There is now a substantial body of literature on tourism economics and a new journal entitled Tourism Economics. This is not surprising because the tourist industry is, from a number of different viewpoints, the largest in the world and shows a very rapid rate of growth. While tourism economics is offered as a subject in most courses on tourism management, it is rarely offered in economics courses per se or even as a part of industry economics courses. This is regrettable given the significance of the tourism sector. In fact, most courses in industry economics give little attention to industries in the service sector even though it is by far the largest sector in high income countries both in terms of its contribution to GDP and employment. Even in a low income country such as India, the service sector accounted for 42 per cent of its GDP in 1994, agriculture for 30 per cent and industry for 28 per cent (World Bank, 1996, p.210). As mentioned above, tourism worldwide is expanding at a very rapid rate. The demand for tourism is quite income elastic. It is also responsive to increasing leisure time. Furthermore, technological changes in transport have resulted in speedier and more comfortable travel and in many cases a reduction in its real cost. In addition, using rising populations helps to increase the pool of travellers.


The Tourism Industry

There has been much controversy about what constitutes the tourism industry. In some cases, individuals do not recognise it as an industry per se. However, there is broad debate about how most industries are to be delineated in practice. Sometimes demand characteristics are used to determine the extent of an industry and on other occasions supply characteristics may be used. While some services are supplied almost exclusively for tourists, for example, hotel accommodation, many services provided to tourists are also supplied...

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