The Importance of Tourism and Trade in the Global Economy
1. TERTIARY ACTIVITIES: The tertiary sector is the economic sector that includes the activities which provide all kinds of services. We have to distinguish between:- Public services (provided by the state, local councils or autonomous communities).- Private services (provided by private companies).
There are: – Social services (education and health).- Administrative services (justice, treasury…).- Financial services (banks).- Cultural services (museums, concerts, cinemas, theatres…)- Personal services (lawyers, lumbers, electricians, doctors, hairdressers…).- Information and communication services (radio, TV, press, Internet…).- Commercial services (shops, supermarkets, department stores…).- Transport services.- Leisure time and tourism services.
3. TOURISM: 3.1 Definitions and importance:Tourists are people who travel for pleasure for a limited period of time. The Tourist industry is the industry that looks after the needs of tourists and provides them the things that help them.
So, why do we say that tourism is so important nowadays? 1. is now the world’s fastest-growing industry 2. employs more people worldwide than any other activity 3. is an important factor in the economy of MEDCs (Spain, Greece, Italy…) 4. is seen by many developing countries (Thailand, Kenya, Tanzania…) as only possible way to obtain income and create jobs
Why has the tourism grown so much? Because: – People are richer nowadays than in the past (despite the economic crisis that has reduced the affluence of tourists to some places) – More leisure time: people have a shorter working week and longer paid holidays (as well as long weekends) – Greater mobility and accessibility: there have been an increase in car ownership and improvements in road, rail and air travel – Package holidays: cheaper holidays are possible with block bookings – Internet has reduced prices and made it easy to find holiday destinations without travel agencies and intermediaries.
3.2 Types a) Coastal tourism – It needs the three “S”: sun, sand and sea; it involves large amounts of relaxation. It is found in the Mediterranean coast (Spain, Greece, Croatia…) b) Winter tourism – It takes place in mountain regions and includes activities such as skiing and snowboarding. Some examples are the Pyrenees (Andorra, Spain and France), the Alps (Switzerland, France…), the Rocky Mountains (USA) c) Adventure tourism – It is a recent development and includes climbing, trekking, cycling, bungee jumping, canoeing… It takes places in different regions like the Basque Country, Asturias, the Pyrenees… d) Cultural tourism – It includes visits to historic sites, interesting cities and towns and different cultures. Examples are Rome, Paris, Toledo… e) Rural tourism. Examples: Valdecabras or Uña. f) Health and beauty tourism – Tourists visit spas to improve their health and relax. Examples – Caldea in Andorra or Alhama de Aragón in Zaragoza. g) Congress and convention tourism – It includes conferences, fairs, conventions or business meetings.
5. TRADE: What is trade? Is the buying and sale of goods and services
Where does trade take place? : in the market. The market is both the physical place where people sell and buy goods and service, and the abstract body where the goods and services obtain a price. The price is the total amount of money that people pay to buy something.
It is regulated by the Law of Supply and Demand: – The supply is the amount of a product that a seller puts on a market – The demand is the part that an individual or a group wants to buy
So, the Law of Supply and Demand says:- When the supply is high and the demand is low, the prices decrease -When the supply is low and the demand is high, the prices rise
5.1 Domestic trade: It takes place within the borders of a country. There are two types:- Wholesale trade. It is carried out by a distributor who buys products in large quantities directly from the producer and sells them to shopkeepers. -Retail: a small trader buys small quantities of products from a wholesaler and sells them to customers.
There are different ways to sell the products:- Small shops – Superstores: Supermarkets, Hypermarket, Depsrtment store, Shopping Centres- Street markets- Sale by mail order, telephone or Internet.
5.2 International trade: It is the exchange of goods and services between two countries. Firstly, we must wonder why international trade takes place. The answer is as easy as that: because no country can provide everything its inhabitants need or want. To provide these needs a country has to trade with other countries.
When we talk about international trade we must distinguish between:
a) Imports / Exports: Imports are the goods and services that have been bought by a country because: – It is short of them – It can obtain them more cheaply from elsewhere.
Exports are the goods and services a country sells because: – It has a surplus – It can produce them more cheaply than other countries
b) Trade surplus / Trade deficit: Trade surplus means that a country earns more money from the goods it exports than it needs to spend on imports. CONSEQUENCE → it will become richer → it will improve the standard of living and quality of life
Trade deficit means that a country has to spend more money on imports than it earns from exports -CONSEQUENCE → it is likely to remain poor or will have insufficient money to develop new industries or improve services