Can tackling tourism income leakage unlock a more sustainable future for tourism?
‘Profit’, the much-maligned ‘P’ of sustainability, is a strong incentive for individuals, businesses, and communities to save and invest for the future; seek out and conserve what is of value; and reinvest.
Hotelier and entrepreneur Thomas Müller argues that taking a close look at tourism income leakage may prove … profitable … wherever our industry is most problematic.
It’s a “Good Tourism” Insight. (You too can write a “GT” Insight.)
Tourism is a powerful economic force that has the potential to transform not only communities, but entire nations.
It brings people together, fosters cultural exchange, and should generate significant revenue for its destinations.
However, as the old adage goes: “With great power comes great responsibility.”
When tourism income leaves a destination without benefiting the local population, the repercussions can be profound.
The ripple effect of tourism income leakage is not to be underestimated, but there is little awareness of this phenomenon.
Tourism income leakage and its effects on GNI
Tourism income leakage occurs when a significant portion of the money generated by tourism flows out of a destination’s economy or doesn’t even reach it in the first place, often ending up in foreign companies’ banks or their shareholders’ pockets.
This phenomenon can have a detrimental effect on a country’s Gross National Income (GNI), education, employment, as well as youth and women development.
When a large portion of tourism revenue leaks out or never arrives in the destination, it can result in a skewed representation of a country’s economic health, as the local population does not reap the full benefits of the industry.
The sustainability of economies at risk
Sustainable economies are those that can support a decent quality of life for current and future generations.
Tourism, when managed responsibly, can contribute significantly to a sustainable economy, including the 17 United Nations Sustainability Goals.
Tourism fosters education and training, creates jobs, boosts local businesses, supports youth and women development, and invests in infrastructure.
However, when tourism income leaks out or doesn’t reach the destination, the sustainability of the local economy is compromised and the tourism mandate is at stake.
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Without a significant portion of the revenue remaining in the destination, there may be very limited resources available to drive any other sustainability project — ecological, social or cultural — or to invest in critical sectors such as education, healthcare, and social services.
Economic sustainability is the foundation of sustainability. WIthout it, ecological, cultural, and social sustainability initiatives become difficult if not impossible.
A responsible supply chain is an ethical imperative
Responsible travel is about … continue reading this “Good Tourism” Insight in full at The “Good Tourism” Blog.
