Question

Textbook Discussion: The Economic Impact of Tourism & The Multiplier Effect

Define both concepts

What is the economic impact of tourism on San Diego?

What is TOT tax?

Check out this link from the San Diego Tourism Authority:

https://www.sandiego.org/about/industry-research.aspx

Please review the topic in the textbook and discuss. You may use the textbook as a reference for this assignment but you must use a second reference source.

Answer 1

San Diego, the county of the state of California, is well-known for extensive beaches, round the year mild climate and natural deep-water harbor. The travel Industry of San Diego is the backbone of the state of California in the US.

Potential and Power of the tourism sector of San Diego

The abobe-mentioned statement--Tourism of San Diego is the backbone of the economy of State of California-- can be proved by facts and figures.California is divided into 58 counties and the real GDP of California was 2.79 trillion U.S. dollars in the year 2019. However, the volume of annual visitor spending was worth $11.6 billion merely by one county i.e. San Diego (out of 58 counties in California). In the tax exchequer of the state of California, nearly $329 million was contributed by the tourism industry of Sand Diego only (out of 58 counties in California).

Coming to employment, the tourism industry of San Diego provides employment to nearly 2 lakh people directly out of 3.3 million people living in San Diego in the year 2020.

In 2014, San Diego was accorded the status of the best city in the United States to launch a small business or startup company.

$306 Million worth TOT (Transient Occupancy Tax) was collected from the San Diego only.

What is TOT?
The Transient Occupancy Tax (TOT), often called bed tax, is a rent charged to transient guests in hotels/motels that including properties rented through home sharing services.

The population of San Diego county is 3.3 million and it is a surprising fact that 35.1 million tourist visited San Diego in the year 2020.

Tourism related Facts and Figures of the United States of America

Out of GDP of $22.32 trillion of the United States of America recently "Travel & Tourism Industry of the United States" generates $2.5 trillion in economic output (nearly 12.9% of GDP) and provides employment to 15.7 million U.S. people (1 job in 10 jobs in the US ). Moreover, Travel Industry ranks number six (in terms of employment)when compared to other major private industry sectors.

Multiplier Effect in Travel Industry of the United States of America

What is Multiplier effect that can also be observed in the tourism industry of San Diego?

Multiplier effect comes within the domain of economics in which an increase in spending produces an increase in national income and consumption that is greater than the initial amount spent. For Instance, if a Government builds a factory, it will include those who work in the factory as well as construction workers and their suppliers. Indirectly, the new corporation will augument employment in restaurants, laundries, and service industries in the factory's vicinity.