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CLIA ACC: Economic and Social Impact: Reading the Multiplier Correctly

CLIA ACC · Work through your exam, one topic at a time.

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Economic and Social Impact: Reading the Multiplier Correctly

This domain tests how cruise tourism converts into economic activity - direct, indirect and induced effects - and how to describe social benefits without overstating them. Questions often ask you to classify a spending item or to spot a double-count.

The measurement chain

  • Direct impact: cruise line spending with local suppliers (provisioning, fuel, port fees, agents), passenger spend ashore, and crew spend.
  • Indirect impact: the supply chain behind those suppliers - food wholesalers, transport firms, maintenance contractors.
  • Induced impact: employees of direct and indirect businesses spending their wages locally.
  • Output measures turnover; value added measures contribution to GDP; employment counts jobs, full-time equivalent or not. CLIA's Economic Impact Analysis reports global and country-level output, wages and jobs, and is periodically updated - always cite the edition and reference year.

Social dimensions

Employment quality and seasonality, crew remittances to home countries, small-island and remote-community dependence on a short season, support for heritage and infrastructure investment, and the risk of economic leakage where goods and profits leave the destination.

Worked example

An island reports 200,000 cruise passengers; average passenger spend ashore is estimated at $80. Reasoning: direct passenger spend is $16 million. Applying a 1.5 multiplier gives roughly $24 million in total output - but that is output, not value added, and only the portion of spend captured locally (not excursion commissions remitted abroad) counts as direct local impact. If the study also includes line spending, check it is not counted twice in the passenger figure.

Traps that cost marks

  • Using passenger headcount as a proxy for economic impact.
  • Confusing output with value added or GDP contribution.
  • Double counting line spending that also appears in supplier turnover.
  • Ignoring leakage and seasonality.
  • Quoting an economic figure without its year and edition.