Application
A study of tourism 'leakage' in Thailand estimated that 70% of all money spent by tourists ended up leaving Thailand (via foreign-owned tour operators, airlines, hotels, imported drinks and food, etc.). Estimates for other Third World countries range from 80% in the Caribbean to 40% in India.
Leakage is not restricted to less-developed countries. Australia experiences a significant leakage effect from Japanese tourists. Though the spend the most per capita of all tourists to Australia, much of what they spend is through Japanese travel companies, Japanese hotels, and other foreign-owned businesses. There is thus significant leakage to Japan's economy.
Leakage not only varies from country to country, but also from industry to industry. High-income tourism may well significantly increase leakage, as that industry likely involves importing more goods and services than usual. Ecological or adventure tourism may exhibit a very small degree of leakage, however, as they place value solely on what the host country has to offer.
Read more about this topic: Leakage Effect
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