Unit 13 - Page 440 - 445

What is meant by "economic leakages" in tourism?

• The increase in local job opportunities due to tourism

• The loss of tourism revenue to foreign-owned businesses

• The positive economic impact of tourists spending money locally

• The cycle of reinvestment within the tourism industry

Answer explanation

Answer: B) The loss of tourism revenue to foreign-owned businesses
✅ Explanation: When tourists spend money in a country, but a large portion of it goes back to foreign companies (e.g., airlines, international hotel chains), this is called economic leakage.
Example: A tourist visits Thailand and stays at a big international hotel chain. Most of the money they pay for the hotel room goes to the hotel's headquarters in another country rather than to the local economy.

How much of the money spent on tourism in LICs and MICs is estimated to leak back to HICs?

• 10-20%

• 30-40%

• 60-75%

• 80-90%

Answer explanation

Answer: C) 60-75%
✅ Explanation: A large percentage of the money tourists spend in developing countries actually goes to companies in wealthier countries, rather than benefiting the local people.
Example: A tour package booked in the UK for a safari in Kenya might include flights, hotel stays, and meals—all provided by foreign companies, meaning most of the money never stays in Kenya.

The "multiplier effect" in tourism refers to:

• The increase in economic benefits as tourism spending circulates through local businesses

• The rise in the number of tourists visiting a destination each year

• The reduction of negative environmental impacts through eco-tourism

• The decline in tourism income due to seasonality

Answer explanation

Answer: A) The increase in economic benefits as tourism spending circulates through local businesses
✅ Explanation: Money spent by tourists helps local businesses, and that money then supports other businesses and workers, creating a chain reaction.
Example: A tourist eats at a locally owned restaurant, which then pays local farmers for ingredients, who then hire more workers—helping the economy grow.

Which of the following is a major advantage of the multiplier effect?

• It discourages local entrepreneurship

• It boosts multiple sectors of the local economy

• It increases economic leakages

• It reduces job opportunities in tourism

Answer explanation

Answer: B) It boosts multiple sectors of the local economy
✅ Explanation: Instead of benefiting only hotels and tour companies, tourism spending also supports farmers, shop owners, and transportation services.
Example: A guesthouse in a small village buys vegetables from local farmers, hires local staff, and uses local construction workers for renovations—helping the entire community.

What is a major downside of economic leakages in LICs and MICs?

• It prevents infrastructure development

• It ensures profits stay within the country

• It reduces the overall benefit of tourism for local communities

• It encourages domestic tourism

Answer explanation

Answer: C) It reduces the overall benefit of tourism for local communities
✅ Explanation: If most of the money from tourism leaves the country, it does not help local people as much as it could.
Example: A resort in the Maldives is owned by a foreign company, and most profits go overseas rather than to Maldivian workers and businesses.

Niche tourism refers to:

• Mass tourism that attracts millions of visitors

• Tourism that focuses on specialized interests or experiences

• Government-controlled tourism to reduce environmental impact

• Tourism exclusively targeting business travelers

Answer explanation

Answer: B) Tourism that focuses on specialized interests or experiences
✅ Explanation: Instead of mass tourism (large groups visiting famous destinations), niche tourism targets smaller groups with specific interests.
Example: People going on birdwatching tours, scuba diving trips, or historical battlefield tours are part of niche tourism.

Which of the following is NOT an example of niche tourism?

• Cultural and historical tourism

• Medical and therapy tourism

• Large-scale beach resort tourism

• Wilderness and ecotourism

Answer explanation

Answer: C) Large-scale beach resort tourism
✅ Explanation: Niche tourism is small and specialized, while large resorts focus on mass tourism.
Example: A yoga retreat in Bali is niche tourism, but an all-inclusive beach resort with thousands of guests is not.

The concept of a "destination footprint" in tourism relates to:

• The number of tourists who visit a location annually

• The economic impact of tourism on local businesses

• The environmental and social impact of tourism on a location

• The popularity of a destination on travel review sites

Answer explanation

Answer: C) The environmental and social impact of tourism on a location
✅ Explanation: A destination footprint measures how tourism affects nature and local culture.
Example: Too many tourists in Venice cause pollution, damage historical buildings, and raise housing prices for locals.

How can the destination footprint of tourism be reduced?

• Encouraging mass tourism

• Increasing the number of large-scale resorts

• Promoting sustainable tourism practices

• Allowing unlimited tourist access to sensitive areas

Answer explanation

Answer: C) Promoting sustainable tourism practices
✅ Explanation: Sustainable tourism aims to protect nature and culture while still allowing visitors.
Example: Encouraging visitors to use reusable water bottles and stay in eco-friendly hotels.

What is the primary goal of sustainable tourism?

• Maximizing profits for large travel corporations

• Reducing environmental, social, and cultural harm while supporting local communities

• Expanding tourism destinations as quickly as possible

• Encouraging only domestic tourism

Answer explanation

Answer: B) Reducing environmental, social, and cultural harm while supporting local communities
✅ Explanation: Sustainable tourism ensures tourism does not destroy what makes a place special.
Example: Limiting the number of visitors to Machu Picchu to prevent damage to ancient ruins.