🏛 Why Do Governments Care About Tourism?
Tourism doesn't just happen on its own. Behind every major tourist destination, there's usually a government pulling strings building airports, promoting the country abroad, setting rules for hotels and deciding who gets to visit. Governments at national, regional and local level all play a huge role in shaping tourism development.
But why do they bother? The answer comes down to two big areas: economics and politics. Tourism can make a country richer, create jobs and boost a government's popularity. It can also be used to build relationships with other countries, project national pride and even control how the world sees a nation.
Key Definitions:
- Government objective: A goal or aim that a government sets out to achieve through its policies and actions.
- Tourism policy: A set of rules, plans and strategies that a government uses to manage and develop tourism.
- National Tourism Organisation (NTO): A government body responsible for promoting and managing tourism at a national level (e.g. VisitBritain, Tourism Australia).
- Foreign exchange earnings: Money brought into a country by international tourists spending in a foreign currency.
- Multiplier effect: When tourist spending circulates through the local economy, creating additional income and jobs beyond the initial spend.
💡 Did You Know?
According to the World Travel and Tourism Council (WTTC), tourism contributes around 10% of global GDP and supports 1 in 10 jobs worldwide. It's no wonder governments take it so seriously!
💵 Economic Objectives of Government Tourism Policy
The most obvious reason governments invest in tourism is money. Tourism can be a massive earner especially for countries that don't have oil, minerals, or large manufacturing industries. Let's break down the main economic objectives.
📈 1. Generating Foreign Exchange Earnings
When an international tourist visits a country, they spend money on hotels, food, transport, souvenirs and activities. This money comes in from abroad, which helps a country's balance of payments (the difference between money coming in and money going out of a country).
For developing countries in particular, tourism can be one of the biggest sources of foreign currency. This money can then be used to pay for imports, repay debts, or fund public services.
🔍 Case Study: The Maldives 🏈
The Maldives is a small island nation in the Indian Ocean with very few natural resources beyond its stunning beaches and coral reefs. Tourism accounts for roughly 28% of its GDP and over 60% of its foreign exchange earnings. The government has actively developed luxury resort islands, invested in international airports and marketed the Maldives globally as a premium destination. Without this deliberate government strategy, the country's economy would struggle enormously. This shows just how central foreign exchange earnings are as a government objective.
👥 2. Creating Employment
Tourism is a labour-intensive industry it needs lots of people to run hotels, restaurants, tour companies, transport services and attractions. Governments often target tourism development in areas of high unemployment, hoping to create jobs for local people.
Jobs in tourism range from low-skilled (cleaning, catering) to highly skilled (hotel management, marketing, guiding). Governments may invest in training programmes to help local people access better-paid roles in the industry.
✅ Direct Employment
Jobs directly in tourism businesses hotel staff, tour guides, airline crew, theme park workers. These are the most visible tourism jobs.
👥 Indirect Employment
Jobs in industries that supply tourism businesses food producers, laundry services, construction companies building hotels, transport firms. Tourism spending ripples outward through the economy.
🏢 3. Encouraging Regional Development
Governments often use tourism to develop poorer or more remote regions of a country. By building infrastructure (roads, airports, utilities) and promoting lesser-known areas, governments can spread economic benefits beyond the capital city or main tourist hotspots.
This is sometimes called regional development policy using tourism as a tool to reduce inequality between different parts of a country.
🔍 Case Study: Spain's Paradors ⛰️
Spain's government runs a chain of state-owned hotels called Paradors, many located in historic castles, monasteries and palaces in rural or less-visited areas. The scheme was originally launched in 1928 to attract tourists to remote regions and boost local economies. Today there are over 90 Paradors across Spain. The government subsidises some of these properties to keep them open, even when they're not highly profitable, because the wider economic benefit to the surrounding region justifies the cost. This is a brilliant example of government using tourism for regional development.
💷 4. Diversifying the Economy
Some countries rely heavily on a single industry oil, mining, agriculture. This is risky: if that industry collapses, the whole economy suffers. Governments often promote tourism as a way to diversify (spread) their economic base, so they're not dependent on just one sector.
This is especially important for small island states and oil-rich nations that know their natural resources won't last forever.
🔍 Case Study: Saudi Arabia 🏛 Vision 2030
Saudi Arabia has historically depended almost entirely on oil revenues. Knowing that oil won't last forever, the Saudi government launched Vision 2030 an ambitious plan to transform the economy. Tourism is central to this plan. The government is investing billions in new mega-projects like NEOM (a futuristic city), the Red Sea Project (luxury coastal resorts) and AlUla (a heritage and culture destination). Saudi Arabia only opened to international tourists in 2019. The government aims to attract 150 million visitors per year by 2030. This is economic diversification on a massive scale, driven entirely by government policy.
📈 5. Increasing Government Tax Revenue
Tourism generates tax income for governments in several ways: VAT on tourist spending, airport taxes, hotel taxes, visa fees and corporation tax from tourism businesses. This revenue can be used to fund schools, hospitals and infrastructure.
Some governments have introduced specific tourist taxes small charges paid by visitors to raise funds for managing tourism's impacts. For example, Barcelona charges a nightly tourist tax and Bhutan charges a daily visitor fee of $200.
🏛️ Political Objectives of Government Tourism Policy
Beyond economics, governments also use tourism for political purposes. This might sound surprising, but tourism is a powerful tool for shaping how a country is seen by the rest of the world and for achieving political goals at home and abroad.
🌎 1. Improving International Relations and Soft Power
Soft power is the ability to influence other countries through attraction and persuasion rather than military force or economic pressure. Tourism is a key part of soft power when tourists visit a country, they go home with (hopefully) positive impressions, which can improve diplomatic relationships and cultural understanding.
Governments invest in tourism promotion abroad partly to build goodwill and strengthen ties with other nations. Tourism can open doors to trade deals, political alliances and international cooperation.
🔍 Case Study: China's Tourism Diplomacy 🏴
China has used tourism strategically to build international relationships. The government has invested heavily in promoting Chinese culture abroad through Confucius Institutes and cultural tourism programmes. At the same time, China has encouraged outbound tourism Chinese tourists spending money abroad as a diplomatic gesture to strengthen trade relationships. The number of Chinese outbound tourists grew from 10 million in 2000 to over 150 million by 2019, making China the world's largest source of outbound tourism spending. Governments in destination countries actively court Chinese tourists partly for economic reasons, but also to maintain good political relations with Beijing.
🎉 2. Enhancing National Image and Prestige
Governments use tourism and especially mega-events like the Olympics, FIFA World Cup, or Expo to project an image of national success, modernity and prestige on the world stage. Hosting a major international event tells the world: "We are a capable, modern, important nation."
This is sometimes called "nation branding" using tourism and events to shape how the world perceives a country.
🏆 Qatar 2022 FIFA World Cup
Qatar spent an estimated $220 billion on infrastructure for the 2022 World Cup far more than any previous tournament. The government's aim was not just to host football matches, but to announce Qatar as a major global player and attract long-term tourism investment. The event was deeply political as well as economic.
🏛 Dubai Expo 2020
The UAE hosted Expo 2020 in Dubai (delayed to 2021 due to COVID-19). The government saw it as a chance to showcase UAE's ambition and diversity to the world, attract foreign investment and boost tourism. Over 24 million visits were recorded during the event.
🔒 3. Controlling Tourism for Political Purposes
Not all governments want to maximise tourism. Some use restrictions on tourism as a political tool limiting who can visit, where they can go and what they can see. This can be used to control the flow of information, protect political systems, or manage relationships with rival nations.
North Korea is the most extreme example: the government tightly controls all tourism, allowing only small numbers of visitors on strictly supervised tours. Tourists cannot move freely, speak to locals, or photograph certain things. Tourism here is used as a propaganda tool showing visitors only what the government wants them to see.
Cuba is another example where the government has historically managed tourism carefully to control foreign influence while still earning foreign currency.
⚖️ 4. Political Stability and Tourism as a Peace Tool
Governments sometimes promote tourism to build peace and stability both within a country and between countries. When people from different nations visit each other, they develop understanding and empathy, which can reduce conflict. This idea is sometimes called "tourism as a peace industry."
After periods of conflict or political instability, governments often invest heavily in tourism recovery as a signal to the world that the country is safe, open and moving forward. This helps restore investor confidence and international relationships.
🔍 Case Study: Rwanda 🌿 Tourism After Conflict
Rwanda suffered a devastating genocide in 1994. In the years that followed, the government made tourism particularly gorilla trekking in Volcanoes National Park a central part of its national recovery strategy. Permits to see mountain gorillas cost $1,500 per person, with revenue going directly to conservation and local communities. The government positioned Rwanda as a safe, green, premium destination. By 2019, tourism was Rwanda's top foreign exchange earner, bringing in over $498 million annually. Tourism helped rebuild Rwanda's international image and supported political stability by reducing poverty and giving communities a stake in conservation. This is a remarkable example of government using tourism for both economic and political objectives simultaneously.
⚖️ Tensions and Trade-offs in Government Tourism Objectives
Government objectives don't always sit neatly together. Sometimes economic and political goals conflict with each other, or with environmental and social concerns. Governments have to make difficult choices.
💵 Economy vs Environment
Maximising tourist numbers boosts income but can damage the environment that tourists come to see. Governments must balance growth with sustainability.
🏛 Prestige vs Authenticity
Building luxury resorts and mega-projects can attract wealthy tourists but may destroy local culture and displace communities undermining the very thing that made the place special.
🌎 Openness vs Control
Opening up to international tourism brings economic benefits but also exposes a country to foreign cultural influences, which some governments find politically uncomfortable.
💡 Key Exam Point: The Role of NTOs
Governments usually deliver their tourism objectives through a National Tourism Organisation (NTO). Examples include VisitBritain (UK), Tourism Australia and Incredible India (India's tourism campaign). NTOs are responsible for marketing the country abroad, setting tourism standards, collecting data and coordinating tourism policy. In exams, you may be asked to explain how governments use NTOs to achieve their economic and political objectives so make sure you can link the two together.
📚 Summary: Government Economic and Political Objectives
💵 Economic Objectives
- Generate foreign exchange earnings
- Create employment (direct and indirect)
- Encourage regional development
- Diversify the economy
- Increase tax revenue
🏛 Political Objectives
- Build soft power and improve international relations
- Enhance national image and prestige
- Control tourism for political purposes
- Use tourism as a tool for peace and stability
- Nation branding through mega-events
🌟 Exam Tips
- ✅ Always link government objectives to specific examples examiners love named case studies with real data.
- ✅ Remember that economic and political objectives often overlap hosting the Olympics is both an economic and a political decision.
- ✅ Be ready to evaluate: government tourism objectives don't always succeed. Think about what can go wrong (e.g. over-tourism, political backlash, environmental damage).
- ✅ Know the difference between direct and indirect employment this often comes up in exam questions about economic benefits.
- ✅ The multiplier effect is a key concept tourist spending doesn't just benefit one business, it ripples through the whole economy.