Page 244 - Contributed Paper Session (CPS) - Volume 4

CPS2218 Rusnani Hussin et al.

Measuring the economic impact of tourism
industry in Malaysia: An Input-Output
Analysis
Rusnani Hussin, Siti Rahmah Seh Omar, Mohd Azam Aidil Abd Aziz
Department of Statistics, Malaysia

Abstract
Tourism industry effects positively to the Malaysia’s economy in the forms of
output, income and value added. Tourism industry is anticipated to promote
economic activity such as Accommodation, Food and beverage, Passenger
transport, Travel agencies, Cultural, sports and recreation and Shopping. The
paper validates those expectations by examining the economic impacts of
tourism industry in Malaysia. Input-output model is adopted as the main
methodology in this study. The aim of this paper is to estimate the direct and
indirect economic impacts on tourism. Results are consistent with our
expectations that tourism has benefited other related tourism industries such
as Travel agencies and Accommodation.

Keywords
Tourism Industry; Economic Impact; input-output analysis; multipliers

1. Introduction
Tourism sector contributes towards various economic sectors and thus
generate multiplier in the economy. Job opportunities related to tourism could
be enhanced as this industry is labour-intensive. The development of this
industry is supported by the rapid advancement in the online service facilities.
Hence, cost effectiveness in tourism marketing aspects could be optimised.
Tourism industry has become one of the significant industries towards
boosting national economy and impact positively to other related industries.
Registered travel agencies, accommodation providers, transport operators,
food items, souvenirs, handicrafts and independent tour guides have grown
rapidly to meet the needs of tourists. Amongst tourism industries,
Accommodation, Food and beverage, Passenger transport, Travel agencies,
Cultural, sports and recreation and Shopping has spurred the development of
the services sector, as well as small and medium enterprises. The impact of
this industry development can create jobs, generate domestic income and
drive exports as well as generate the country's economy as a whole. According
to statistics released in the Tourism Satellite Account report, tourism industry
in Malaysia continues to grow in 2017. The share of Gross Value Added
Tourism Industry (GVATI) increased to 14.9 per cent in 2017 compared to 14.8
per cent in 2016, amounted to RM201.4 billion. The growth was driven by

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