For a long time, earning foreign currencies was considered to be the main benefit of international tourism. For many developing countries earning hard currencies has a vital significance, and tourism is a welcome source of the foreign currencies they need to finance necessary imports. The relative importance of tourism with respect to foreign currencies is far less important for developed countries.

Nevertheless, in many western countries in the 1950s and 1960s tourism was considered to influence the international liquidity position. It is not so long ago in the 1960s that France and the United Kingdom took the decision to restrict their citizens taking holidays abroad in order to support their balance of payments and, more particularly, to protect the value of their own national currency. This was a kind of tourism import quota. The impact of these restrictive measures could be serious for some destinations (e.g. the Belgian Coast suffered from the British and French decision in 1967), but the overall effect on the balance of payments for the generating countries was rather limited. Some governments overestimated the role of international tourism on the value of the local currency. To get a better understanding of the role of tourism in the international liquidity position, we must define the place of the sector in the balance of payments. This is not limited to the travel account. This section should make it clear.

The balance of payments is 'an account which shows a country's financial...