9 őDimitrie CantemirŒ Christian University Knowledge Horizons - Economics Volume 7, No. 3, pp. 9–13 P-ISSN: 2069-0932, E-ISSN: 2066-1061 © 2015 Pro Universitaria www.orizonturi.ucdc.ro FOREIGN DIRECT INVESTMENT IN TOURISM SECTOR Georgeta ILIE ”Dimitrie Cantemir” Christian University, Faculty of International Business and Economics, E-mail: g2009ilie@gmail.com Abstract Nowadays tourism is considered an appropriate and significant source of growth. Many countries regard the tourism as a potentially promising and capable way for economic development. Foreign direct investment (FDI) is one of the vehicles through which many countries can develop their tourism industry. FDI in tourism industry presents special challenges and concerns. Increasingly, however, the sector is being valued as a means of earning export revenues, generating jobs, promoting economic diversification and a more services-oriented economy, helping to revive declining different urban areas and cultural activities, and opening up remote rural regions. Key words: Tourism-related foreign direct investment, economic impact, policy measures JEL Codes: F23, O18 Introduction Over the years, tourism has proved to play an essential role for the development, prosperity and well- being of a country. The fact that there are more and more tourist destinations all over the world and the investments in tourism are increasing, all these have turned tourism into an element directly linked to the socio-economic development by means of creation of jobs and companies, infrastructure expansion and export revenues. As far as tourism is concerned, the capital, the infrastructure, the knowledge and the access to global marketing and distribution chains are essential. As a rule, foreign direct investment (FDI) is deemed one of the most efficient mechanisms that could bind all the elements. For this reason, developing countries are more and more interested in attracting such investment. Even so, it is worth mentioning that, despite all these facts, FDI is approached by many countries with scepticism and optimism at the same time. Even if nobody can deny its positive effects, there are concerns with respect to its potential damage over the environment, the communities, and over the cultural and economic independence. On the one hand, there are efforts made in order to attract FDI in tourism while, on the other hand, there are complaints about the fact that the domestic economy does not feel the benefits of tourism, the foreign investors tend to take control over the sector or, even, that there is too much FDI. 1. Trends of global tourism As reported by the United Nations World Tourism Organisation Tourism (UNWTO), the worldwide tourism can be summarized in the following key figures: 9% of GDP – direct, indirect and induced impact; 1 in 11 jobs; 1.4 trillion USD in exports; 6% of the world’s exports; from 25 million international tourists in 1950 to 1087 million in 2013; 5 to 6 billion domestic tourists; 1.8 billion international tourists estimation for 2030. Pursuant to the annual reports by UNWTO, the presence of the tourists has gone up on a year by year basis. (Table 1) Table 1. The evolution of international tourist arrivals between 2000-2013 Indicators International tourist arrivals (million) Market share (%) Change (%) Years 2000 2005 2010 2012 2013 2013 2012/2011 2013/2012 World 677 807 948 1,035 1,087 100 4.1 5.0 Advanced economies 421 459 506 551 581 53.4 3.8 5.4 Emerging economies 256 348 442 484 506 46.6 4.4 4.5 Source: World Tourism Organization (UNWTO), UNWTO Tourism Highlights, 2014 Edition