How Tourism Influences the Yemeni Economy [Archives:1998/28/Culture]

July 13 1998

By: Obaid Mohammed Al-Hadha*
General Director of Planning and Statistics
Measuring exactly the influence of tourism on the economy is a rather difficult task in developing countries. This is partly because of inadequate statistical accounting, and partly since the tourism sector goes together with other productive and service sectors such as transportation, industry, and commerce.
In Yemen, though, the difficulty of knowing specific detailed information about tourism lies in the lack of experience in statistics gathering and material support. Therefore, we depend only upon enumerating the effects made by the foreign tourists who come to Yemen on our statistics. We find that tourism influences economy in two aspects:
a) Direct Economic Effects:
1. Effect of tourism on the balance of payment:
The tourism revenue in Yemen reached its highest in 1997. It was $60 million; bout $5 million more that what it was in 1996. This means a 2.5% rise in the foreign currency revenue for the balance of payment. Regardless of the oil revenue, tourism contributed about 30% of the total exports revenue.
Some studies even indicate that the real tourism revenue reached more than $120 million. The question here is where do $60 million of the tourism revenue go?! The blame is on the ineffectiveness of the laws regulating laws. These laws, for example, cannot stop the activities of unlicensed tourism agencies.
2. Effect of tourism on employment:
Several studies on the influence of tourism on employment indicate the following:
– Hotels: there is at least one new job vacancy for every hotel room.
– Other tourism activities: new job opportunities are created at the rate of 75% of the vacancies available in the hotel sector.
– All other sectors: 100% vacancies become available out of the hotel work activities.
In 1997, the number of hotel rooms reached 8109. this means that the tourism sector employs 22,300 employee. Despite of that, the Yemeni employee do not have enough skill and work experience. Therefore, employing foreign people becomes a necessity, especially in the 4-star and 5-star hotels.
3. Effect of tourism on the income redistribution:
As tourism activities take place in some remote areas, it helps to vitalize investment and tourism projects and activate the traditional handicrafts there. Thereby it directly contributes to increasing the personal income of the people in these areas. Accordingly, redistributing income between urban areas and rural areas automatically come to effectively being. What is of real importance is that the emigration movement from rural areas to urban areas gradually begin to stop.
b. Indirect Economic Effects:
1. Upgrading the income:
Tourism needs large capital since it needs a lot of facilities. But the revenue of tourism makes huge return on the invested captial. The revenue of tourism in the developed countries might reach up to 5 times of the original amount of money invested in the tourism sector. In the developing countries, though, it becomes at least 2 times of the original caital.
2. Effect of tourism on the market:
Some studies by the International Tourism Organization show that tourists usually spend some of their money on buying local goods from the countries they visit. This is, to some extent, a kind of exporting local goods without a need for cargo or foreign markets. Thus, whenever tourism becomes more active, exporting becomes more active, and so the income of the country becomes stronger.
Taken from testimony to the Consultative Council’s hearings on 1st June, 1998.