Define Multiplier effect of tourism .

The multiplier effect of tourism refers to the economic phenomenon where an initial injection of spending in the tourism sector leads to multiple rounds of additional spending and economic activity within a destination. When tourists spend money on accommodations, meals, transportation, and attractions, this money circulates through the local economy, benefiting various businesses and individuals.

The multiplier effect occurs because the income generated from tourism spending does not stay confined to the original businesses that directly serve tourists. Instead, it ripples through the economy as these businesses pay their employees, purchase goods and services from other local businesses, and reinvest profits. This leads to increased employment, income, and economic development in the destination.

For example, when a tourist stays at a hotel, the hotel pays its staff, purchases food from local suppliers, and invests in maintenance services. The employees and suppliers then spend their income on groceries, housing, entertainment, and other goods and services, further stimulating economic activity. The multiplier effect amplifies the impact of tourism spending, making it a vital driver of economic growth and development in many destinations.