What is meant by the term multiplier effect?
(4) The term multiplier effect refers to the resulting effect of a service or amenity creating further wealth or positive effects in an area. For example, tourism in an area will create jobs in an area, therefore the employees of the tourism industry will have some extra money to spend on other services, and therefore improving these other services in that area, allowing further employment in the area. (ii) Explain with examples how tourism can lead to a variety of employment types, at the point of origin or destination. (9) In any area, tourism will require people to create the tourism experience and enhance the visitor’s enjoyment of the location. Firstly, the origin of the traveller, for example, the UK, will create its own employment opportunities even before reaching the destination.
The multiplier effect refers to the payroll dollars paid by employers to employees spent locally for goods and services and how those dollars move through the community. Example: An employee spends for rent or mortgage, groceries, clothing, hair care, childcare, car payment, etc. Each of those businesses pays their employees and their cost of doing business from the cash they receive from their customer. Their employees then spend for goods and services. The multiplier effect is the number of times the original dollars are spent in the community for goods and services before leaving the community.
