This will hugely impact the economy not only of that particular locality but also of that whole region. Therefore, it is pretty clear that the immobility of the cultural resources has a significant impact on the economy. The demand of the tourists increases if the prices and costs are fair, logical, and balanced. It attracts more and more tourists that contribute to the economic growth. But, it is also significant to note that the prices and the costs increase in the equilibrium of the growth of cultural tourism. Destinations with immense cultural importance and rich tradition are able to attract tourists whatsoever.
Therefore, the increase of the prices will ensure the economic growth. We have to analyze different sides of this aspect to arrive at a clear and proper understanding. The restriction on the international mobility of the services can help to ensure aggregate welfare. The growth of cultural tourism influences the locals to increase the price and costs of the non-tradable goods and services in accordance with the hike in the pricing of tradable goods (Sinclair, 1998). The local service sectors make sure that the un-priced non-tradable goods are not sold to the tourists at the same price on which they are exported. If these service sectors do not exist, this growth of price would not take place and the economy will be static. Moreover, if the non-tradable local amenities are controlled or owned by non-locals, then the repatriated income creates a negative effect on the economy (Zhou, Yanagida, Chakravorty, & Lung, 1997).
The non-residents usually repatriate more money from the income than the amount of money they spend on the related services. In this case, the aggregate welfare will get hampered. If by chance, there are some factors that are internationally mobile, then the supply structure of the goods and services become elastic and flexible. The pricing is also adjusted according to the demand and the availability. The rents and costs of the services are dissipated by the guiding factor of international mobility. The growth in the economy and the aggregate welfare depends on the increased price of the goods and services. But this factor does not allow the locals to do so. It does not create any negative impact on the economy, but it surely does not contribute to the economic and aggregate welfare (Lanza & Pigliaru, 1994). The factor of taxation is also very significant in the analysis of cultural tourism and its economic impact.