Topics: Tourism, Economics, Gross domestic product Pages: 12 (3914 words) Published: November 12, 2013


HTM 3213


Name and Student ID: YEONG WOOI CHYNG 0311922
Batch and Group: BH 4 Group 7
Submission Date: 17th OCTOBER 2013

Students are required to form in a group of five to conduct an analysis of economic impact of tourism industry in a country or region. Evaluating the tourism impact analysis of the location selected is the main task of this assignment. Besides that, students are also required to discuss the spillover effects of tourism sector to the other sectors of the economy which means the leakages of the economy. Students had chosen Singapore as the country for this study. Tourism industry is the world’s largest dynamic economic sectors in many countries contributor to the Singaporean economy. It is constantly improving infrastructure, natural connectivity, skilled workforce, good labor-employer relations, political stability, favorable tax regime, and strong rule of law have all contributed to the country’s competitive advantage, enabling the Singapore economy to grow consistently and rapidly over the past four decades. Many of these factors continue to help drive the country’s economic development and growth. According to Chief Executive of Singapore Tourism Board, it is stated in the annual report 2012 that the government is investing a huge amount of capital as for Tourism Development Fund to support the growth of tourism sector and to heighten interest in Singapore as a tourism destination as well. Thus, Singapore is one of the countries that the tourism industry is growing significantly. Impact Analysis

1. What is impact analysis and various methods used to measure them
Impact analysis is to identify the consequences due to the changes of phenomena such as economic and business. It is an important tool which assists the firm to measure and evaluate the negative impacts or consequences of the changes occurred. This analysis may help the organization to prevent the issues and problems which may be raised and the organization could prepare well to solve the issues as well. To conduct an effective impact analysis, an excellent team is a necessary element as to collect the data and information needed is a challenging task. They must have the ability to search the information as well as the ability to forecast the consequences based on their experiences.

Various methods used to measure impact analysis:
1. Input-output models:
In impact analysis, input-output (IO) model is the common used method to measures or evaluating where the spending has greatest benefits in one region by using some tables. IO can be very powerful and helpful tool for predicting or forecasting the future performance. To make the IO tables, some points that required are direct, indirect and induced effects.

From the picture shown above as example, it tells that household (individuals/families residing in area) is the one who supplying on labors as an input to the businesses 1 and by income that they generate from that business, this household spend it on goods and services as an output from that business. This relationship is also known as direct effect. While indirect effect is a relationship between the businesses 1 and businesses 2, which businesses 2 are the other new local industries (supplier) for businesses 1 to make and produce their own goods. This indirect effect also creates induced effect where these new employees spend their new income from that new business within the community. 2. A Simple Formula

Economic Impact of Tourism = Number of Tourists * Average Spending per Visitor * Multiplier The formula suggests three distinct steps:
a) Estimate the number and...

References: 1. Daniel J. Stynes, n.d., Economic Impacts of Tourism. [online] Available at: [Accessed 5th October 2013].
2. Fui Ting Phang, 2011, Economic Impact of the Oklahoma Manufacturing Sector. [online] Available at: [Accessed 9th October 2013].
3. Thane H. and Charlie F., n.d., An Introduction to Fiscal Impact Analysis. [online] Available at: [Accessed 9th October 2013].
4. Tilak Abeysinghe, 2007, Singapore: Economy. [online] Available at: [Accessed 9th October 2013].
5. Ottawa, 1998, Benefit-Cost Analysis Guide. [online] Available at: [Accessed 9th October 2013].
6. Anon., 2012, Travel & Tourism Economic Impact 2012 Singapore. [online] Available at: [Accessed 5th October 2013].
7. Zamora J, n.d., Input-Output Model. [online] Available at: [Accessed at: 15th October 2013]
8. McNay A, 2013, Input-Output Models and Economic Impact Analysis: What they can and cannot tell us. [online] Available at: [Accessed at: 15th October 2013]
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