Economic impact analysis is used to determine the effects of additional tourist spending primarily on employment, income (value-added) and government tax revenues in an economy. It provides a...
Description
Economic impact analysis is used to determine the effects of additional tourist spending primarily on employment, income (value-added) and government tax revenues in an economy. It provides a snapshot of the economy at a particular point in time based on the initial spending. It is based on the premise that initial or direct effects alone are poor measures of the total impact of tourism on the economy. It is often the case that indirect and induced effects are just as large, if not greater, than direct effects and frequently involve sectors and activities distantly, but importantly, connected to the initial activity. Let's suppose a tourist travels to Alberta and spends $100 at a gas station in Alberta. In an economic impact analysis, the focus is not on the amount of sales (in this case $100), but rather the impact of those sales on the provincial/regional economy.