Economic linkages and impacts across the talc

Many agricultural-based economies over the last fifty years have transitioned to service-dominant economies. Tourism is often a large part of this transition. It is often unclear how the output and income impacts of tourism change as the value and volume of tourism evolves. This research uses a variety of tools to evaluate the economic importance of tourism to Hawaii as it moves through the Tourism Area Life Cycle (TALC). The results show that the size of tourism’s economic contribution is dependent on the import propensity of tourists’ spend as well as the import propensities of tourism oriented sectors and their backward and forward linkages while the CGE model highlights the fact that welfare is maximised at the zenith of tourism growth.

Research highlights
► This paper evaluates the economic importance of tourism to Hawaii through the TALC.
► Tourism’s contribution dependents on the import propensity of tourists’ spend.
► Import propensities of tourism oriented sectors and their linkages are important.
► Transportation is the key sector driving the linkages in the tourism industry.
► The economic impact of tourism is maximized at the zenith of tourism arrivals.