Supporting the local economy on holiday

Estimated reading time: 5 minutes

The potential benefits of tourism and the rise of responsible travel 

Before covid, the tourism and travel industries accounted for 10% of the world’s GDP and 7% of international exports.  Despite the decrease in the number of tourists due to the pandemic, the industry continued to support 289 million jobs in 2021.  International travel and all types of tourism have a huge potential to promote inclusive economic growth, social awareness and inclusiveness as well as the protection of cultural and natural heritage.

Increasingly more travellers are expressing a wish to travel more sustainably. Decarbonisation targets and managing the negative effects of mass tourism are progressively being taken into account with foreign travel. Booking.com's 2017 global Sustainable Travel Report reports that more than half of global travellers wish to travel more sustainably in the future, and 65% of international travellers expressed the intention to stay in eco-friendly accommodation.

The importance of developing sustainable tourism globally

2017 was a big year for sustainable tourism - the United Nations nominated it 'International Year of Sustainable Tourism for Development', in the hope that travel and tourism's huge percentage of the world’s economic activity (at the time it represented about 10%), could help turn tables in the combat for economic properity, social inclusion, increased intercultural dialogue and environmental preservation.

Irina Bokova (Director-General of UNESCO) stated:

"In designating 2017 as the International Year of Sustainable Tourism for Development, the United Nations General Assembly noted “the importance of international tourism in fostering better understanding among peoples everywhere, in leading to a greater awareness of the rich heritage of various civilizations, thereby contributing to the strengthening of peace in the world”.

Responsible tourism's developing place in the tourist industry

More recently, Britain’s ABTA 2022 survey found that 61% of British travellers believed that all parts of the travel industry need to look at how they can reduce their carbon emissions and 63% of people agree that ‘travel companies should ensure that their holidays help the local people and economy’. This movement toward more ethical, sustainable tourism has resulted in platforms like ‘Travel begins at 40’ springing up and the giants Booking.com and Airbnb now swaying toward more local experiences and more eco-friendly accommodation options (it should be noted that they take a considerable cut).

What is sustainable tourism?

On a practical, everyday level, sustainable travel means many things to many people. For some tourists, sustainable travel is experiencing authentic experiences with cultural insights into the local communities. For others, the words 'voluntourism', 'eco-tourism' or 'environmental conservation' spring to mind.

Tourism research by Booking.com 2017 found that 38% of travellers perceive buying locally-made products and supporting local artisans as sustainable travel, while 36% would choose an eco-friendly accommodation because it provides a more locally-relevant experience.

But what is the official definition?

Why should we buy locally-made products and support local artisans?

Local-level tourism has a specific impact on the local economy. The objective behind buying locally-made products or local services is to do what we can to keep money in the local community, otherwise known as avoiding ‘leakage’. 

Tourist expenditure clearly has a direct economic impact on the destination, but less evident are it's secondary effects on sustainable development, carbon footprint and biodiversity.

From the hospitality industry to endangered species - the way we spend our money has far-reaching consequencies

If you stay in an international chain hotel, the money you pay leaks back to the international headquarters of the chain instead of a local owner. Or, if you eat in an international chain restaurant which imports ingredients instead of using locally-grown produce, your money leaks back into those international supply chains, rather than into locals’ pockets.

On the other hand, buying or staying locally ensures living standards for the inhabitants and allows them to protect cultural heritage and conserve natural resources which they know attract visitors and thus secure their livelihoods.  It encourgaes education and fair pay in the community and also helps sustainable development and shorter production chains throughout the tourism sectors in the future, a win-win for everyone.

So, if being a good tourist, respectful of the place and community you are visiting is important to you, you’ll want to flex those purchasing power muscles and support the local community. 

What is local tourism?

There is no set of standards defining local tourism, so it is open to interpretation and can be at country, region or town level. Being aware of the economic impact of tourism and trying to keep travel spending within a given community takes conscious consideration of the supply chain.  The extra cerebration is worth it as it results in responsible and sustainable tourism rather than lining the pockets of multinational companies.

Often, artists or craftspeople selling from stalls or co-operatives get a sizable percentage of the price, and the re-seller or other members of the co-operative are also local, so the chances of avoiding leakage are pretty good. Fair-trade collectives also work towards financially supporting local projects aiding the community.  

What is the local multiplier effect?

When you buy something local or pay for a local service, the money ripples support through the local economy in three ways:

- You directly support locals through hiring local people or using locally sourced products.

- You also indirectly support the local economy by supporting a local business.

- If the local person you paid then spends this money locally it is considered third party support.

How can we support the local economy when travelling?

• Buy locally made souvenirs like the ones found on natifcreatif which support local craftspeople while protecting the natural flora and fauna and reducing transport pollution.
• Stay in locally owned accommodation. This will not only economically benefit the owner, but also the local employees, local services and suppliers they use.
• Hire qualified local tour guides and local travel agencies to support their livelihood and local knowledge.
• Tag local artisans/ creators, restaurants and accommodation on social media.  Write them a positive commentary if you have time.
• Go to locally owned restaurants and bars. As per the accommodation point above, this ensures money goes to local business and their local employees, services and suppliers. Usually, a restaurant offering local dishes will use locally sourced ingredients thus reducing CO2 emissions as well.
• Go for a community-based tourism holiday. When done correctly these schemes financially benefit local communities and give the tourist an authentic taste of local life.
• Use tour operators that collaborate with local partners in their supply chain for transport, excursions and activities. Such partnerships encourage sustainable tourism.
• Donate time, money or materials to a local project. Think wildlife sanctuaries, hospices, schools, vegetable gardens etc.
• When buying from local artisans, creators or restaurants, try to pay in cash. Often these small business have to pay high transaction and flat fees to accept card payments.
  

If you would like to find out more about sustainable development in travel and tourism, ABTA have published a list of tips on sustainability for travellers.  

If you are interested in ethical travel or the wider issues affecting the travel sector, including the environment, destination management, human rights and animal welfare, they have also brought out the roadmap Tourism for Good - a brochure aimed at rebuilding the tourism sector after the covid pandemic responsibly .