The Impact of Tourism on Local Economy
| We have chosen the average tourist visiting Helsinki
as the starting point of our investigation of the impact of tourism on
Finnish economy. Tourists usually arrive to Finland by air or by sea from
our neighbouring countries (mainly from Sweden), from other European countries,
or from USA and Japan for a one-week holiday. On the average their travel
expenses amount to 4000 FIM. Some of the money remains in their countries
and some is spend here (for convenience sake we will suppose the ratio
is 50% - 50% ). We will also suppose they will spend some 200 FIM/night
on the average in hotels (the rates in Helsinki vary between 100 FIM ñ
1000 FIM and over), which means they will pay 1200 FIM for 6 nights. We
also assume they will have their meals in restaurants, snack bars etc.,
thus spending some
100 FIM/day (700 FIM for 6 days). Besides on sleeping and eating the average tourist will also spend some 1000 FIM on tourist attractions ñ entrance fees for museums, churches etc.will account for appr. 50 FIM/day (400FIM/week), travelling expenses and souvenirs (clothes, candy, tax free goods, etc.) ñ for the remaining part of the 1000 FIM. We also assume that the goods bought as mementoes from Finland are Finnish-made, which means the money paid for them will remain in Finland (up to 80%). On the basis of all this we can conclude that the average tourist will supposedly spend money in Finland as follows:
Our next step is to estimate the number of tourists visiting Helsinki and their impact on local economy. (For the sake of clarity we will study the county of Uusimaa, instead of just Helsinki.) Annually some 736 000 tourists (cruise passengers who do not stay overnight in Helsinki are not included) visit the county bringing with them an influx of 3,5 milliard FIM. 20% of this sum (700 million FIM) go to the state in the form of taxes. The remaining 80% (2,8 milliard FIM) go to the service and goods production sectors, out of which the enterprises working in the above mentioned spheres spend 30% (840 million FIM) on salaries. 30% of this money (252 million FIM) is taxed back to the state, thus leaving the households with 588 million FIM to be directly returned to the commodity market in the form of consumption. In its turn the money the state gets is returned to the market in the form of social benefits, road construction (raw material and manpower) etc.. We can assume that the 3,5 milliard FIM brought by tourists rotate and come to the commodity market again and again. We can also assume that 80% of the money continues on a new rotation cycle (tax deductions not included). 1 cycle 1* 3,5 milliard = 3,5 FIM 2 cycle 0,8 * 3,5 milliard = 2,8 milliard FIM 3 cycle 0,8 * 2,8 milliard = 2,24 milliard FIM 4 cycle 0,8 * 2,24milliard = 1,4336 milliard FIM 5 cycle 0,8 * 1,792 milliard = 1,4336 milliard FIM Total 11,8 milliard FIM
After 5 cycles of rotation the money brought by tourists (3,5 milliard FIM) amounts to 11,8 milliard FIM, on the basis of which we can say that tourism has a considerable impact on Finnish economy. Considering that one man-year is 200 000 FIM, we can also conclude that tourism has an impact on employment as well. If Helsinki had been chosen host of the Winter Olympics 2006, the Olympic visitors (winter not being a high season, they would not drive other tourists away) would have caused a considerable influx of money into Finnish economy.
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