Though the COVID-19 pandemic is far from over, undeniably, Canadians are once again resuming leisure travel.
Individually, many travellers intend to engage in tourism with a fresh perspective. Top of mind: spending their vacation dollars making more sustainable choices that directly benefit the communities they visit. Industry has responded, leaning into zero waste initiatives, “slow tourism,” wildlife protection and carbon offsetting while recognizing travellers crave authentic local connections. However, tourism has a dirty secret that it can not market itself out of. It's called tourism leakage and, despite travellers’ best intentions, can siphon tourism dollars out of local economies and into the wallets of multi-national corporations and their respective shareholders.
In some places, it is especially acute. In Fiji, tourism leakage is estimated to be as high as 60 per cent. That means for every dollar spent by a visitor, only forty cents remains in the archipelago nation. In January 2022, a United Nations World Tourism Organization report indicated tourism leakage in the Caribbean is as high as 80 per cent.
What is tourism leakage?
Tourism leakage happens when money generated by a destination’s hospitality industry cycles back to another economy – typically, one in the Global North. This occurs when businesses like hotels, transportation operators and vendors are foreign-owned. The most obvious example is an internationally-owned chain hotel or resort. However, tourism leakage expresses in less obvious ways, as well.
When a hotel decides to import a North American brand of soda or orange juice recognized and preferred by international guests, it means a local brand loses out. When a cruise ship sells port city excursions in advance of arrival, it means less opportunity for local operators. If a resort must bring in temporary or seasonal international workers (which is common in the Caribbean), often times wages are saved and spent back in employees’ home countries. When a traveller books an all-inclusive package from an airline or via a search engine, communities, hotels and operators excluded from the catalogue are shut out, well before a traveller even sets foot in the destination.
Problems with tourism leakage manifest in other ways, too. The commodification of a destination’s environment, culture and people is well documented. Prior to the pandemic, overtourism alarm bells were ringing in places like Amsterdam, Venice, Barcelona, Hawaii, the Philippines and Thailand. Local communities were buckling under the stress of endless streams of tourists, and thanks in part to tourism leakage, some did not have the funds to rehabilitate vulnerable ecosystems. In some cases, countries simply closed their most famous beaches.
Why do destinations allow foreign-owned operators?
The development of destinations for tourism purposes is not a bad thing, per se, but when mismanaged, can result in economic leakage. (Some would even argue facets of modern-day, mainstream tourism are the constructs of colonialism.) However, development is the ultimate responsibility of municipal and state governance. Not all destinations have the capital to undertake multi-million-dollar infrastructure projects (think: roads, bridges, rail, sewerage) that support the hospitality industry; not all local entrepreneurs have the capital to fund larger construction developments like hotels and resorts. Foreign capital can serve as tinder to jumpstart development and the arrival of international brands can raise the profile of a destination, attracting the attention of the wider travelling public. Politicians see investment through the metric of job creation and the arrival of a new industry.
How travellers can help reduce tourism leakage
As a traveller, tourism leakage is hard to un-see and divorcing from popular chains and brands can be hard to do. (Hello, loyalty programs.)
Seeking out locally owned hotels and operators demands more research, and ownership is not always transparent anyway. Plus, we must acknowledge consumer habits. Many stressed out people in need of a vacation crave the convenience of making a single purchase decision. The fear of missing out on a bucket list attraction or a coveted restaurant reservation means travellers may also prefer the trip be planned out in advance, leaving few opportunities for small or offline vendors. In some places where access to Internet is poor, local companies are outright excluded from mainstream tourism marketplaces.
It begs the question, how can well-intentioned travellers assure their vacation dollars remain in the communities they visit?
Awareness to the issue is a great first step. You’re here, you’ve read this far.
Luckily, some amazing travel organizations are connecting guides and vendors with Global North travellers in a meaningful way through community-based tourism – which is the opposite of foreign ownership. Here are a few of our favourite resources.
According to Intrepid Travel, the largest certified travel B-Corp, community-based tourism varies from place to place but what “they have in common is that they are entirely community-owned and managed – meaning your stay won’t just benefit one family, but the community as a whole.” Intrepid offers small group guided travel around the world.
I Like Local is an award-winning travel upstart connecting guides with travellers in places like Indonesia, India and Kenya who would otherwise have been excluded from “big tourism” marketplaces. The company collects a fee from the traveller instead of deducting from the experience, so the price the guide charges is what they receive in full.
See the Caribbean™ is a traveller resource launched by travel reporter Lily Lebawit Girma to connect visitors with sustainable tourism in the region. The pandemic was especially detrimental for island nations with few other income-generating industries. The return of mindful travel will be essential to these nations’ economic recovery.
As of April 1, select Canadian movie theatres will show The Last Tourist, a film that explores overtourism, the state of the travel industry pre-pandemic and how the industry can build back in a more conscious and sustainable way. The documentary’s executive producer is Bruce Poon Tip, founder of G Adventures – another group travel operator leaning into community-based tourism. The Last Tourist will also be available on streaming services April 5.
Find a directory of businesses committed to long-term, sustainable growth of adventure travel around the globe on Adventure.Travel. The operator list includes member organizations of the Adventure Travel Trade Organization.
Skip the big brand hotel. Instead, peruse boutique hotel offerings or bed-and-breakfasts in your destination of choice. Alternatively, the properties affiliated with Regenerative Travel embody a community of hoteliers aligned with the values of regeneration.
Resist the urge to overschedule your vacation to better afford local operators a chance to earn your business.
Shop with a critical eye. Are items being sold as souvenirs really handmade in-destination or are they replicas imported from abroad?
When travellers make informed demands, the travel and hospitality industry can follow suit. When revenue remains in a community, we can begin to reimagine travel to be something that doesn’t exploit the things that make a place special.