Which term refers to the loss of tourist spending to imported goods, reducing domestic revenue?

• A. Leakage
• B. Leisure Travel
• C. Market Research
• D. Market Segmentation

Answer: (A)

Leakage is the movement of tourist spending out of the local economy when visitors buy imported goods or services or when profits go to foreign owners. This reduces domestic revenue because money that could have circulated among local businesses instead leaves the destination. The idea is that tourism income should boost local businesses through a multiplier effect, but leakage cuts into that effect by channeling spending abroad. The other terms don’t describe this money flow: leisure travel refers to travel for pleasure, while market research and market segmentation are marketing tools, not phenomena about how tourist money stays or leaves the local economy.