7 ways to directly support the local economy

Good tourism supports and empowers the local economy. Tour operators have the opportunity to directly contribute and ensure spent money stays locally.

Supporting the local economy

An important aspect of good tourism is the realisation of creating better places for people to live in and better places for people to visit. In order to realise this, one of the key elements is preventing leakage. Making sure that money spent by tourists actually stays in the destination.

That it does not flow back to international owners and thereby supports their own economy. Tourism money that does not leak, can then be locally used to:

  • Protect natural and cultural resources
  • Invest in infrastructure, education and clean water
  • Support small local entrepreneurs to grow their business
  • Provide a fair income for local employees

Leakage examples

  • If you book rooms in larger hotel chains, your money is leaking back to the international headquarters instead of staying in the destination.
  • If your clients eat in non-local restaurants, the food is often imported, and revenue is thereby also leaking back to the economy of the restaurant owner.

The local multiplier effect of tourism

If the money stays in the destination, the economic benefits of tourism are boosted by the local multiplier effect. When money is spent locally you don’t only benefit the person you do business with. It recirculates in the economy:

Directly: By hiring local employees or purchasing local products
Indirectly: By spending money at any local business
Third party: When locals spend their tourism-owned money locally

7 tips to directly support the local economy

As a tour operator, you have the opportunity to support the local economy while providing your customers with a great travel experience. It all comes down to the choices you make and how you decide to spend your money. Our 7 tips will help you directly support the local economy of your travel destinations.

1. Hire local guides and drivers

The tourism industry is responsible for 1 in 11 jobs worldwide. One of the easiest ways to directly stimulate local employment in tourism is to hire local guides and drivers. Besides supporting the local economy, you’ll also add value to your travel experiences.

Locals are very familiar with their country, it’s history, people and culture. They are the connection between the destination and the traveller and in the position to turn the activity into an experience. Don’t forget to hire qualified and trained guides and drivers for quality, safety and reliability.

Want to learn more?

Read more about involving local guides in sustainable practices.

2. Book in locally owned accommodations

As mentioned before, booking with larger chain hotels will make your money leak back to international headquarters instead of staying in the destination. Directly support the local economy by booking locally owned accommodations.

Know that this does not only benefit the accommodation holder. It indirectly also benefits their local employees, their food providers and all other suppliers. Additionally, the traveller will have a better experience staying in an accommodation where they can learn more about the local culture.

Support local communities

3. Work with local communities

Community-based tourism is the perfect way to contribute to the local economy. The aim of community-based tourism is to directly benefit local communities financially, while travellers experience local way of life. The tourism experiences are hosted and managed by the communities themselves, which results in direct employment and ownership!

When done right, community-based tourism is the ultimate way of good tourism. It’s in the perfect position to create better lives for local communities, to preserve their culture and to offer travellers unique experiences.

Want to learn more?

Read more about our 7 tips to develop community-based tourism.

4. Collaborate with local partners

As a tour operator, you are most likely working with a supply-chain in the destination. Partners that help you manage your travel experience, for example transport or activities. When selecting those partners, make sure to work with locals!

Thereby, make sure that you and your partner share the same values. This way you are able to guarantee your customers with a sustainable and unique experience. To offer customers the best possible service, you need to rely on partners that share your values, mindset and mission for sustainable tourism.

5. Buy local souvenirs

For most travellers, travelling is about making memories. Souvenirs are often bought to remind them of a specific travel experience. When buying souvenirs locally, you support the local handcrafters and their material providers.

Inform your travellers to buy souvenirs from local communities and instruct your guides to not take travellers to larger commercial shops. Thereby, make sure to explain about illegal souvenirs made from protected flora and fauna. For example, souvenirs made from poached ivory.

Want to learn more?

Read more about illegal souvenirs.

6. Eat in local restaurants

Eating and drinking in local restaurants and café’s directly benefits the local economy for the obvious reasons. It ensures the money stays in the destination and that the local owner and employees financially benefit. It also directly supports the local farmers and food producers in the area.

Besides supporting the local economy, eating locally is good for the environment. Local food doesn’t have to travel as far, so it reduces the CO2 emissions. Eating in a local restaurant is also a great experience for the traveller, who will be able to taste and explore the local cuisine.

Support local restaurants

7. Donate to local projects

Besides buying from and employing locals, you can also support the local economy by donating to local projects. You can choose to support a local project in every destination you offer and donate a fixed amount per traveller. Most travellers will want to contribute to a project in the destination they are visiting.

Donating doesn’t necessarily mean financially. You can also donate time or materials and the projects can be both social and environmental. Think about a local hospital, school or women empowerment center where you can contribute to. Or environmentally, you can support a wildlife sanctuary, a vegetable garden or tree planting project.

How will you spend your money?

As a tour operator you have the opportunity to decide where your money and that of your travellers ends up. By spending your money locally and with the right people, you make sure the destination directly benefits from tourism. You give locals the opportunity to do business, to be more independent and to stimulate economic growth. Support the movement of good tourism: better places to live in, and better places to visit.

3 Comments

  1. Anvar

    Hi,
    it is interesting to read posts like this. But, I wonder, are they ideas of yours, or there are some investigations or theory behind them?

    I mean, I like the insights you are posting, but how do you come to those ideas?

    I would love to get in contact and have a chance to cooperate.

    Reply
    • Anne de Jong

      Hi Anvar, thank you for your comment! The ideas are our own opinions and thoughts based on our work experience in the tourism industry. For inspiration, we read a lot of articles and academic papers. Please send us an email to get in contact with us!

      Reply
  2. Kagabo

    Hello Anne,
    Thank you very much for your time contribution posting this. It helpful and locals love oriented.

    Reply

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About <a href="https://goodtourisminstitute.com/library/author/annedejong/" target="_self">Anne de Jong</a>

About Anne de Jong

Anne is a passionate change maker and fascinated by the tourism industry. Wanting to contribute to a futureproof tourism industry, she supports tour operators and destinations to become more resilient and sustainable.

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