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AbstractTourism nowadays has become a strong industry which directly
affects the development and the wellbeing of a country. The impact of tourism
is not measured only by visitor export and total spending but also from the
opportunities that this industry offers inside the country. Apart of being one
of the strongest sources of income tourism also increases employment,
diversifies the economy and helps countries to promote their selves. This study
analyses more closely of how tourism affects economic stability of Spain,
Albania, Montenegro and Italy. The variables analyzed are GDP, Visitor export,
Capital investment etc… The period of the time when the analysis’s is
conducted is from year 1990 till 2016.The result of the analysis is that
countries with small economic capacity and limited options of developing many
industries, also with low development of tourism background are directly
affected from tourism income in generating income. From the study Montenegro
and Albania are the two countries in which their economic development is
affected directly and mostly by tourism.-       
Introduction     Tourism nowadays has become a strong industry which directly
affects the development and the wellbeing of a country .The contribution of
tourism can be direct contribution and indirect to sales, profits, employment,
tax revenues, and Human income. Direct effects it is seen within major
enterprises, hotels, restaurants, transportation, entertainment and retail.
Indirect effects for business include the supply of all goods and services that
are related to tourism. This means that, through indirect effects, tourism
affects sectors and the rest of the economy (Johnson,P & Thomas,B, 1992).
Tourism is a major economic activity and leading to Albania’s economic development.
Compared to other years revenues it increased approximately 25 times. This can
be achieved from the revenue from parking, tourist taxes, and entrances to
buildings, selling information etc. Large income achieved through art and
culture. Tourism is often defined as a meeting between different cultures.
Tourists come with their habits and local residents indicate the difference.
According to (Hjalager, 2006), cultural diversity expands the range of options
open to everyone, but is the roots of development, understood not simply in
terms of economic growth, but also as a tool to achieve an intellectual
pleasure, emotional, and moral existence spiritual. 2 Development is “a
multi-dimensional process that involves changes major social fabric, popular attitudes,
and national institutions, as well accelerate economic growth, reduce
inequalities and poverty abdication Infrastructure: The development of tourism
often leads to the construction of new infrastructures. In most cases, is
associated with the transport, building highways, which make travel faster and
more comfortable, but also enables the connection between the cities with the
rest of the country. Tourism has also affected the frequency of lines bus,
shipping lines and airlines (Gartner.W, 1996). Although in economic terms, it
is desirable to have as many tourists as possible; cities are not always
willing to accommodate ten times more visitors per day as local residents
during the summer. Major tourist flows and profit big tourist cities often lead
to arising real estate prices, and possibly the creation by the population
spoor feelings of anger towards tourists.  –       
Literature
review 2.1. Definition and conception of tourism Tourism is the
practice or the action taken by those traveling or visiting places of
entertainment purpose and knowledge (Gartner.W, 1996).To meet the needs and
desires of tourists (tourism demand) according to the purpose of their trip
included many roles (businesses, public or private offering products and
tourism services, hotels, restaurants, sectors can rattle off support, etc.)
which in itself constitute tourism industry. So it is seen that any economic
activity of public and private sector work for tourism and tourist serve as a
source of income. 2.2. Tourism is an industry Essentially it includes all
activities and businesses that form the basis of a country’s economy. On the
other hand, tourism is the industry because its development it is involved in
many sectors of the economy such as infrastructure, agriculture, services etc.
Traditionally, tourism is referred to as an industry that includes:
attractions, restaurants, accommodation and transport. However there are other
non-tourism activities of businesses such as bakery, local newspapers,
supermarket, and food markets etc. The activities that form the basis of the
economy are also participating in this industry (Trehan, 2007). 11 2.3. Tourism is an economy Tourism can also be called and
economic sector with the fastest growth, as income from foreign tourist’s
flows, and it create jobs(Ashley, 2007).Tourism also provides the basis on
which communities can regain their pride in heritage as well as quality of
life(Hjalager, 2006).Craftsmanship of traditional handicrafts, ethnic culture,
historical rituals, celebrations national events etc., are some examples of
“attractions” that are recognized between the interests of tourists.
Then challenges remain in developing these elements which are the basis for
securing, raising an acceptable level of tourists and the core of tourism
development. 2.4. Importance of tourism With the onset of the new
millennium, tourism is becoming a primary industry for its importance in many
countries( Ritchie,B. ,Burns, P., Palmer,C , 2005).Formation of the concept of
tourism as an industry, economic sector, or activity is very important in
finding new ways for the tourism development process and economy so long as
possible. Especially rural communities, often consider tourism as a substantial
part of their economic, but current challenges facing quite significant –       
Methodology  As stated in the
introduction, the thesis is divided in two main parts. The first part of the
thesis it is focused on qualitative analyses as well as giving descriptive
graphical situation of tourism impact on economic stability. A comparison
between Albania, Montenegro, and Spain is made chosen purposely to be
developing and developed countries. The graphic analyses consist in the
comparison of these countries in six variables which are GDP, Export of
visitor, Employment, Capital Investment, Leisure Travel and Internal Travel.
The time period chosen for conduction of this comparison starts at 1990 till
2016 and the data’s are taken on annually base. The graphic analysis aims to
show the trends of tourism of these six variables for developing countries such
as Albania and Montenegro and for the developed countries such as Spain and
Italy. The selection of the countries was made based on their touristic
position and historic and their geographical position which is nears each
other. The second part of the analysis consists in the conduction of a simple
VAR analysis to prove the main objective which is that tourism has an impact on
economic stability of these four countries mentioned above. After selection of
variables and selection of the data from KNOEMA website there was run a
regression for developing and developed countries. The variables chosen for VAR
analysis are: -GDP: Gross Domestic Product). 21 -Export of
visitors: (Spending within the country by international tourists for both
business and leisure trips, including transportation spending). -Capital investment: Capital investment refers to funds
invested in a firm or enterprise for the purposes of furthering its business
objectives. -Consumer Price
Index: (Consumer price index (CPI) measures changes in the price level of a
market basket of consumer goods and services purchased by households). -Employment on tourism –       
Conclusion 

  The main
objective of this thesis is to identify the impact of tourism on economic
stability. Through a literature review, descriptive and graphical analyses and
through a simple VAR analysis, this study answers this question in two
perspectives: From graphic analysis: Making comparison between four countries
Spain, Italy, Albania and Montenegro and for the five factors taken into to
analysis should be concluded that regarding: a) Visitor export where in a
general summary seems to have higher trend in all the countries in the first
decade that is being analyzing. The country with higher trend negative and
positive remains Albania and where is clearly seen that there are higher trend
of visitor export in developing countries rather than in developed ones. b)
Total contribution of tourism on GDP where for the last five years we can say
that countries that dominate are Montenegro and Albania which year by year are
trying to increase tourism sector. At contrary for Spain and Italy for the last
five years tourism has been a sector with less significant trend in total
contribution to GDP. c) Regarding total contribution of tourism on employment
Albania is the country with the highest positive and negative increase in
growth of tourism direct and total contribution to employment. This means that
for developing countries tourism plays an important role regarding employment
growth rate. 35 d) The decreasing trend of leisure travel has decreased through
years. After the first decade none of these countries have had a significant
increase in leisure traveling and tourism spending inside the countries. This
is a negative trend which can vary from many factors. The most important
factors which caused these low increases of leisure travel are related to
economic difficulties which most of European and broader countries have
suffered. e) Taking into consideration only the last five years it is seen that
developed country such as Spain has not had an increase in internal traveling
while Italy and Montenegro (developing) seems to maintain an average increase.
As in other factors of tourism Albania (developing) still seems to have the
highest increase in percentage also for internal traveling also for the last
years and there is a trend of growing year after year. f) According to this
graphic the most notable capital investment real growth is for Albania for the
first decade and there is also very obviously seen a decrease of real growth
for all the countries in the second decade. Albania and Montenegro are the only
countries which still have an increase for the last three years in which
Montenegro seems to have the highest rate. The factors after this increase are
related with the expansion of these two countries with tourism. The results of
a simple VAR analysis which can be concluded that countries with small economic
capacity and limited options of developing many industries, also with low
development of tourism background are directly affected from tourism in
generating income. This was proved through VAR analysis in which visitor export
has significant effect on developing countries but the effect was shown after
the third year. While for developed countries visitor export had no significant
effect.

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