Multiplier effect
What is a multiplier effect?
Multiplier effect is a term meaning that for every dollar that a traveler spends in direct costs to reach a destination, some multiple of that amount will be spent on total products and services during that traveler’s visit.
Example
The entire stay at a hotel costs $300.
A person staying at the hotel also uses the following additional services provided at the hotel:
- tickets to see local attractions
- orders room service
- orders premium TV in their room
The total cost of the additional services is $120.
The grand total hotel bill will therefore be $420.
In this case, the multiplier effect has a 1.4 multiplier (300 * 1.4 = 420).