Economics of Tourism

When we reached Jordan, the seemingly simple yet elegant beige buildings that contrasted the lush greenery of Amman amazed me. We drove from Amman to Petra to Wadi Rum to finally the dead sea. Walking through the narrow pathway, enclosed by the tall, constantly colour changing stones that closely yet not completely resembled the Grand Canyon in Petra, I looked up and was able to catch a quick glimpse of the beautiful clear blue sky as we followed our tour guide. As we entered Wadi Rum, the driver took us through sand dunes, around mountains of stone and finally to the camel site. It felt as if we were rowing a boat, but together with the view of the sunset, the evening was nothing but bliss. Finally of course the dead sea – floating on the water without having to pedal, convincing my mom to move away from her beloved shore that was not even one feet deep, bumping into my dad as we swam effortlessly (in the most literal way possible) and of course the infamous dead sea mud. 

When I had researched about Jordan, before our vacation, I found that Tourism constitutes a big part of their employment and income both, thus boosting Jordan’s economy overall. Especially in Petra, I saw tourists swarming, almost unable to find their way out. It almost looked like a Taylor Swift concert from a distance. 

As Jordan’s largest private sector employer, the tourism sector accounts for 14 percent of the country’s gross domestic product and the total revenue of this sector is as high as USD 525M in Dec 2022.  What I understood in talking to the local people there, that while tourism was always important for the economy, the focused marketing of Jordan Tourism, internationally, has increased the number of tourists manifold.  Just in January and February of 2023 Jordan welcomed 940000 tourists and they are expecting that this year they will surpass 6M international tourists in a year.  Jordan is also targeting to make tourism a year long activity earning revenue throughout the year and not just a seasonal one, as it once was.  Now I know why there were so many tourists in June, which is considered the low season.

My love for economics led me to think more….besides boosting economic growth, what else does the tourism industry do for Jordan?  

It definitely helps in redistribution of income.  If we look at domestic tourism to start with, tourists move from more populated and industrialised areas to more pristine areas which are less impacted by the industrial revolution.  It’s the same in Jordan.   People from larger cities like Amman, typically go to Petra, Dead Sea, Aqaba as tourists.  Most senior corporate or government officials as well as industry houses are based in Amman, resulting in concentration of higher income people. When they travel to the lesser economically developed places, there is a flow of wealth and income, resulting in redistribution.  Tourism generates income for so many people who would otherwise be unemployed, starting from the hotel staff, airlines staff to the local drivers, the restaurants, guides, horse and camel rearing population who use their animals for organising rides for the tourists, the masseuse in Dead Sea area who help massage the Dead Sea mud and many more.  Tourism not only generates direct employment, it also generates indirect employment in agriculture, industry, handicrafts and services.

Foreign Exchange earning is another big positive of international tourism.  

While I have travelled to 20+ countries before Jordan, it’s this visit that really got me thinking about the economics of tourism.