Make or break: 4 reasons why countries should not dismiss domestic tourism

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Japan

Mention tourism, and it’s likely that most people will think of far away, exotic destinations: palm trees, snowy mountain tops, safaris…etc.

In fact, most of the world’s tourism happens closer to home, in a traveller’s own country. According to WTTC analysis, more than 7 out of every 10 dollars spent on tourism are spent domestically.

This means that in many parts of the world, money spent by national citizens is a much more important source of Travel & Tourism GDP than the visitors who come from abroad.

Out of twelve world regions, there are only three in which international tourism spending makes up a larger portion than domestic spending. Not surprisingly, international spending has the largest share in the island region of the Caribbean, where domestic spending makes up just over a quarter of the total. In the Middle East and Southeast Asia it is relatively balanced, with just over half of it coming from international visitors. In the rest of the regions, domestic spending is the main factor. In Latin America, over 82% of spending is domestic.

While it may be natural for discussions at a global level to tend toward focusing on international tourism, domestic tourism is clearly a key driving force in the sector. And it’s a strong force, which has several benefits and advantages that should not be neglected.

Seasonality

Distribution of tourism

Precursor to international tourism development

Shock absorber

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Sri Lanka

As these examples show, there can be great value in a strong domestic sector. While in many countries domestic spending already contributes a large proportion of tourism spending, there is often potential to further develop the domestic market. This was recognised in Hungary a few years ago. The Hungarian tax system encourages employers to provide various non-wage benefits to employees, which can be given at more favourable tax conditions than salaries and are earmarked for specific purposes. Since 1997, this has included a holiday voucher system. In 2010 this was updated with a new electronic card system. At first this was limited to accommodation, but in 2012 the incentive was expanded to more tourism related activities. Within two years of the launch of this new programme, over 840,000 cards had already been issued. They were filled with over € 353 million, of which the majority had already been spend on domestic tourism services. Considering that domestic tourism was largely stagnant in previous years, the programme is proving to be a success in promoting more spending on tourism services in the country.

Travel & Tourism is repeatedly shown to be a force for good, and these examples show that within that domestic tourism has a special role in sustaining and developing the industry. Whether for its economic benefits — both directly and through the long-term stimulation of the industry — or for its social contribution towards strengthening communities, traditions, and pride, neglecting domestic tourism means missing important opportunities. Businesses, destinations, and governments should remember this in their strategies and ensure that their strategies for international tourism does not come at the cost of domestic tourism.

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