Economic basics of tourism

Abstract

This paper sets out to discuss the potential of tourism as a development instrument for underdeveloped economies. This is done by drawing on economic theory as well as evidence from the real world. While it is acknowledged that tourism development is one of the growth options for these countries, it is a policy often pursued against a background of a narrow resource base and serious balance of payments difficulties. However, only by observing sound economic principles can tourism be expected to achieve its economic goals.