"The tourism multiplier indicates how much greater the increase in income caused by tourism expenditure is than the expenditure that triggered it" (source: Kaspar 1991).
The tourism turnover is increased by the purchase of goods that directly benefit tourism, as well as by increased private consumption, which is fed by the profits from tourism. The money from tourism flows into a wide variety of economic sectors.
The multiplier effect for the regional economy is high if the income remains in the region. This means that the effect only takes effect when the region has a well-developed and functioning infrastructure in terms of services for the tourism industry. In addition, the region should be economically developed to such an extent that the income of those employed in tourism flows back into the local economy.
The euro spent by hotel guests passes through various stages and becomes part of new sales and thus new income, provided that the revenue is not saved or does not leave the economy in question.
Source: FernAkademie Touristik, 2024
https:// www.fernakademie-touristik.de/fileadmin/user_upload/Dateien/Daten/Probelektion/fernakademie_probelektion_kur_regionaltourismus.pdf