The Tourism Industry in the EU

Tourism is, on the whole, an underappreciated industry. Tourists are more or less tolerated by the inhabitants of the cities and countries that they visit, but they really are a necessary part of today’s society. Tourism “brings social inclusion and understanding in a way no other industry does” (Gollan). Not only is this important for the diversity of Europe, but it is also fantastic for the economy. Those who had been turned away for not having the right education and training in other fields can find work in this labor-based industry as long as they can work with a smile. It is especially interesting to look at how the European Union encourages tourism, and how being a part of the Union could help or hurt a country.

So which EU country gets the most tourists? According to Eurostat’s 2014 research, Spain was the clear victor, being the destination of 20.7% of trips, and claiming the top spot for total number of nights visitors spent there. France and Italy come up in the rating right after Spain, at 12.4% and 12.0% of trips respectively, followed by Germany, Greece, and the United Kingdom (“Tourism Statistics”).

However, being the victor in total number of visitors does not make Spain the victor in terms of money actually accumulated from these tourists. Whether it be the differences in prices, total cost of living in that country for a few days, or how many street vendors line up outside famous tourist attractions, not all countries will get the same amount out of tourists as the next. This is important, as money is quite literally being taken from one country to another. So which country makes the most off tourism?

Although you may think that it would be France or the UK, these two actually come third and second to Germany. One of the biggest draws of Germany right now is that it is seen as stable and safe (“Why More Tourists Are Flocking to Germany”). With the state of the world today, the last thing tourists want to worry about is crime and the safety of their family. And as Germany is seen as well-regulated and protected, it only makes sense. Its overall wealth also invites business trips to Germany, which just adds to its appeal. According to the World Travel & Tourism Council, it is estimated that Germany made US $376.7 billion off of tourism and travel-related expenditures in 2016. This includes everything from costs of renting hotels, transportation costs, and tourism services, to food and drink, investments, and jobs created to keep up the industry. The amount of money Germany earns this way is gigantic, and accounts for 9.7% of Germany’s overall GDP, which is US $3,874.4 billion. Surprisingly, tourism accounts for 9.6% of the United Kingdom’s total GDP as well, with a total contribution of US $283.2 billion.

If Germany and the UK rely on tourism for almost 10% of their GDP, which countries in the EU rely on tourism the most? These countries are usually quite small, known exclusively for their beaches and beautiful weather. In the EU, the most notable ones are Cyprus, Croatia, and Malta. Croatia boasts the b
iggest GDP of the three of them, at US $57 billion, 22% of that being a product of tourism. Malta depends on tourism the most, however, having a GDP of US $10.5 billion, 25.8% of which is brought in from tourism (“Country Reports”).

So what would happen to a country that relies on tourism leaves the Union? Brexit is a good example of this, as “UK tourism accounts for one-eleventh of our GDP and provides more than three million jobs” (Calder). Ever since the referendum vote, the sterling has not been what it used to be. Assuming the UK’s currency will stay low, this could potentially mean good things for the tourism industry, at least in theory. Tourists would get more pounds for their euros, encouraging them to visit the UK instead of a country that uses the euro, for example (Calder). And those that live in the UK may stay in the UK for vacations instead of going abroad. However, this type of thing is price-inelastic. Just because it’s 25% more expensive doesn’t mean that 25% less people will go.

What’s easier to predict is how a lower mobility of people would affect businesses. This would make it harder to hire people from other countries, inevitably giving more jobs to Brits at a higher wage (Calder). With less competition, workers can demand more pay, which is nice for workers in a low-paid industry, but it also punches up the price of products. If there are less foreign workers, that also means a lower need for business-class flights, which are the main source of income to fund flights, not the cheap tickets tourists usually buy. Cutting back on flights may start to be necessary somewhere down the line, meaning a raise in ticket prices in general, including for tourists.

The last big thing to consider with this is how tourist sentiments to the UK will change after Brexit. Being a part of the European Union definitely gives the UK an air of stability. But with the plan to leave the Union makes Britain seem less inviting and maybe even less appealing to tourists. In a study done by Travelzoo before the referendum, nearly 6,000 people were surveyed from France, Spain Germany, the US, Canada, and Italy. Roughly a third of the Europeans and one tenth of the North Americans said they “would be less likely to come to a post-Brexit Britain” (Calder). Researches from Bournemouth University calculate this kind of drop in overseas tourists would “cost the UK £4.1bn, forfeiting more than a billion a year in tax revenue and shedding 63,000 jobs” (Calder). The long-term effects of the vote on tourism is still yet to be seen, as the pound continues to stutter in value and people come to terms what this could mean for the future of the EU.

7 thoughts on “The Tourism Industry in the EU

  1. Kenneth Clark

    I think that tourism is just as important in the Amazon as it is in the EU. Although I believe tourism plays a different role in the Amazon than it does in the EU. As tourism becomes increasingly popular in the Amazon it raises new responsibilities to protect the local people and their traditions and culture. A would agree that tourism “brings social inclusion and understanding in a way no other industry does” (Gollan). But part of this understanding involves being able to respect the people and place you are visiting. In my core class we watched a video that took place in the 90s. It involved a group of people who went down to the Amazon to visit Indians villages, although they were able to experience and immerse themselves in the culture of the Amazon Indians they unknowingly were exploiting them at the same time. So tourism does play a key role in the success of many countries but it is also important for countries to be mindful when it comes to tourism.

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  2. Brian Zhang

    The tourism industry is pretty important for many of the South American countries as well. Foreign people coming in is rising in popularity because people want to see this exotic place and the people for themselves. The reliance on foreign aid seems detrimental to the indigenous groups. From the graphs, it seems that tourism is only a minor source of income for the bigger nations. For the indigenous groups that live in South America, tourism is close to the only way they can make money. They economy is more reliant on barter and trade. If tourism were to stop, I feel the effects would be different for the UK, for example, compared to the indigenous people.

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  3. Evan Nudd

    Tourism is also a strong market in South America however, it generally seems to lead to poor results. If a tourist were to run into an indigenous tribe while exploring the rainforest, they will most likely die. If not, they still bring diseases with them from other countries that the people of the tribes have no resistance too. We saw a video in class about some tourists who were really rude and culturally insensitive to natives. To those people it seemed more like a living zoo than a human village, and they treated it as such. They would anger some locals because they felt they were being bullied into giving discounts or deals to the tourists or else they wouldn’t buy anything, hurting the local market. Not all tourism is good tourism.

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  4. Brandon Howell

    Tourism in a general sense is important to the market value of a country. There would be no income to the country if there weren’t people coming in an out of it. Now, there is a difference between good and bad tourism. If tourists were rude and insensitive to its inhabitants, then why even bother having tourism if it just leaves you open to dis-respectfulness and more of that nature. As Evan had said, I too had watched a video in class about tourists who were just that. Rude, incompetent, and culturally insensitive people. There is a boiling river in the Amazon that is special and unique. There is also one in Yellowstone National Park. One is sacred to its people and the other is a tourist attraction. Done right, it can be a good thing. But there is a fine line to be drawn to when to go an market your country for tourism.

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  5. Margaret Oros

    Tourism is something that be looked at from a positive and negative light. I wrote my paper on San Francisco’s Chinatown, and tourism completed changed this area. The government hated Chinatown because they thought it was bringing no profit, and they did not want people coming straight from China and taking over this area for their own. After a couple of important events happened, eventually the government warmed up to the idea that this is not only bringing people into San Francisco, it is bringing a lot of money. As one of the top places to go, Chinatown offers diverse food, culture, and people. Tourism can be seen as negative, especially if you live in an extremely touristy area, but it actually does a lot for the area.

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  6. Ingrid French

    We also spoke about the effects of tourism in the “Life in the Amazon” core course. It is interesting to see the differences and similarities in the same financial investment but in different regions of the world. Tourism is a way to save the lives of some of the indigenous tribes of the Amazon, they are able to somewhat maintain their ways of life but still be able to have a role in the economics of the country they live in, but it is also stripping them of a lot of the genuine aspects of their culture. Regardless of your section of the world it seems as if tourism is essential to economic survival, it is just a matter of making it work hand in hand with the goals and standards within your community.

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  7. Jonathan Schulberger

    I would agree with your point that tourism is underappreciated. Jordan’s economy is basically all tourism and yet there seems to be very little appreciation for it by the general population. They seem to understand it is necessary but in reality it is always a bit odd having a constant stream of foreign individuals populating your cities. It does seem to help more evenly distribute other countries’ wealth however with that wealth also comes culture. I would think that the native population in many countries, not only Jordan, is apprehensive about promoting tourism as it promotes globalization. With that globalization comes the loss of some aspects of culture and it seems that some people are not willing to give up their unique culture.

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