Tourism is mostly trade

Industrialism is the high margin field in commerce.  Clientrism and trade generate only small multipliers.  An industrial company can employ millions of people; not true of clientrism or trade.

The pure case is Maui, an island mostly populated with trade and clientric businesses.

Maui is more than a pure case, it is a “best case” because the average tourist stays a whole week, rents a car and has no relatives in Maui. Most of the money stays in Maui, only a small fraction is shifted back to headquarters companies. This compares with Disneyland or Disney World where people only stay for one day and most profit goes to headquarters.  There is virtually no other business in Maui than tourism, the farms produce sugar and pineapple worth less than 10% of the island’s total revenue and employ very few people. 

Here are the facts: 2.3 million tourists spend $2.5 billion dollars which supports 115,000 people permanently living on the island of Maui.  Of the 115,000 residents, 55,000 work.  The rest don’t work; 27,000 are under 18 years old, 12,000 are over 65 years old. 

I would guess that just as much money for the seniors comes from savings outside Maui as the money that leaves Maui for royalties to large industrial companies outside of Maui.

Of the $2.5 billion that the tourists spend,  $1.0 billion is spent on hotel and condo lodging, which directly supports 10,000 workers.  Local transportation expenditures are half a billion dollars and support 5,000 transit drivers and other related workers.  Another three-quarters of a billion dollars is spent on food, one third in restaurants, creating jobs for 3-4,000 cooks, waiters and other food service staff.

Summary: in the contemporary American world we can state pretty clearly that in an environment where nearly all business is trade and clientrism that $20,000 will support one working person. That one person will provide for the living of one other person whether child or retiree.

Put another way; Tourism worth $100 million could only support a village of 5,000 Americans because tourism is largely a trade and clientric form of commerce.

Comments

[Jack Feka]

I wouldn't argue with your figures nor your premise about the impact of tourism on a local economy.

However, there's another aspect of the tourist business which recently has come into my mind, and I find it disturbing.

Rather than leave it as a comment here, I've posted these thoughts in a blog posting entiled A dream world vs a better reality [LINK]

It may give you some food for thought.