What Factors Affect the Economic Impact of Travel and Tourism

Nowadays, travel has become one of the most popular activities. If you ask someone whether they want to travel, almost everyone would answer "yes". Meanwhile, travel and tourism industry has become one of the most robust industries, without surprise. Since travel and tourism industry is a compound industry, which consists of airline, hotel, retail trade, and many other industries, it actually has a huge impact on a nation's economy. World Travel & Tourism Council's latest annual research shows travel and tourism's contribution to world GDP grew for the fourth consecutive year, rising to a total of 9.5% of world GDP (US$7 trillion). So it is meaningful to think about what factors actually affect travel and tourism's contribution to GDP. Extensive researches have been conducted regarding the contribution of travel and tourism to GDP and economic growth using different kinds of methodologies. However, few of them focus on determining the factors behind it. Using data from over 180 countries, this paper aims to investigate both the direct and the total contribution of travel and tourism to GDP in absolute and relative values.