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Tourism Industry: Business Analysis

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Tourism is one of the world's fastest developing industry. People are traveling every day and do not even think about how they influence on tourism sector. Nevertheless, in the begging it is worth to explain what tourism is. Boniface and Cooper (1987) define tourism as ‘the temporary short term movement of people to destinations outside their normal home and workplace, the activities undertaken during the stay, and the facilities created to cater for their needs’. According to Godfrey and Clarke (2000), tourism can bring many economic and social benefits into destination, such as job creation and money income. In addition to these benefits, tourism can also save national heritage, protect the environment and improve the quality of the life …show more content…

In 2013, 1.94 million foreign tourists stayed overnight in the accommodation establishments of Estonia. Compared with 2012, their number expanded by 3.6%. This mass of tourist has significantly affected Tallinn economy. As stated by Godfrey and Clarke (2000), when travellers spend their wages on goods and services, it leads to ‘multiplier effect’, generating more jobs. This allows creating new working places within the tourism sector, such as retail and transportation. As well as to develop small-scale business enterprises, which are particularly vital in rural communities. Mass tourism affects not only on salaries and on employment opportunities, but as claimed by Godfrey and Clarke (2000), causes incomes for public and private sector. An increase of cash flow to the region including the inflow of foreign currency leads to a positive economic development. However, there is also a negative impact of mass tourism on Tallinn’s economy. If region will be over-dependant from the tourism sector, it could lead to economy drop in case of unsuccessful tourism season. Small-scale business can fold up and people could lose their seasonal jobs. Furthermore, jobs сreated by tourism are often seasonal and poorly paid, yet tourism can push up local property priсes and the сost of goods and serviсes. Cash created by tourism does not always benefit the local сommunity, as some of it leaks out to huge international сompanies, such as hotel

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