Benefits of Tourism in Singapore

Benefits of Tourism in Singapore 1.0Â   Introduction 1.1 Definition of Tourism industry Tourism refers to the movement of people from different social and cultural background travelling out of their usual environment staying in a different place for business, personal, or professional reasons. These people are commonly referred to as tourist. Their actions in the country they visit affects the local economic market as they carry out their activities, as most of which may require them to spend money thus increasing the expenditure in the local markets which in turns boosts the GDP of the respective country (Media.unwto.org, 2014b). Therefore the tourism industry is formed to cater to the needs and demands of locals and tourists in terms of products and services and is defined as such in this report. 1.2 What does the tourism industry mean to Singapore? As Singapore lacks natural resources, the tourism industry serves as an integral factor that acts as a crucial pillar for the economy of Singapore. It contributes an estimated 4% to the gross domestic product of Singapore and also provides jobs to about 160,000 people. The tourism industry serves to reaffirm Singapore’s position as a global cosmopolitan city that is dynamic, able to cater to the locals’ and tourists’ demands for leisure, entertainment, giving consumers enhanced quality and diversity in terms of leisure creating a wider range of options creating a vibrant living environment that Singaporeans can proudly call home (Stb.gov.sg, 2014). 2.0Â   Economic Impact Analysis Four types of Economic Impacts that Tourism have on the economy 1-Direct contributions Tourism’s direct contributions are results of revenue earned from tourists’ expenditure by businesses like hotels, restaurants, retail outlets, transportation services, cultural / sports and recreational services. 2-Indirect contributions Some of the indirect contributions derive from investment spending from the businesses of the travel and tour ism, Government expenditure in the form of investment to improve or enhance the industries. 3-Induced contributions The direct and indirect employees involved in this sector then in turn contributes to the consumption by spending their wages on food and beverages, recreational activities, clothes, housing and household goods. 4-Total contributions Therefore the total contributions from the direct, indirect and induced contributions will in turn affect the GDP and the employment rate as they affect various factors of the GDP equation which also affects the production rate thus increasing the GDP and employment rate in a situation when there is an increase in revenue and demand from tourist and with certis paribus assumed. 2.1 Contributions to Singapore’s GDP The latest press release by UNWTO World Tourism Barometer, shows that expenditure receipts international visitors spent on food and beverages, services, entertainment, accommodations and much more totaled up to an estima ted SGD$ 1,455 billion during 2013. And that the growth rate of receipts experienced a 5% increase from 1035 million during 2012 to 1087 million during 2013(Media.unwto.org, 2014a). According to an economic report by Singapore’s Travel and Tourism Economic Impact report 2014, in 2013 travel and tourism’s direct contribution to Singapore’s GDP was SGD$ 19.1 billion (5.3% of total GDP) Singapore’s GDP. Its GDP contributions in 2014 is expected to experience a 5.8% increase, and also to experience a 3.4% increase per annum, as of 2014-2024, to SGDS$ 28.3 billion as of totaling a 5.3% of the total GDP in 2024 (World Travel and Tourism Council, 2014).