Incredible overstatement

The UNWTO has announced that 1 billion tourists account for 9% of GDP. The 1 billion figure is incredible, with 2012 being the first year in which 1 billion international tourism trips have been made. It has been some time coming, as the global economy has meant that we have been hovering just below this number for several years now, but it is nevertheless a landmark figure (although we could debate the actual meaning of this!).

The "9% of GDP" figure is however an incredible overstatement. In 2011, international tourists spent a total of $1.03 trillion on 982 million trips. World GDP (or GWP) in that year was $69 trillion. Tourism spending was almost exactly 1.5% of GWP, so it is incredible that the UNWTO figure for economic contribution comes up at six times this expenditure share.

The accompanying picture has a small clarification ("direct, indirect and induced"), which might give some clue. Including induced multiplier effects in economic contribution calculations is just the wrong thing to do. The direct and indirect multiplier is always less than one, so it looks like they have put in an induced multiplier of over 6. I think the largest "total multiplier" (including direct, indirect and induced effects) that I have ever seen calculated was around 2.5, so there is simply something unbelievably wrong going on with the UNWTO's 9% figure.

With little to go on beyond what you can see in the links above, it does look like the "9% of GDP" figure not only includes inappropriately large multipliers, but also includes domestic tourism, while the 1 billion tourists is only international tourism trips.