Travel Foundation report: making a positive economic impact on local communities

Here at TravelLocal, we believe in a tourism industry that benefits not just travellers, but also the local communities within each of our destinations. We’re committed to acting as a force for good, supporting responsible tourism practices and knowledgeable local partners, in a way that provides enriched experiences for our customers as well as contributes directly to local economies. We’re proud to have sponsored a new report by international sustainable organisation The Travel Foundation, that brings to light issues of inequity in the industry. It looks into the current state of economic leakage in tourism, revealing how little of your money, as a tourist, actually stays in the destination you’re visiting. It also explores the possibilities and challenges of remedying this and bringing positive change, to create a fairer system for all.

Economic leakage and creating more equitable destinations

According to the Travel Foundation report, as little as 20% of the money you spend on travelling to a destination, then remains in the destination to benefit the local economy. This works against the common belief that as a tourist going abroad, you’re helping directly support the local communities. What’s more, while some form of economic leakage is necessary within the travel industry, opportunities created by tourism in a destination can worsen issues of inequality faced by the community – through poor wages in tourism-related businesses, for instance, and favouring the needs of tourists over locals.

Research carried out for the report has identified that on average, of each $100 USD spent on a trip by a tourist from a developed country, around $5 USD stays in a developing country destination’s economy. As well, tourism leakage is between 50% and 80% of total tourist spend on average, especially in least developed countries; in the Caribbean region, for example, it is currently estimated at 80%.

Travel Foundation report: further highlights and findings

According to Ben Lynam, Head of Strategic Communications at The Travel Foundation, “this report is aiming to raise awareness of the issues and equip destination authorities (DMOs) with some tools (such as case studies, options for interventions, processes to follow, and new KPIs) to manage and develop tourism in a way that contributes positively to their place”.

Sharing a few highlights about the report, he adds:

• Traditional targets of more jobs and more revenue do not necessarily translate into fairer communities, where all feel the benefit of welcoming visitors.
• Yet, tourism is a huge and growing global industry, and there are many good examples where it has boosted entrepreneurship and local community well-being: the report showcases more than 20 case studies of this!
• Key to this is the local control of resources, which risks being weakened through unbalanced growth models and global franchising of local assets.
• Overtourism is more of a symptom than cause, representing a build-up (and bubbling over) of existing problems.

How to promote positive change as a traveller

There are many steps we can take as travellers, to make conscious decisions in a way which will directly contribute to the well-being of communities in the destinations we’re visiting. For starters, we can do our research and ensure the services we use to plan our trips encourage fairer, as well as more sustainable, tourism practices.

While on vacation, we can also choose to support locally-run businesses, from the accommodations we check into to the tours and activities we book. Doing so works not just for the local community, but also in favour of creating a better, more authentic travel experience, allowing you to explore like a local and make genuine connections during your visit.

“Reading this report should make everyone who travels, or works in the tourism industry, think carefully about why we travel, and how,” says Huw Owen, Co-Founder here at TravelLocal. “We feel that travel is fundamentally a human endeavour that connects us all, as equals, and that ensuring sustainable financial benefits to the destination is the pillar under that connection.”

Make it happen

If you’re interested in finding out more, be sure to read the Travel Foundation report, and visit our Reimagine website to learn more about our efforts to bring positive change to the travel industry.