. As a result, the cointegration test is used to identify whether there is a long-term link between the variables PGDP and TOUR .

Table 4 presents the panel data cointegration test and results of the unit root tests proved that the variable TOUR is nonstationary. The findings of all the tests, except the Kao cointegration test, indicated that PGDP has a long-term connection with TOUR . It is possible to claim that there is at least a one-way Granger causality as the variables are co-integrated. According to the results of the stability test in Fig 3 , the blue line in in the plot of recursive CUSUM does not cross the red line, it provides strong support that the model fits the data and that the variables are stable for all regions.

Source: Authors’ illustration using R-Software.

Source: Authors’ calculation based on data from the world bank, UNWTO, and WorldData.info

According to Table 5 , a bidirectional causal relationship exists between PGDP and TOUR for all the regions. However, the existence of a bidirectional relationship between TRADE and PGDP was discovered for all the regions except for the European region. On the other hand, a one-way causal connection (unidirectional) between PGDP and GCF was discovered for the American region, whereas all other regions proved the existence of a two-way relationship (bidirectional) between PGDP and GCF .

Based on the findings of all countries, it can be observed that all the estimated z values of the variables PGDP , TOUR , TRADE , and GCF are significant at 0.001. Therefore, with the current estimators, it can be stated that in most countries worldwide, tourism growth Granger causes economic growth and vice versa. Subsequently, it could be assumed that tourism can drive economic growth in a majority of countries and economic growth can boost tourism growth. Fahimi, Akadiri [ 15 ] asserted that tourism to real GDP has a bidirectional causality relationship, where GDP Granger causes tourism and vice versa. However, Enilov and Wang [ 40 ] provide evidence for the validity of the economic-driven tourist growth in developing economies, while providing less support for developed ones. Similarly, according to Tugcu [ 39 ], Mediterranean area shows a favourable correlation between tourism and economic growth. This is likely attributable to a change in sample size, since our data set includes 105 nations and data spanning 12 years. But the research described above used a sample fewer than 25 nations. Furthermore, at the 1% significant level, the empirical findings prove that the PGDP Granger causes TRADE , GCF , and vice versa. Implications of these are that in most nations, the variables TRADE and GCF in PGDP have predictive ability amongst each other.

Similar to the worldwide countries, the values of the African and the Middle East region along with the Asia and Pacific region showed a significant relationship. At the 1% significance level, a Granger causal link between PGDP and tourist receipts was discovered, i.e., This means that tourism leads to economic growth and vice versa in the African and Middle East regions, as well as the countries in the Asia and the Pacific region. This finding was reconfirmed in a previous study conducted in Lebanon where it concluded that a bidirectional Granger causality exists between tourism and economic growth in the short run [ 30 ] in the Middle East Region. Similarly, these results were validated in South Africa by Odhiambo and Nyasha [ 54 ]. Moreover, for the Asian and Pacific region, Wang, Zhang [ 43 ] confirmed that there is a bidirectional Granger connection between China’s domestic tourism and economic growth. Additionally, using the Granger causality test, Mohapatra [ 4 ] proved the same results for the Asian and Pacific regions. According to the findings of these studies, the governments of these regions should promote practices and policies that would benefit the tourism industry and the economy, as tourism growth stimulates general growth in the economy and vice versa. Tourist revenues have surged across the Asia-Pacific region along with PGDP , as the region has evolved into a popular tourism destination for all sorts of diverse tourists. The rich biodiversity of several countries in the Asia and Pacific region has sparked the development of numerous sectors that have increased GDP, which in turn has had a substantial influence on tourism. A few countries in the Asia and Pacific area offer as much natural beauty, which makes them popular tourist destinations. The hospitality, infrastructure, convenient accommodation, and variety of attractions in these countries offer a solid basis for the Asia and Pacific region’s tourism industry. The proportion of international tourist arrivals in the African region is relatively low due to the region’s political unrest, yet tourism is one of Africa’s most promising industries concerning economic growth. The Middle Eastern nations are situated in the middle of important geographical locations. This aspect made it easier to establish global economic connections, which helped the economic growth of the countries over time. The Middle East led urbanisation and other development strategies that gave the region the required infrastructure and setting for the tourist destinations to begin providing of travel and tourism services. As a result, the Middle Eastern countries are increasingly opening their doors to tourists. Moreover, according to the finding, the null hypothesis of the Granger Causality test for the variables PGDP to TRADE , TRADE to PGDP , PGDP to GCF and GCF to PGDP can be rejected at a 1% significant level.

In contrast to countries worldwide, the American region revealed that a significant connection exists between PGDP , TOUR , and TRADE . Findings of this study affirmed that a one-way causal connection exists only from GCF to PGDP in the Americas region. These results mainly indicate that an increase in tourism could increase economic growth in the American region and vice versa. Several American countries, such as the United States and Canada, have a well-established tourism industry that contributes significantly to their GDP and, in turn, their highly developed economic systems encourage the development of infrastructure and tourist destinations. Governments are actively implementing regulations that intend to improve the economic, biological, and social advantages that tourist industry may offer, whilst lessening the challenges that occur when this expansion is unprepared and uncontrolled. Overall, tourist growth patterns in the Americas area are favourable. For the nations of the Americas region, in order to guarantee that their measures to improve tourism are conducted within the larger framework of local, regional, and country’s economic targets. Furthermore, to assist the shift to a green and low-emissions, additional initiatives are also being made to incorporate sustainability in tourism policy and industry regulations.

Considering the European region, a significant connection exists only among the variables PGDP , TOUR , and GCF . As a result, these findings show that tourist revenue and PGDP are mutually influenced. Furthermore, a significant link between TRAD E and PGDP was identified only in European region nations, demonstrating that PGDP does not cause TRADE, but TRADE has the predictive potential over PGDP at a 1% significance level. Europe is regarded as the overall dominant participant in the tourism industry, which fosters economic growth, due to the increasing affordability of travel for bigger groups of people. As tourism directly affects economic growth, it is possible to obtain economic growth in the European region by safeguarding the environment, preserving natural resources, generating jobs, enhancing cultural variety, and respecting cultural traditions. Authorities should focus on developing the tourist industry to obtain high economic growth, and to improve tourism, essential efforts should be taken to enhance economic growth. This is because bidirectional causation exists between tourism development and economic growth of the 12 Mediterranean countries [ 6 ].

The summary of Granger-causality analysis results for PGDP – TOUR , PGDP – TRADE and PGDP – GCF were presented in Table 6 .

Source: Authors’ illustration based on the test results generated.

All four regions show a bidirectional causal relationship between PGDP and TOUR . Furthermore, for the Africa & Middle East, America, Asia & Pacific areas, a two-way causal (bidirectional) link between PGDP and TRADE is demonstrated, whereas there is a one-way causal (unidirectional) link between PGDP and TRADE for the European area nations. When considering the causative relationship between PGDP and GCF , it is discovered that there is a bidirectional causal relationship in all regions except the Americas. In order to examine the relationship between variables among country’s separately, this study summarised the results of Granger Causality for the countries in each region separately in S1 Appendix .

Table 7 interprets the direction of the arrows and the frequency. The direction of the arrows will indicate whether the variables move in phase (rightward arrow indicating a positive correlation), or anti phase (leftward arrow indicating a negative correlation) and the cold (blue) regions of the figure indicates no correlation while the warm (red) regions depict the analysed variables are correlated. The wavelet coherence graph is identified according to the scale as the upper portion, middle portion, and lower portion which represents the short term, medium term and long term respectively.

The correlation between PGDP and TOUR for each region individually from 2003 to 2020 is shown in Fig 4 . When considering the entire period, the arrows in Fig 4(A) are pointing right in the short and medium terms (high and medium frequencies), indicating a worldwide positive impact between PGDP and TOUR when assessing the entire period.

Source: Authors’ compilation using R-Software.

In Africa & Middle east region Fig 4(B) between 2009 and 2020, there are rightward arrows indicating a positive connection in the short and medium term with a high and medium frequency. Additionally, the rightward and downward arrows between 2009 to 2011 and 2016 to 2020 show that PGDP led TOUR in the short term with high frequencies. However, there is a negative association between 2006 to 2008 because of the existence of leftward arrows in the short with high frequency.

Overall, in American Region, Fig 4(C) demonstrates a favourable relationship with a high and medium frequency in all terms from 2003 to 2020. Furthermore, the rightward and downward arrows between 2008 to 2012 PGDP is leading to TOUR , in the short and long term (high and low frequencies).

Fig 4(D) illustrates a positive impact between Asia & Pacific Regions PGDP and TOUR in the short term with high and medium frequency over the years from 2003 to 2019, expect 2005 to 2006, 2008 to 2009, 2012 to 2013 and 2017 to 2018. There is a negative association in mentioned years because of the existence of leftward arrows in the short term with high frequency.

Fig 4(E) indicates a positive impact in the short and medium term (high and low frequencies) from 2003 to 2020 for the European region. Moreover, between 2006 and 2010, the arrows pointing right and up show a positive influence from TOUR to PGDP in the long term with low frequency. Similarly, the arrows in the medium term (medium frequency) between 2008 to 2011 and 2016 to 2018 are pointing downward and right, indicating that PGDP leads to TOUR .

Table 8 summarises the results of our Granger-causality analysis and wavelet coherence for PGDP and TOUR .

As the wavelet coherence technique captures the time dependence of the variables which is conjointly captured under the Granger causality approach, the findings revealed that overall finding of both techniques brings unanimous results, bringing justifications to the study. Both Granger Causality and Wavelet Coherence methods demonstrated that PGDP and TOUR had a bidirectional link in each region separately and globally. Where it demonstrates that tourism drove economic expansion and vice versa.

This research was conducted to obtain evidence supporting the connection between tourism and global economic growth, using the panel Granger causality test with panel data from 2003 to 2020. The results of the link between TOUR and PGDP revealed a strong bidirectional connection. The results, firstly, indicated that tourism has the ability to boost economic growth in all regions, and vice versa. Secondly, a bidirectional relationship between TRADE and PGDP was observed in all regions except in the European region countries. Thirdly, the American area indicated a one-way causal association between PGDP and GCF , whereas the other regions revealed a two-way relationship between PGDP and GCF . Thus, based on these results, it is evident that tourism plays a substantial role in economic growth and vice versa across most regions. Therefore, it is important to emphasize that the use of demand-creation strategies to progress tourism would also boost economic growth.

Further to the bidirectional relationship between TRADE and PGDP , developing trade appears to be a powerful influencer in this study. Having said that, countries with increased tourism also have achieved developed trade and according to analysis, these two variables seem interrelated and mutually beneficial. It also suggests that in most countries, the variables TRADE and GCF in PGDP have the potential to forecast one another since the empirical findings show that the PGDP Granger causes TRADE , GCF , and vice versa. This paper differs from previous research in that it examines the relationship over 18 years, as well as the moderating impact of variables such as GCF and TRADE on economic growth in countries worldwide. Since the data set utilised in this study has a significant number of records, the analysis is more accurate, as the statistical soundness of results grows with the number of observations. As a result, the findings derived from this study could be generalised to the larger population including the entire world. In conclusion, it can be argued that tourism may be used as a catalyst for economic growth and vice versa. It is advised that nations in all regions proceed with caution when deploying more measures to attract visitors, as tourism has a strong influence PGDP . Moreover, the governments of these regions should support practices and policies that would benefit the tourism sector and eventually, the economy. The decision-makers should focus more effective tourism policies on addressing the demand generated by the rise in tourism-related businesses. Additionally, governments should promote investments in tourism-related industries to all types of investors as these ultimately boost the nation’s GDP. Global events such as the pandemic, economic downturns, and the war eruptions have triggered an unprecedented tourism economic crisis, due to the rapid and massive shock to the tourist industry. Due to this, tourism can be a vulnerable channel attracting refugees. This scenario can be risky as the increased pressure on the public finances exerts a higher burden on tax income and economic growth due to the migration of refuges in some countries. In this context, it is critical to overcome this predicament, as the negative repercussions could have a significant impact on the industry, and recovery will take time.

Here by examining the Wavelet Coherence graphs which had been drawn for the regions, American Region has the highest correlation between PGDP and TOUR from 2010 to 2017 compared to the other regions. Most of the graphs indicate a Bidirectional link, which is line with the findings of the panel granger causality. The visual representation of the bidirectional association between TOUR and PGDP in these results reflects the conclusions of the panel granger causality.

Limitations

For this study, data were collected from 105 countries over 18 years, from 2003 to 2020. Other potential variables that influence tourism demand and economic growth, such as the real effective exchange rate, destination attractiveness, seasons, people’s spending capacity, security, urbanization, weather patterns etc., were not included in this study, which is a significant limitation. Moreover, the negative externalities of tourism and economic growth were not taken into account in this study due to the availability of data. For study purposes, countries were divided into regions, and those that depend heavily on tourism were not considered specific. As a result, the limitations mentioned above will need to be addressed in future studies. Future research studies should target to analyse the impact of tourism on economic growth and vice versa by adopting methodologies like the panel regression or generalised method of moments (GMM) which would further clarify the behaviour of these two variables more richly. Additionally, future study might assess the connection between tourism and economic development for each country in the relevant region independently.

Supporting information

S1 appendix, s2 appendix, acknowledgments.

The authors would like to thank Ms. Gayendri Karunarathne for proof-reading and editing this manuscript.

Funding Statement

The authors received no specific funding for this work.

Data Availability

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7 ways to directly support the local economy.

• August 31, 2023

Supporting the local economy

Tourism can bring both positive and negative impacts to a destination. Whether tourism is considered good or sustainable, depends on how well these impacts are management. An important aspect of good tourism is the realisation of creating better places for people to live in and better places for people to visit.

One of the main benefits of tourism for a destination are the economic benefits. Tourism can bring a lot of income to a destination. Travellers spend money on accommodations , food, transportation, souvenirs and activities, creating jobs and supporting local businesses. This economic boost can contribute to infrastructure development, public services, and overall economic growth.

Beware of leakage

Don’t forget that local economic growth is only possible if money spent in the destination, actually stays in the destination. The concept ‘leakage’ refers to money leaving the tourism destination and ‘flowing back’ to other countries, rather than staying within the destination to benefit the local economy.

This can happen when travellers spend money and products and services provided by businesses that are not local to the destination. Leakage can occur in various ways, including:

• Imported goods such as French champagne or Dutch Gouda cheese
• Franchise operations such as McDonalds and Hilton Hotels
• Foreign-owned businesses where the investors and owners live abroad
• International travel companies that take a significant percentage of the travel fee

Leakage reduces the overall economic impact of tourism in a destination and limits the benefits that local businesses, communities and residents gain from the industry.

Measuring leakage

Leakage in tourism can be measured, although is extremely complex due to various factors and the need for accurate data collection. The goal is to quantify the amount of money leaving a destination’s economy through various channels and doesn’t contribute to the local economy directly.

The government plays an important role in tourism revenue distribution as they are in the position to collect relevant data, distinguish between local vs. non-local spending, calculate total tourism revenue and identify leakage factors.

7 tips to directly support the local economy

Luckily, there are also ways for you to truly support the local economy and provide travellers with an amazing travel experience! It comes down to the choices you make in promoting the destination, creating your itineraries and recommendations to your travellers. How are your customers going to spend their money?

In this article

• Hire local guides and drivers
• Book in locally owned accommodations
• Work with local communities
• Collaborate with local partners
• Buy local souvenirs
• Eat in local restaurants
• Donate to local projects

1. Hire local guides and drivers

The tourism industry is responsible for 1 in 11 jobs worldwide. One of the easiest ways to directly stimulate local employment in tourism is to hire local guides and drivers. Besides supporting the local economy, you’ll also add value to your travel experiences .

Locals are very familiar with their country, it’s history, people and culture. They are the connection between the destination and the traveller and in the position to turn the activity into an experience. Don’t forget to hire qualified and trained guides and drivers for quality, safety and reliability.

Want to learn more?

Read more about involving local guides in sustainable practices .

2. Book in locally owned accommodations

As mentioned before, booking with larger chain hotels will make your money leak back to international headquarters instead of staying in the destination. Directly support the local economy by booking locally owned accommodations.

Know that this does not only benefit the accommodation holder. It indirectly also benefits their local employees , their food providers and all other suppliers. Additionally, the traveller will have a better experience staying in an accommodation where they can learn more about the local culture.

3. Work with local communities

Community-based tourism is the perfect way to contribute to the local economy. The aim of community-based tourism is to directly benefit local communities financially, while travellers experience local way of life. The tourism experiences are hosted and managed by the communities themselves, which results in direct employment and ownership!

When done right, community-based tourism is the ultimate way of good tourism. It’s in the perfect position to create better lives for local communities, to preserve their culture and to offer travellers unique experiences.

Read more about our 7 tips to develop community-based tourism .

4. Collaborate with local partners

As a travel business, you are most likely working with a supply-chain in the destination. Partners that help you manage your travel experience, for example transport or activities. When selecting those partners, make sure to work with locals!

Thereby, make sure that you and your partner share the same values. This way you are able to guarantee your customers with a sustainable and unique experience. To offer customers the best possible service, you need to rely on partners that share your values, mindset and mission for sustainable tourism .

5. Buy local souvenirs

For most travellers, travelling is about making memories. Souvenirs are often bought to remind them of a specific travel experience. When buying souvenirs locally, you support the local handcrafters and their material providers.

Inform your travellers to buy souvenirs from local communities and instruct your guides to not take travellers to larger commercial shops. Thereby, make sure to explain about illegal souvenirs made from protected flora and fauna. For example, souvenirs made from poached ivory.

Read more about illegal souvenirs .

6. Eat in local restaurants

Eating and drinking in local restaurants and café’s directly benefits the local economy for the obvious reasons. It ensures the money stays in the destination and that the local owner and employees financially benefit. It also directly supports the local farmers and food producers in the area.

Besides supporting the local economy, eating locally is good for the environment. Local food doesn’t have to travel as far, so it reduces the CO2 emissions . Eating in a local restaurant is also a great experience for the traveller, who will be able to taste and explore the local cuisine.

7. Donate to local projects

Besides buying from and employing locals, you can also support the local economy by donating to local projects. You can choose to support a local project in every destination you offer and donate a fixed amount per traveller. Most travellers will want to contribute to a project in the destination they are visiting.

Donating doesn’t necessarily mean financially. You can also donate time or materials and the projects can be both social and environmental. Think about a local hospital, school or women empowerment center where you can contribute to. Or environmentally, you can support a wildlife sanctuary, a vegetable garden or tree planting project.

The local multiplier effect of tourism

If spent money stays in the destination, the economic benefits of tourism are boosted by the local multiplier effect. When money is spent locally you don’t only benefit the person you do business with. It recirculates in the economy:

Directly: By hiring local employees or purchasing local products Indirectly: By spending money at any local business Third party: When locals spend their tourism-owned money locally

How will you support the local economy?

As a travel business, you have the opportunity to decide where your money and that of your travellers ends up. By spending your money locally and with the right people, you make sure the destination directly benefits from tourism. You give locals the opportunity to do business, to be more independent and to stimulate economic growth. Support the movement of good tourism: better places to live in, and better places to visit.

You must be logged in to post a comment.

Hi, it is interesting to read posts like this. But, I wonder, are they ideas of yours, or there are some investigations or theory behind them?

I mean, I like the insights you are posting, but how do you come to those ideas?

I would love to get in contact and have a chance to cooperate.

Hi Anvar, thank you for your comment! The ideas are our own opinions and thoughts based on our work experience in the tourism industry. For inspiration, we read a lot of articles and academic papers. Please send us an email to get in contact with us!

Hello Anne, Thank you very much for your time contribution posting this. It helpful and locals love oriented.

So good to hear Kagabo!

Indeed , as a good tourism institute trainne ,the purpose to go through the course should be one that results into ‘better places to live in and better places to visit ‘ for both the locals and the visitors to our destinations

Absolutely Priscilla, that’s the goal. Good to see you’re so active on the platform!

Tthe way to go for all stakeholders ; ; as each one of us has a hand in tourism whether as a tour operatot ; tourism buyers and communities where we operate from

Anne de Jong

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Government of Canada launches new Tourism Growth Program

From: Innovation, Science and Economic Development Canada

News release

Canada’s regional development agencies will deliver $108 million over three years to support tourism projects across the country

November 20, 2023 – Vancouver, British Columbia 

Tourism is a cornerstone of Canada’s economy. The tourism sector creates opportunities in communities across this country, supporting almost two million jobs and contributing some $38 billion to Canada’s GDP in 2022. After suffering some of its worst years in history, Canadian tourism is poised to grow significantly; experts predict that its contribution to our economy will continue to increase substantially. The ambitious Federal Tourism Growth Strategy targets a 40% increase of tourism sector's contribution to Canada's GDP by the end of the decade. That is why the Government of Canada is working to help Canadian tourism grow and bring more visitors to our shores. 

The Honourable Soraya Martinez Ferrada, Minister of Tourism and Minister responsible for the Economic Development Agency of Canada for the Regions of Quebec, today launched the new Tourism Growth Program (TGP). With $108 million in federal funding, this program will invest in Indigenous and non-Indigenous communities, small businesses, and not-for-profits, helping them grow and positioning Canada as a destination of choice.

Canada’s seven regional development agencies will deliver the program’s funding directly to businesses and other organizations over the next three years, supporting projects to help more domestic and international visitors discover all that Canada has to offer. The projects will also align with the new Federal Tourism Growth Strategy —supporting sustainable tourism, outdoor experiences, Indigenous tourism, seasonal expansion, and tourism in rural and remote areas—with the goal of diversifying regional economies and spurring economic growth.

Promoting Indigenous tourism is an important part of the Tourism Growth Program, with 15% of funds reserved for it. Indigenous tourism creates jobs and opportunities in communities across the country, which is why the Government of Canada is working with First Nations, Inuit and Métis to encourage its growth. Indigenous tourism also sets Canada apart as a tourism destination for visitors from around the world. Most importantly, Indigenous tourism plays an important role in accelerating self-determination for communities and advancing reconciliation.

The Tourism Growth Program is one of the many ways in which the Government of Canada is helping the tourism industry to grow and thrive. Last week, Minister Ferrada announced the launch of the Indigenous Tourism Fund’s Micro and Small Business Stream, which will provide $10 million in direct support for Indigenous tourism operators. Additional supports for the industry include the $500 million Tourism Relief Fund established during the pandemic, increases in funding to Destination Canada, support for major international events like the 2026 FIFA World Cup, investments in the Trans Canada Trail, and partnerships with other governments and the private sector to help enhance tourism offerings and welcome more visitors to our country.

“When it comes to tourism, Canada has what the world wants—and it’s no surprise that we’re a tourism powerhouse. As a government, we have a responsibility to help the industry grow and thrive so it can keep contributing to Canada’s prosperity. The new Tourism Growth Program will help Canadian tourism seize opportunities and create jobs, and I look forward to seeing the difference it makes in communities across this land.” – The Honourable Soraya Martinez Ferrada, Minister of Tourism and Minister responsible for the Economic Development Agency of Canada for the Regions of Quebec

“With its unique arts and culture experiences, breathtaking natural attractions, and more, B.C. is a world-class destination for visitors. Through the Tourism Growth Program, PacifiCan will invest in projects that grow the B.C. tourism industry—an industry that already supports more than 80,000 jobs and 16,000 businesses across the province. Growing tourism in B.C. means creating more jobs that British Columbians can rely on and attracting more visitors to our beautiful home.” – The Honourable Harjit S. Sajjan, President of the King’s Privy Council for Canada and Minister of Emergency Preparedness and Minister responsible for the Pacific Economic Development Agency of Canada

Quick facts

The $108 million Tourism Growth Program was announced in Budget 2023.

The Tourism Growth Program complements supports for the tourism industry provided through other federal, provincial and territorial programs.

In 2023, Canada welcomed 12.6 million international tourists in the first eight months, a 54% increase from the same period in 2022. 1

In 2022, the tourism industry supported 1.87 million jobs, recovering to 90% of the number of jobs seen in 2019, when the industry supported 2.07 million jobs. 2

In 2022, tourism contributed nearly $38 billion to Canada’s GDP 3 , generated close to $94 billion in revenue for businesses 4 , and accounted for almost 13% of service exports 5 .

Associated links

• Tourism Growth Program
• The new Federal Tourism Growth Strategy
• The Canadian tourism sector

Marie-Justine Torres Press Secretary Office of the Minister of Tourism and Minister responsible for the Economic Development Agency of Canada for the Regions of Quebec 613-327-5918 [email protected]

Media Relations Innovation, Science and Economic Development Canada [email protected]

Stay connected

Find more services and information at Canada.ca/ISED .

Follow Innovation, Science and Economic Development Canada on LinkedIn .

Follow @cdntourism on social media: X (Twitter) , Instagram .

Follow Canada Business on social media: X (Twitter) , Facebook , Instagram .

______________________________________________________________

• Statistics Canada. Table 24-10-0055-01  Non-resident visitors entering Canada, by country of residence, mode of transportation, arrival type and traveller type
• Statistics Canada. 2019-2022. Labour Force Survey
• Statistics Canada.  Table 36-10-0234-01  Tourism gross domestic product, constant prices (x 1,000,000)
• Statistics Canada.  Table 36-10-0230-01  Tourism demand in Canada, constant prices (x 1,000,000)
• Statistics Canada. Table 12-10-0134-01 Exports and imports of goods and services, quarterly, Canada, (NAPCS 2017) (x 1,000,000)

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Canada 365: welcoming the world. every day. the federal tourism growth strategy, table of contents, message from the prime minister, message from the minister of tourism and associate minister of finance, a new journey begins, tourism by the numbers: a cornerstone of canada's economy, guiding principles: a strategy for a modern canada, canada has what the world wants, consultations on the new federal tourism growth strategy, prioritize tourism growth in canada, leverage canada's brand, rebuild the workforce, improve infrastructure and modernize the travel experience, promote sustainability, invest in canada's tourism assets, embrace recreation and the great outdoors.

• Partner to grow indigenous tourism

Attract more international events

Improve coordination through a federal ministerial council, other measures of success, annex 1 – federal actions to support and grow canada's visitor economy.

Canada 365: Welcoming the World. Every Day. The Federal Tourism Growth Strategy PDF - 2.45  MB

With offerings like the Singing Sands of Prince Edward Island, Rocky Mountain ski adventures and Toronto's vibrant Caribbean Carnival, Canada is a top destination for international travellers. We take pride in opening our towns and cities to the world and showing off our country's beauty – from our coastlines to our lakes, rivers, forests, mountains, and everything in between.

We welcome millions of people each year with openness and optimism. Our values of diversity and inclusion help make Canada a destination of choice for people from around the world.

Our success is made possible by the many dedicated workers across the country. The tourism industry is booming, thanks in part to the people whose knowledge and expertise help visitors get the most out of their trip.

Today, as we introduce the new Federal Tourism Growth Strategy , we pave the way for Canada to continue attracting more visitors and we inspire more Canadians to experience the beauty our country has to offer. This strategy will help workers build the skills they need. It will improve hospitality services and invest in better infrastructure, while protecting the environment for generations to come.

This strategy was developed in consultation with a wide range of actors, including workers, small businesses, environmental groups, outfitters, tour operators, and more. The contributions of all those who participated are greatly appreciated. I would also like to thank Minister Boissonnault for his leadership and his commitment to the tourism sector, as well as all the workers and industry partners who work tirelessly to inspire the world to come to Canada, 365 days a year. There's always something new and exciting to do.

The Right Honourable Justin Trudeau, Prime Minister of Canada

Canada welcomes the world 365 days a year.

Our country offers something for everyone, from exploring Gros Morne National Park in Newfoundland and Labrador, to whale watching off the coast of Victoria, to dipping your toe in the Arctic Ocean, to watching the stars at Métis Crossing, to making snow angels at Frost Regina in minus 30 degree weather, to grabbing a room at the ice hotel during the Québec Winter Carnival.

Canada has it all : wide open spaces and bucket-list adventures, inclusive and welcoming hosts, francophone history and culture, unique Indigenous tourism experiences, and so much more!

As social beings, we have a fundamental need to connect. To build community. To find people who share our values. The visitor economy does just that: it brings people together.

The people who work in the industry – women, youth and seniors, Indigenous peoples, racialized Canadians, persons with disabilities, 2SLGBTQI+ people, and newcomers – are among the best in the world. And they can't wait to meet you.

The COVID-19 pandemic hit us hard – but we are resilient. And while the world is facing global changes in trade and geopolitics, this shift is at the heart of the resurgence of the tourism economy.

Because trade leads travel . More people coming to Canada to do business means more people exploring Canada while they're here. This is an unprecedented opportunity for communities from coast to coast to coast – large and small, urban and rural – to seize the moment. Our industry is moving from recovery to prosperity, creating jobs, driving economic growth, and helping communities to flourish once again – and we're just getting started.

Now more than ever, it's important that we come together – government, industry, communities – to power the economic engine that is tourism. That's why we've created the Federal Tourism Growth Strategy .

Canada 365: Welcoming the World. Every Day will chart a path to sustainable growth for generations to come, it will support good jobs and talent attraction, and it will make sure that international travellers continue to choose Canada over and over again.

Together, we can bring tourism to new heights and soar together.

Part 1: Where we are now

In 2019, the federal government released a plan called Creating Middle Class Jobs: A Federal Tourism Growth Strategy , which identified that the Canadian tourism sector was not reaching its potential. Crucial gaps in public and private investment in core tourism assets and attractions meant that the sector missed opportunities to create good jobs that serve local communities and support families. The 2019 strategy outlined the need to extend the peak tourism season into the shoulder season and winter to help create more stability, attract a higher volume of guests, and diversify Canada's tourism assets. After hitting a benchmark year for tourism in Canada, we were on a course for growth.

When the pandemic hit in March 2020, grounding flights and halting the movement of people, the tourism sector in Canada and around the world had to pivot quickly to respond. Many more months of hardship and uncertainty followed while businesses struggled to keep afloat. Under these dire circumstances, we became acutely aware of the number of Canadians that depend on hospitality, restaurants, transportation, and attractions for their livelihoods and realized how integral the tourism sector is to our leisure, community, and identity. Recognizing the devastating effects of the pandemic on such an important economic sector, the Government of Canada provided considerable supports to help the sector begin to rebuild, most notably through the $500 million Tourism Relief Fund, among others. The sector was resilient.

Now it's time to build for the future with an actionable strategy, using 2019 as a foundation and taking lessons learned from the pandemic. Our world-leading country brand, natural wonders, dynamic and safe cities, and welcoming a multicultural society all point to a strong outlook for Canada's visitor economy. The new Federal Tourism Growth Strategy, Canada 365: Welcoming the World. Every Day sets a vision to harness the power of tourism to generate economic growth in communities across the country and drive the sector to the next level of international success.

Tourism has made an encouraging comeback from the COVID-19 pandemic. By the end of December 2022, the number of tourism businesses had recovered to 93% of 2019 levels, Footnote 1 while jobs in the sector were back to 90% of pre-pandemic levels. Footnote 2 In total, tourism contributed nearly $38 billion to Canada's GDP, Footnote 3 generated $94 billion in revenue for businesses, Footnote 4 and accounted for almost 13% of our service exports last year. Footnote 5

The visitor economy is one of Canada's top service exports. Global projections point to strong continued growth; one such forecast, from the World Travel and Tourism Council, indicates that tourism's contribution to Canada's GDP could double by 2033. This potential worldwide growth represents a tremendous opportunity.

In 2022, the tourism sector supported 1.9 million jobs across Canada. No other sector has an economic impact that reaches every region in the country. Footnote 6

Some 218,041 businesses supported the visitor economy in 2022 Footnote 7 and the vast majority were small and medium-sized enterprises. Footnote 8

In a widespread effort to build back better and more inclusively, this strategy recognizes the important role that the visitor economy has to play in advancing progress for equity-seeking and marginalized groups. As such, there are key guiding principles and foundations that underpin the development of this strategy.

Equity, diversity, and inclusion

Canada's tourism sector is uniquely inclusive in its workforce. Racialized and 2SLGBTQI+ communities, youth, women, new Canadians, and Indigenous persons often find their first job in the visitor economy. In 2022, women and youth represented higher percentages of the tourism labour force than the overall workforce; as well, more majority owners of tourism businesses identified as women, racialized Canadians, or newcomers to Canada than in other sectors.

The federal government honours and supports official language minority communities. Canada's linguistic duality is a distinct feature of our history and society, and it creates ties with visitors from all over the world. Enhancing tourism in official language minority communities, as well as highlighting the multitude of languages spoken across Canada, helps to sustain and promote the vibrancy of those communities and cultures.

The tourism sector cannot grow without having a mindset to promote accessibility for everyone. Persons with disabilities not only contribute to the tourism workforce but also constitute a growing cohort of international travellers. This represents an emerging market that will only continue to grow as barriers to travel and tourism are addressed. As such, developers of future tourism destinations, and those upgrading existing ones, must be mindful about the need to ensure accessibility for all.

By supporting the visitor economy, we are also creating and maintaining jobs for equity-seeking groups and diverse communities across the country.

Tourism profile: René Boudreau

As a Black woman living in Nova Scotia, René Boudreau has immense pride in her home and her culture. Her belief in the power and impact of fair representation led her to launch her own tourism business, Elevate and Explore Black Nova Scotia.

Her mission was clear: improve representation so more people would feel welcomed. By shining a spotlight on the Black community exploring and enjoying all the wonders of Nova Scotia, René knew she could compel more Black travellers to visit—and keep coming back.

Throughout René's advocacy for her community and her home province, she has experienced profound personal growth, gaining the confidence to use her voice as a force for positive change. Her career in tourism became so much more than a job – it's a way of honouring her home and her people. And she's proud of it.

Reconciliation in action

This strategy serves as a way to strengthen Canada's partnership with Indigenous Peoples, whose cultures, histories, and traditional and unceded territories attract considerable interest from international visitors. Enhanced investment by and collaboration among federal, provincial, and industry partners will help position Canada as a top destination for authentic Indigenous tourism experiences. Participants in the consultations added that this approach would “provide an opportunity for cultural reclamation and sustainable economic development.”

In fact, authentic experiences led by Indigenous communities and enterprises are in high demand for international visitors because of their uniqueness. Investment in this high-growth segment also contributes to advancing reconciliation by creating the conditions for increased employment and economic growth. By sharing their cultures and approaches to environmental stewardship and extending their hospitality to the world, First Nation, Métis and Inuit communities and businesses can achieve increased prosperity, heritage preservation, and self-determination.

Sustainable and regenerative approaches

No matter their country of origin, global travellers increasingly consider their footprint when making tourism decisions. Responding to this market shift, tourism operators are now adopting greener practices across their offerings. Even further, there has been a surge in tourism activities that are founded on environmentally sustainable principles or regenerative approaches.

By welcoming more visitors in the shoulder and winter seasons and encouraging travel to lower-traffic regions and destinations, we can align Canada's visitor economy with sustainability and regenerative tourism goals and avoid the social and environmental impacts of over-tourism at certain destinations. Keeping the global climate and sustainability goals at the heart of the sector's recovery will ensure we are building a sector for the future.

A focus on rural Canada

Rural and remote tourism provides opportunities to experience the full measure of Canada's regions, including the Far North. In fact, tourism provides billions of dollars in revenue and accounts for 10% of local jobs in rural (non-metro) areas. Footnote 9 Visitors can stay at a working farm or ranch and learn about the rigours and rewards of rural life. They can gaze at the northern lights or join a dogsledding excursion. They can attend agricultural fairs; purchase local goods; and enjoy historical settings, cuisine, country environments, and opportunities for rugged adventures. For the communities, tourism can diversify and strengthen their economic base and viability as well as safeguard local culture, language and heritage. Businesses benefit from increased income from direct sales of homegrown and locally made products. Additionally, visitors want to participate in authentic Indigenous experiences, and 62% of Indigenous tourism businesses are in rural and remote areas. Footnote 10 Rural and remote tourism can be transformative, and many communities increasingly rely on the benefits of the visitor economy to grow their communities. Footnote 11

Our diverse and unique attractions welcome people from around the world, every day:

• Canada's iconic assets: geography, biodiversity, wilderness at the edge of cosmopolitan cities, and other environmental assets
• The longest coastline in the world, at 243,042 km, bordered by 3 of the 5 great oceans, and some of the largest lakes in the world
• 47 national parks and national park reserves, such as Riding Mountain in Manitoba and Fundy in New Brunswick, 19 UNESCO biosphere reserves such as Mont Saint-Hilaire in Quebec, and numerous provincial parks
• The Trans Canada Trail, the world's longest recreation trail, which extends 28,000 km across the country, the Blueberry Trail in Quebec and the Okanagan Valley Wine Trail
• 20 UNESCO World Heritage Sites — archaeological, historical, cultural, and natural sites of outstanding universal value, such as SGang Gwaay in Haida Gwaii, British Columbia, Head-Smashed-in Buffalo Jump in Alberta, the historic district of Old Québec and Gros Morne National Park in Newfoundland and Labrador
• A diversity of winter sports, such as alpine, freestyle and cross-country skiing; snowboarding; speedskating; curling; and hockey
• Some 2,600 museums, public art galleries and heritage institutions across the country
• A broad spectrum of dining experiences, from Michelin-starred establishments in Vancouver and Toronto, to Montréal's exceptional restaurants, to on-trend-bistros and farm-to-table eateries; 21 Canadian restaurants on the world's 1,000 best list; plus various culinary experiences such as Indigenous cuisine across the country, the BC Farmers' Market Trail, and the many dining experiences on Nova Scotia's Lobster and Chowder trails
• 196 professional arenas and 8,000+ hockey rinks, and 1 of only 9 countries to host both the Summer and Winter Olympics
• Toronto's Caribbean Carnival, the largest in North America
• The Calgary Stampede — the world's largest outdoor rodeo
• 10% of the world's Pride events, including Toronto Pride, one of the largest Pride events in the world
• The largest producer of ice wine in the world, along with 550 wineries in 4 provinces and 1,000+ craft breweries from coast to coast to coast
• Top-ranked international ski destinations, with 296 resorts and 4,000 km of slopes – including Whistler Blackcomb, North America's largest resort; Lake Louise; and Mont Tremblant, eastern North America's leading ski destination; and many more!

Part 2: What we heard: The challenges to unlocking potential for growth

Through months of online and in-person public consultations, the Government of Canada heard from stakeholders across Canada: industry associations; workers and business owners; provincial, territorial, and municipal governments; Indigenous partners; destination marketing organizations; and Canadians from all walks of life.

We heard that we must take action now to set intentions and goals, leverage Canada's reputation, improve federal coordination, rebuild the tourism workforce, improve infrastructure and access, and promote sustainability. Addressing these persistent challenges will enable the tourism sector to unlock its potential for growth.

Engagement by the numbers

To develop the new strategy, we engaged with a variety of stakeholders, reflecting a truly national response that represents the tourism industry across Canada. Roundtables and online submissions garnered input from some 400 tourism stakeholders.

In-person and virtual roundtables with 220 stakeholders

• 9 national thematic roundtables
• 6 regional roundtable sessions
• about 15 participants in each

Online consultations, with approximately 180 submissions received

• close to 115 from companies and stakeholder associations
• 65 from individuals

Though being a major contributor to the Canadian economy, tourism activity has traditionally been an afterthought or a passive economic activity. Part of the problem is that the growth potential of the tourism industry is not well known or well defined. In fact, at a rate of 5%, tourism grew more than twice as fast as the national economy in the years leading up to the pandemic. There are a number of ways for government to help de-risk larger projects or facilitate access to capital, from direct business supports, to infrastructure investments, to financing from institutions like the Business Development Bank of Canada. And when we are facing uncertain economic times, it is even more pressing to stimulate investment in sectors with high growth potential. Adopting a more active and intentional approach to the visitor economy can help blaze the path for a more fulsome recovery and set a more strategic course for success.

Canada regularly tops key international rankings:

• Canada is ranked third in the Nation Brands Index 2022.
• The 2021 Best Countries Report ranked Canada first in recognition of our quality of life, safety, and human rights.
• Canada held the top four spots for North America's most liveable cities in the Economist Intelligence Unit's 2023 Global Liveability Index.
• Canada's global credit standing ranks amongst the highest across various agencies, reflecting the stability of our economy as a place to invest.

Métis Crossing

Métis Crossing, located northeast of Edmonton, Alberta, is a premier Indigenous-owned and operated centre for Métis cultural interpretation, education, gatherings, and business development. Sitting on 278 hectares of land, the Crossing is designed to engage visitors by offering an exploration of Métis cultural experiences. This includes traditional workshops that provide an opportunity for interactive, hands-on learning experiences, four-season nature trails, art exhibits and Indigenous-inspired cuisine. Most recently, the federal government invested $1.45  million for Métis Crossing to create 10 year-round sky watching domes that allow visitors to sleep under the stars. Métis Crossing represents and shares elements of Métis culture with all visitors, including respect and pride, family reconnection and reconciliation, and sacredness of place.

Canada is set up for success thanks to our world-renowned brand. Around the world, the maple leaf flag is known as a beacon of safety, inclusivity, and respect for human rights and international norms that underscores a stable, peaceful harbour in a time of global uncertainty. Canada's ranking in the Nation Brands Index 2022 is third in the world.

We heard that the tourism ecosystem is not doing enough to leverage our brand for the benefit of our communities. Currently, the majority of tourists to Canada visit during the peak summer months. To welcome more guests, we must expand Canada's tourism season into winter and shoulder months and enhance Canada's brand and presence in target markets.

In tourism segments such as business, sport, and cultural event hosting, Canada can be more proactive in bringing events to communities big and small. The country is also well-known for its natural spaces, authentic Indigenous experiences, and environmental commitment and stewardship. Communities and individuals that celebrate and promote diverse languages and cultural practices become an eager audience for festivals of film, music, and art. By leveraging Canada's strengths, other emerging areas of international interest will benefit as well, such as Canada's culinary gems and Michelin-recognized chefs, our growing craft breweries and wineries, and our regulated cannabis industry. An everyday embodiment of values of inclusivity, diversity, and intercultural exchange, the Canadian tourism ecosystem promotes our country as a destination of choice for a variety of international events and visitors.

The country needs a sustained and skilled workforce to propel the growth of the sector. Notably, tourism is a significant employer of youth, women, Indigenous peoples, new Canadians, and people of diverse backgrounds. In this way, expanding the tourism workforce fosters and promotes inclusive economic growth.

While the sector faced workforce challenges prior to 2020, the pandemic changed attitudes towards employment in a fundamental way. The halt in tourism during the pandemic caused many staff to look to other opportunities, worsening long-standing factors that prompted workers to exit the sector, such as uncompetitive wages, lack of affordable transportation and the high cost of housing in popular tourist areas. Despite mounting challenges, the sector has experienced a rebound in 2022 and 2023 – proof of its resilience and grit.

All orders of government, educational institutions, and employers must collectively change the narrative for this sector and the diverse skill set that powers it. Communities that have shifted to promoting tourism as a career of first resort have seen great success in the face of changing industrial priorities. The federal government can play an important coordinating role in advancing strategies that benefit the sector.

If we are to continue to benefit from the bounty of the sea, we have to rethink the way we use and manage it. Zita Cobb Innkeeper, Fogo Island Inn

Photo credit: Destination Canada

Canada has lots to explore, but promoting new and improved destinations will rely on the ability to get there safely and efficiently. For tourism operators and businesses, a lack of consistent or reliable supply chain hampers their ability to offer quality products and services. Vast distances, rugged geography, and seasonal weather conditions can make accessing many Canadian destinations challenging.

As access to some iconic Canadian destinations is inconsistent, or not yet developed, we must focus on a multi-modal transportation framework. Providing key markets with efficient and affordable air access to, from, and within the country and expanding new gateway cities to support more regions will ensure visitor numbers can grow. Trade leads travel. Acknowledging that Canada's trade priorities and tourism go hand in hand will help to secure more strategic air sector agreements. Modernizing and digitizing the travel experience at our airports and land borders, and primarily between our key markets and partners, is crucial for Canada to keep up with our international competitors – for instance, by advancing on uniformity measures for individuals with accessibility requirements so every visitor to Canada may have a consistent travel experience. Further, interprovincial motorcoach services, high-frequency rail between urban centres and light-rail transit within urban centres, as well as safe and reliable road infrastructure all provide the foundations for a seamless visitor experience in Canada.

Communities that offer tourism attractions will continue to seek improvements to roadways, bridges, basic infrastructure for parks and trails, and ports and piers to support the cruise industry. Other issues raised included adequate housing for hospitality staff, as well as high-speed broadband services, for temporary workers and lifelong residents alike. Investments in healthcare, childcare, and resource supply chains have a positive impact on the places we call home.

Active Transportation Fund

The federal government provided $400 million to the Active Transportation Fund to support a shift from cars towards more active transportation, in line with Canada's National Active Transportation Strategy. This program invests in projects that create and expand networks of pathways, bike lanes, trails, and pedestrian bridges. For example, the City of Iqaluit received $50,000 to develop two informal recreation areas into high-value and market-ready destinations, in line with its Recreation Master Plan. Active transportation projects provide tangible benefits to communities, promote healthier lifestyles, and reduce greenhouse gas emissions.

Finally, there is a pressing need to better align the visitor economy with Canada's climate change goals, such as achieving net-zero emission levels by 2050. Tourism activities have an environmental impact. The industry contributes to Canada's greenhouse gases and energy use, mainly due to emissions from air transportation.

There is a growing consensus among tourism stakeholders on the importance of embracing low-carbon pathways. Air transportation has improved its efficiency, and airlines are increasingly transitioning to more carbon-efficient fleets. As well, tourism businesses are placing an increased priority on reducing waste production and lowering water and energy consumption.

As an industry composed mainly of small businesses, there will be unique approaches to meeting sustainability goals while continuing to focus on day-to-day operations. To increase communities' abilities to adapt to climate change, improvements to buildings, sites, and destinations require assistance and coordination from many partners.

Every action, big and small, goes a long way to make the sector more resilient and contribute to the long-term prosperity of the sector and our planet.

Initiative for Sustainable Aviation Technology

Canada is a global leader in the aerospace sector, which is why the federal government is investing $350 million to support a new Initiative for Sustainable Aviation Technology aimed at accelerating innovation in sustainable aviation. This program will help drive the transformation of the aviation industry and support the transition to net-zero for the tourism sector and Canada's economy as a whole.

Part 3: Strategic priorities

The new Federal Tourism Growth Strategy has been built on five strategic priorities. These priorities, identified after extensive consultations with partners across the ecosystem, will guide the Government's actions and partnerships with tourism stakeholders and other orders of government to grow Canada's visitor economy. By aligning efforts and investments in these key areas, we are homing in on our strengths to catapult the tourism sector forward in an increasingly competitive global market. In particular, the Strategy targets segments of the tourism sector with immediate high-growth potential to help Canada reach a set of ambitious goals and to improve our international standing.

As set out below, the priorities for the new Strategy, in no particular order, are:

• Invest in tourism assets

Partner to grow Indigenous tourism

• Improve Coordination with a Federal Ministerial Council

Canada has what the world wants – from wide open spaces and breathtaking natural wonders to diverse urban communities that are home to vibrant cultures and histories. Yet many of our most admired and best-known attractions require enhancements and upgrades, as well as support to digitize services and make physical attractions more sustainable and resilient to climate change. The shortfall in private and public sector investment in tourism assets impedes our ability to improve current attractions and build new ones.

Although Canada has recently gained ground in measures such as international arrivals and visitor revenue, the global tourism market has become fiercely competitive. Peer countries such as the U.S., United Kingdom, Australia, and France have launched their own post-pandemic strategies to boost their visitor economies. As the world is travelling again, Canada needs to focus on its key markets and build partnerships to attract travellers from overseas.

Over the decade leading up to the pandemic, tourism achieved more than twice the overall growth of the national economy. The annual GDP growth rate going forward is projected to be 4.9%, indicating a prime opportunity for increased support for the sector.

Visitor spending contributes to business growth and employment opportunities. Tax revenues maintain the public services and modern infrastructure on which Canadians rely. Tourism powers our communities large and small in urban and rural Canada. The time is now to invest in this sector. That is why our government is acting now to help attract and de-risk those investments and to facilitate access to capital for business owners.

Increase investment in tourism attractions

• Budget 2023 announced $108 million over 3 years to create the Tourism Growth Program (TGP) to assist communities, small and medium-sized businesses, and non-profit organizations to develop tourism projects and events. The Government of Canada's seven regional development agencies will deliver this program, given their mandate to promote regional economic development across all regions of Canada and given their extensive knowledge and experience supporting tourism businesses and organizations across their respective geographies.
• Government has a role to play to incent investments in areas that have historically lacked attention. The TGP will help leverage tourism opportunities in communities, including those that are rural and remote, based on regional contexts and in complementarity with existing federal, provincial, and territorial programs.
• The federal government also invests $96.5 million annually in Destination Canada to promote Canada's brand and assets internationally, provide key data and statistics on the industry, and assist in attracting significant business events.
• The federal government will work closely with our closest neighbour and largest international market, the United States, to improve and enhance tourism between our two great nations. As Canada gears up to co-host the 2026 FIFA World Cup tournament with the U.S. and Mexico, our collaboration will intensify and broaden. Given our shared border, Canada and the U.S. will partner to welcome the world and showcase our respective countries as premier destinations.
• High-quality, reliable, timely, and robust market data helps guide investment decisions. Destination Canada will stand up a new centralized, accessible, and secure platform for tourism data. This service will offer real-time, relevant tourism information and intelligence to governments, businesses, communities, and other partners across the tourism ecosystem.

Business Development Bank of Canada: Tourism support

BDC programs have made an impact in supporting the tourism sector, offering flexible terms, expert advice, and financing. As of March 31, 2022, the Bank had more than $3.7 billion in loans outstanding to the sector.

During the COVID-19 pandemic, BDC played a crucial role in supporting the tourism sector through its Highly Affected Sectors Credit Availability Program (HASCAP). In partnership with over 50 financial institutions, BDC provided support to the hardest-hit sectors, including tourism, accommodation, food service, arts and culture, and the airline industry. HASCAP offered a 100% guarantee to financial institutions, enabling them to extend loans of up to $1 million to eligible businesses, with low interest rates and extended repayment terms of up to 10 years.

Under HASCAP, $1.5 billion in loans were deployed to the tourism sector, representing more than 40% of total program activity. This support helped tourism businesses navigate pandemic challenges, enhance operations, and position for future growth.

BDC's financing and advisory services continue to play a vital role in bolstering the Canadian tourism sector, providing the necessary resources and guidance to help businesses thrive.

To learn more about how BDC's support for businesses, discover how this Nova Scotia entrepreneur grew her prepared meal service business and now sells her products in more than 150 grocery stores.

A selection of tourism investments by Canada's regional development agencies

Atlantic Canada Opportunities Agency (ACOA) ACOA has supported businesses in the Bonavista Peninsula in Newfoundland and Labrador to pivot to tourism after the commercial fishery closed in 1992. In New Brunswick, projects funded included extending Fundy Trail Parkway to provide greater access to the Fundy National Park and Hopewell Rocks region from other coastal communities. ACOA also supported Mountain Bike Atlantic to promote the sport in the region and improve experiences for residents and tourists alike.

Canada Economic Development for Quebec Regions (CED) CED's recent tourism investments included funding for the Interpretation Centre on Marine Mammals in Tadoussac to expand and modernize its displays. As well, financial assistance was provided to Le Monastère des Augustines , an 18th century historic site in the city of Québec, to develop Le Vivoir , a rest area offering a restorative wellness experience.

Federal Economic Development Agency for Northern Ontario (FedNor) Over the pandemic, FedNor invested in 165 projects across Northern Ontario. For example, FedNor supported the Manitoulin Island Cycling Advocates to develop a self-guided tour app. In Northwestern Ontario, Mahkwa Lodge , owned by Lac Seul First Nation, received an investment to winterize and upgrade the facility to help expand its client base.

Federal Economic Development Agency for Southern Ontario (FedDev) FedDev provided pandemic related support to Mādahòkì Farm , an Indigenous women-led tourism destination, to enhance its facilities, gardens, and programs as a four-season venue. The farm offers unique agritourism, farm-to-table dining, and authentic cultural experiences from an Indigenous perspective. Funding also went to Kitchener-Waterloo Oktoberfest to expand its duration, add new family and Pride events, and upgrade visitor facilities.

Prairies Economic Development Canada ( PrairiesCan ) Among the investments made by PrairiesCan was funding for Tourism Swift Current for its work with emerging tourism sites to position southwest Saskatchewan as a destination. Fort Edmonton Park also received significant funding to create immersive, year-round compelling experiences, introducing visitors to First Nations, Métis, and Inuit worldviews through the Indigenous Peoples' Experience .

Pacific Economic Development Canada (PacifiCan) PacifiCan provided funding to the Haida Nation for enhancing visitor accommodations and cultural tourism programming. Funding was also provided to Science World in Vancouver for infrastructure and gallery upgrades to increase visitation and position this iconic tourism asset for post-pandemic recovery. It is one of the largest destination attractions in BC.

Canadian Northern Economic Development Agency (CanNor) In both the Yukon and the Northwest Territories, CanNor entered into 3rd party agreements for the delivery of funding for tourism operators. Funding was further distributed, by the Tourism Industry Association of the Yukon and the Government of the Northwest Territories, to tourism owners and operators to enhance and adapt their products, training, marketing activities, and operations in response to COVID-19 requirements and evolving markets.

Canada boasts the unparalleled ability to offer year-round recreational experiences. Travellers are increasingly spending more on “adventure tourism.” Canadians themselves consistently show an interest in and an appreciation for parks, trails, and natural spaces in their vacation plans.

The pandemic brought sharply into focus the health benefits – mental, physical, and social – of getting outside. And beyond these personal dividends, enjoying the great outdoors can create a greater sense of environmental responsibility and connection to one's community.

Trails are also an important economic contributor to the tourism sector and local economies. Results of the 2023 National Léger Survey found that over one third (35%) of respondents spent money while using trails in the past twelve months. On average, those using trails spent $179, with 25% of users spending more than $200 per person.

By leveraging our natural landscapes, Canada can create regenerative recreational assets that build on Canada's brand as a premier outdoor, nature-based destination. Canada's growing network of trails, UNESCO World Heritage Sites, national and urban parks, and iconic destinations invite visitors to discover our rich urban spaces and remarkable rural and remote areas and communities. Fly-in hunting and fishing; snow-packed sledding trails; multi-day hiking, canoeing and camping adventures; and everyday “nature walks” get people into the great outdoors and sustain our rural communities.

A stepped-up focus on recreational tourism includes facilitating Canadian and international guests' access to natural spaces and helping disperse visitation both seasonally and geographically. It also provides an opportunity for a new Trails Tourism Strategy (see inset), supported by the Federal Tourism Growth Strategy, which will position trails as important assets among Canada's suite of outdoor experiences.

Canada's Trails Tourism Strategy

Attracting outdoor enthusiasts and adventure-seekers to Canada's trails promotes community development, employment, and cultural and historical preservation by increasing demand in local communities for food, lodging, equipment rental, tour guides, and other travel services. Canada's Trails Tourism Strategy will boost tourism by leveraging trails and related infrastructure and focusing on three key areas:

• High-quality inventory of trails  – Ensure our trails are maintained and our parks have modern amenities and the capacity to handle larger visitor groups while minimizing impact to our natural spaces.
• Market readiness  – Maintain and develop high-value experiences by encouraging the coordination and conservation of trails and surrounding amenities and training operators to be ready to welcome high volumes of visitors.
• Destination marketing and promotion  – Leverage the resources and expertise of Destination Canada and other marketing avenues to promote local trails, neighbouring communities, and related services.

As all orders of government work together to develop trails tourism in Canada, future growth should be supported by:

• Transparent governance structures to oversee trail development and maintenance, deliver connected services, and identify and connect with surrounding industries
• Coordinated guest management and host plans to address issues such as wayfinding, signage, parking, accessibility, washrooms or other facilities, and emergency services
• Accountability and governance requirements for assets that fall under the responsibility of multiple organizations. For example, landowners and trail stewards need to coordinate on trail maintenance so local communities can continue to benefit
• Connection to amenities, infrastructure, and tourism providers to support the guest experience – this includes accommodations, food and beverage facilities and other services, such as equipment outfitters

Continued investment from all orders of government in the development of our trail networks is needed to help with development, ongoing maintenance, infrastructure improvement, and supporting services. Through Budget 2022, the federal government committed $55 million over 5 years for the Trans Canada Trail for maintenance and enhancement of its network. Tourism programs, such as Budget 2023's investment of $108 million for local community projects, will help promote recreational tourism, particularly through investments in trails inventory and infrastructure that is guided by the principles above, to grow the treasures and icons Canadians, and visitors to Canada, love the most.

Canada is an ocean nation, and coastal and marine recreation is also an essential driver for the tourism sector. Activities such as sea kayaking, sports fishing, and scuba diving, as well as Arctic and inland waterway cruises, play an important role in the prosperity and diversification of many coastal and waterfront communities. By leveraging our maritime tourism assets more strategically, the sector can increase its contribution to Canada's blue economy – using ocean resources sustainably for economic growth while preserving the health of ocean ecosystems.

Leverage recreational opportunities and Canada's great outdoors

• Tourism programs, such as the Tourism Growth Program, can help to increase investments in recreational trails and can work with partner programs to enhance our national parks, with the aim of attracting more international and domestic tourists to remote and rural parts of Canada.
• Parks Canada is committed to creating a network of national urban parks in Canada's large urban centres via partnerships built on a shared vision to conserve nature, connect people with nature, and advance reconciliation. Supporting this effort will further improve and diversify tourism assets for cities and provinces alike.
• Canada is strengthening the tourism-nature relationship by investing directly in infrastructure and natural assets. Investments ranging from improving local and regional trails with support from Parks Canada, to diversifying community infrastructure, to building capacity of rural services, all contribute to a better outdoors experience.
• Federal efforts will help mitigate the impacts of climate-related disasters, better protecting communities and strengthening the resilience of recreational tourism and ecosystem services.

Before the pandemic, Indigenous tourism was the fastest growing segment in the Canadian tourism market, posting significant gains in job creation and contributions to Canada's GDP. Over half of its workforce identify as Indigenous. As such, many Indigenous businesses and communities have embraced this economic opportunity by developing new attractions.

Indigenous tourism offers visitors one-of-a-kind experiences to engage in the sharing of traditional knowledge, histories, stories, and cultural practices. Through these interactions and learnings, Indigenous communities can communicate and assert inherent rights while diversifying their economies for present and future generations.

Visitor surveys show a keen interest in authentic experiences led by Indigenous-owned businesses and organizations, particularly in the German, French, and British markets. A 2021 survey indicated that 1 in 3 international visitors wished to participate in Indigenous experiences while in Canada. Footnote 12 At the same time, most Indigenous tourism businesses operate in rural and remote parts of Canada, where visitor access can be challenging and costly. Meeting the anticipated demand for these unique tourism assets will require governments and industry to provide ongoing support and partnerships so that Indigenous tourism in Canada can gain even more international recognition.

Strengthen partnerships

• All orders of government have opportunities to enhance partnerships with Indigenous tourism organizations and Indigenous-owned businesses to ensure that Indigenous tourism is Indigenous-led.
• To boost the recovery of Indigenous tourism, Budget 2022 invested a total of almost $25 million in Indigenous tourism and created the Indigenous Tourism Fund.
• The new Tourism Growth Program, announced in Budget 2023, will further federal government investments in Indigenous tourism attractions through dedicated funding.
• The Government of Canada will continue its work to improve infrastructure, housing, healthcare, education, and economic, sustainable development and other opportunities for Indigenous communities.

Advancing economic prosperity, self-determination and reconciliation with First Nations, Inuit and Métis peoples is critical to Canada's future. Indigenous tourism can play an important role.

People travel from far and wide to participate in major events – including conferences and conventions, sporting events, festivals, and cultural events – and once they arrive, they stay and explore. That is why people travelling specifically for business events typically spend twice what those travelling for leisure spend. Footnote 13

Events happen all year round and across the country. An intentional approach to securing more international events as a four-season driver of travel will bring more visitors to our country and extend our tourism season. Canada has a proven track record of staging world-renowned events. As a northern country, we have the unique advantage of deep experience hosting winter festivals and games, from the Québec Winter Carnival to the 2010 Winter Olympics in Vancouver to Flying Canoë Volant in Edmonton and the Festival du Voyageur in Winnipeg.

The catalytic impact of business events – the case of Halifax, Nova Scotia

Atlantic Canada, and Nova Scotia in particular, is home to a strong cluster of ocean industries coupled with groundbreaking ocean research. The region is quickly becoming a globally recognized hub of oceans expertise with the potential to be a significant contributor to any number of global value chains associated with the core ocean sectors, including marine defence, marine energy, marine observation, fisheries and aquaculture technology, marine tourism, and marine transportation.

Halifax hosted the 2023 H2O: Home to Overseas Conference , the leading ocean technology conference in Canada. It was an ideal event for engaging with the ocean technology industry and included official international delegations from the U.K. and Germany. It featured presentations on research, development, and commercialization as well as presentations on working with the Canadian government; over 350 B2B meetings; and on-water demos at the Centre for Ocean Ventures & Entrepreneurship.

Internationally, the conference has grown from 14 represented countries in 2019 to 25 in 2021, with the 2023 conference attracting delegates from 38 countries and boasting attendance of over 700.

Major events also bring visitors to less-frequented parts of the country, creating growth opportunities for communities big and small. Flagship industry conferences, supported and enhanced by world-leading academic institutions and associations, reinforce regional tourism ecosystems, increase trade, drive business growth, and entrench Canada's expertise in areas such as agri-food, manufacturing, artificial intelligence, energy, and so much more.

Host more international events

• The federal government will collaborate with communities, municipalities, and provincial and territorial governments to increase efforts to attract major events to Canada.
• Planning will begin now to secure events for the medium and long term, with a focus on events that drive seasonal and regional dispersion.
• Governments and the tourism industry will work together to ensure that communities across the country have what they need to be exceptional Canadian hosts.
• The 2023 federal budget announced funding to Destination Canada of $50 million over three years to attract major international conventions, conferences, and events to Canada. Destination Canada has identified sports and culture as part of its overall events strategy and will explore partnerships with other government departments to attract more international sporting and cultural events to Canada.

Upcoming major international events coming to Canada

2023 North American Indigenous Games : July 15-23, Halifax and Millbrook, Nova Scotia World Firefighter and Police Games : July 28 to August 6, 2023, Winnipeg, Manitoba Invictus Games : February 2025, Whistler and Vancouver, British Columbia FIFA World Cup : June 11 to July 19, 2026

Photo credit: Stéphane Audet, Destination Québec cité

The Minister of Tourism is mandated to ensure that Canada remains a tourist destination of choice. Supported by Destination Canada, and in partnership with the tourism and hospitality sectors, we can do much to welcome the world. Given the sector's intersectionality and breadth, these efforts also engage over twenty other ministers whose mandates and departments include essential policy and program instruments in the federal tourism toolkit. Prominent among them are portfolios with responsibilities for employment and skills, regional and national economic development, parks, transportation, immigration, border services, and housing.

By better coordinating policies and strategies across government, we can address many of the issues the sector has identified and best position for growth. For instance, to solve workforce, border, and transportation challenges, it is critical for the federal government to better coordinate across departments as well as between different orders of government. Better government coordination will help drive better, faster, and more prioritized tourism growth and investments.

Align government policies and programs to grow tourism

• The Government of Canada will establish a Ministerial Tourism Growth Council to align with international best practices such as those of the United States and France. It will help put the Federal Tourism Growth Strategy into practice and ensure a whole-of-government approach to tourism growth and the visitor economy.
• Through its coordinating role, the Council will elevate the activities of the Canadian Council of Tourism Ministers to the wider federal level, creating greater connectivity among federal, provincial, and territorial governments.
• In parallel, the Government of Canada will continue to support Destination Canada's NorthStar partnership network. It brings together Canada's top destination marketing and management organizations from across the country to increase visitation, spending, and investment.

Part 4: Ambitious measures for success

This strategy represents a once-in-a-generation opportunity for Canada's visitor economy to build back stronger and compete on the global stage.

The WEF Global Travel and Tourism Development Index ranks countries based on a set of factors and policies that enable the sustainable and resilient development of the travel and tourism sector. The Index includes measures relating to a range of drivers, including price competitiveness, transportation infrastructure, cultural resources, non-leisure resources, travel and tourism demand, and environmental sustainability.

Some of the levers that affect Canada's ranking reflect the work of sectors, partners, and governments outside the tourism sector. For example, safety and security and healthcare services contribute to Canada's score as a global destination. Canada's success in these rankings will represent the culmination of work across governments and sectors.

Recognizing that our competitor nations are also investing in tourism, collaboration among partners and stakeholders across Canada, both within and outside tourism, is critical to achieving these targets and restoring Canada's international standing.

The government will monitor and evaluate the Strategy over time. The Tourism Data Collective led by Destination Canada will provide relevant tourism information and intelligence.

The Strategy will support and enhance the diversity and health of the sector through four guiding principles: provide support for Indigenous tourism, advance GBA+ analysis, address tourism's environmental impact, and support sustainable development goals.

Indigenous tourism

Indigenous tourism can be seen as a form of reconciliation in action. On the path to reconciliation, the federal government remains committed to working with First Nations, Inuit and Métis partners towards fulfilling the Truth and Reconciliation Commission's 94 Calls to Action. The Strategy will support the advancement of the Calls to Action, including:

• Education (7)
• Language and Culture (14)
• Commemoration (79)
• Sports and Reconciliation (90, 91)
• Business and Reconciliation (92)

Gender-based Analysis Plus (GBA+)

The Government of Canada is committed to reducing the barriers and inequities faced by many Canadians. To this end, the federal government has adopted a GBA+ lens to ensure that federal legislation, policies, programs and initiatives reflect and respond to the experiences of a diversity of Canadians.

Equity-seeking groups – including women, youth, 2SLGBTQI+ communities, newcomers, and racialized Canadians – form a significant proportion of the tourism workforce and are integral to the success of the tourism sector. The Strategy will continue to support GBA+ analysis and decision making that reduces potential barriers to participation of equity-seeking groups, including harnessing insights from statistical projects under way.

Environmental impact

In 2021, Canada increased its 2030 nationally determined contribution under the Paris Agreement to 40-45% reductions below 2005 levels by 2030 (445-408 Mt). In the same year, Canada enshrined into legislation its commitment to being net-zero by 2050 through the Canadian Net-Zero Emissions Accountability Act . In March 2022, the Government released the 2030 Emissions Reduction Plan (ERP), which shows a credible pathway to achieving Canada's enhanced 2030 target. The 2030 ERP includes ambitious and achievable measures to reduce emissions in each economic sector – from buildings, to transportation, to heavy industry and more – as well as other key enabling investments, such as in jobs and skills. Achieving net-zero emissions by 2050 is a whole-of-economy effort, and every sector, including tourism, has a role to play.

Collaboration with our partners and support for critical initiatives, such as the UNWTO's initiative Towards a Statistical Framework for Measuring the Sustainability of Tourism , will provide additional guidance on sustainability and establish tourism-specific targets.

Sustainable Development Goals

The Government of Canada has committed to advancing the 17 Sustainable Development Goals (SDG) established by the UN to address the most pressing social, economic and environmental challenges.

The UNWTO states that tourism can contribute, directly or indirectly, to all SDGs, but in particular it has been included in targets for inclusive and sustainable economic growth (SDG 8), and sustainable consumption and production (SDG 12), respectively.

To respect our commitments, we will ensure that tourism policies and programs align with the following SDGs:

• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation and Infrastructure
• SDG 11: Sustainable Cities and Communities
• SDG 12: Responsible Consumption and Production
• SDG 17: Partnerships for the Goals

The federal government's support for tourism is a clear commitment towards building a stronger, more inclusive, and productive economy for all Canadians. A number of federal departments and agencies are responsible for policies and programs critical to this effort and are committed to working together on many new initiatives outlined below.

Exploring Canada and accessing our world-class tourism destinations

At the heart of the tourism industry: our businesses, our people, and our diversity, economic reconciliation with indigenous peoples through tourism, support for canada's world-class festivals and events, protecting canada's natural wonders.

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New Delhi [India], April 23 (ANI): Morgan Stanley is firm on India’s growth outlook, given the support it is getting from domestic demand. Citing high-frequency data, the global investment banking firm said it remains constructive on the growth outlook.

Against that backdrop, it expects India’s GDP growth to be at 6.8 per cent in the current financial year 2024-25 and 6.5 per cent in 2025-26.

On the macro side, it anticipates headline inflation to remain supported by favourable base effects. It projected inflation to remain in a range of around 5 per cent in the second quarter, before moderating to 4.1 per cent year-on-year in the second half of 2024.

For the next financial year, it expects retail inflation to average 4.5 per cent.

Similarly, the current account deficit is likely to remain benign, supported by strength in service exports, and remain within the policymakers comfort zone at 1-1.5 per cent of GDP in 2025-26.

On monetary policy, it expects policy rates to remain steady at 6.5 per cent in the horizon.

“This is on the back of a shallower and deferred rate cut cycle for the Fed on the global front and improving productivity growth, a rising investment rate and inflation tracking above the target of 4 per cent on the domestic front,” it explained.

Inflation continues to remain the main concern for the Reserve Bank of India’s monetary policy committee members before it goes ahead and loosens its stance on key interest rates. As per the minutes of the latest monetary policy meeting released on Friday, there have been several mentions of uncertainties around inflation. Going ahead, food price uncertainties would continue to weigh on the inflation outlook, it said.

Pressure in food prices has been interrupting the ongoing disinflation process in India, and posing challenges for the final descent of inflation trajectory to the 4 per cent target.

The RBI is currently focused on bringing down the inflation to 4 per cent target on a durable basis.

Retail inflation in India is in RBI’s two-six per cent comfort level but is above the ideal 4 per cent scenario. In March, it was 4.85 per cent. Inflation has been a concern for many countries, including advanced economies, but India has largely managed to steer its inflation trajectory quite well.

Meanwhile, along anticipated lines, RBI kept the policy repo rate unchanged at 6.50 per cent earlier this month, the seventh time in a row. The repo rate is the rate of interest at which the RBI lends to other banks.

Barring the latest pauses, the RBI raised the repo rate by 250 basis points cumulatively to 6.5 per cent since May 2022 in the fight against inflation. Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.

India’s economy grew 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22, respectively. As per the second advance estimates, real gross domestic product (GDP) expanded at 7.6 per cent in 2023-24 on the back of buoyant domestic demand.

India is set to remain the fastest-growing among major economies in 2024, according to the International Monetary Fund’s latest World Economic Outlook. (ANI)

This report is auto-generated from ANI news service. ThePrint holds no responsibility for its content.

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