The Economic Impacts of Foreign Tourism in Colombia
New insights from our research collaboration with Harvard’s Center for International Development shed light on how foreign tourism can help create more inclusive growth.
Tourism is an important sector for development in many countries. In leading tourist destination countries like the UK, Greece and Thailand, it accounts for between 3.7 to 9.3% of GDP. But the economic benefits of tourism are not always shared equally. Often, it is the big cities or those with the main tourist attractions that reap most, if not all, of the benefits. Policymakers interested in promoting tourism as a development strategy should consider ways to more equitably spread the benefits throughout the country.
An analysis of foreign tourist spending conducted by Harvard’s Center for International Development reveals unique insights on the economic impacts of tourism. Researchers used anonymized and aggregated MasterCard spend data to compare foreign tourist spending in Colombia and the Netherlands. Key findings include:
- The top five destinations in Colombia account for 81.1% of total tourist spending in that country. In the Netherlands, the top five destinations account for only 39.2% of total tourist spending.
- More than half of foreign tourist card spend in Colombia is to withdraw cash from ATMs, versus only 28% in the Netherlands.
- Tourist spending at grocery stores, accommodations, and night clubs was much more geographically concentrated in Colombia than in the Netherlands.
Tourists are more likely to spend money where making payments is convenient and secure. Enabling greater acceptance of electronic payments outside of the main urban areas and beyond larger merchants would increase the opportunity for inclusive growth.
Click here read to read the full paper.