| Tourism makes a substantial direct contribution to Jamaica's economy by providing 6% of employment, substantial tax revenues, and 50% of foreign exchange earnings. Indirect benefits increase when tourism revenues purchase local goods and services, and indirect benefits decrease when tourism revenues escape the local economy either by way of imports or repatriation of foreign-owned profit. In order to understand the overall ability of the Jamaican economy to convert incremental tourism revenues into added economic activity, the aggregate Keynesian multiplier was calculated. The multiplier is low indicating that incremental tourism revenues have limited potential to create indirect benefits. The reason for the low multiplier is high imports, particularly with respect to all-inclusive hotels. All-inclusive hotels, which constitute 75% of land-based stays, import most of their consumables, capture most guest expenditures in-house, and send a large portion of their profits overseas. In order to increase tourism's indirect contribution to the local economy (inclusiveness), the government initiated several programs. These programs include increasing tourist stays at villas and apartments, increasing tourist consumption of local agricultural goods, and increasing sales of local crafts. However, interviews with a range of stakeholders found no evidence of progress in these areas. Thus, the conclusion is that the indirect contribution of tourism is low and not likely to improve substantially in the near term. |
