Tourism Leakage – How much does tourism actually contribute locally?
Try to think about the money you spent the last time you went on an international holiday. How were your expenses distributed? What were the most significant costs? Were there cost of transportation such as airline tickets and airport transfers? How about accommodation costs and guided excursions and tours? What about the food and drinks you enjoyed? Maybe you went shopping too. Now ask yourself, what proportion of your total holiday expenditure contributed to the local economy of your chosen destination?
When we break down our holiday expenses and start to analyse who are on the receiving end of our money spent, we find that in most cases only a fraction stays within the local community. Imagine a holiday where you fly with an international airline, stay at an international hotel chain booked through a multi-national hotel agent. The hotel has foreign management and staff to meet the language and service training demands by international tourists. The food and drinks you enjoy are characterised by imported products to satisfy international taste buds and give the comfort of familiarity in a foreign setting. The souvenirs are mass-produced in another country with cheaper labour costs, and your tour guide is your fellow countryman. This is not an uncommon holiday setup. This is what we call ‘tourism leakage’, the phenomenon where the vast majority of tourism revenue leaks out of the local economy and into the pockets of big international companies.
Why is tourism leakage a problem?
Tourism has a fantastic potential to create local jobs, boost community development, infrastructure, and education. However, these benefits are hampered by a tourism setup, such as the above. The example is not uncommon. It is, in fact, how many of us spend our holidays. But not only does tourism leakage prevent socio-economic benefits from reaching the communities, the local residents are often the unwilling recipients of the nuisances and problems related to tourism. These negative impacts can for example be inflated prices, shortage of water and other resources, increased wastage, and overcrowdedness.
What can you do to minimise tourism leakage?
Be adventurous, experience the destination you choose to visit. Eat, sleep, and explore locally. Immerse yourself in local language, customs, and culture, and embrace the fact that the world is colourful, diverse, and exciting.