The 7 Mechanisms of Sustainable Tourism – Eliminating Poverty

In order to deliver practical benefits to the poor, a clear understanding is required of the ways to effectively channel visitor spending and associated investment into improved income and quality of life for people in poverty, so as to ensure that all possibilities are considered and used effectively.

In the publication “Tourism and Poverty Alleviation: Recommendations for Action” the ST-EP Programme presented 7 different mechanisms through which the poor can benefit directly or indirectly from tourism. These mechanisms have become an important philosophy of the ST-EP initiative and have been widely disseminated and incorporated in ST-EP projects, studies, seminars, training and related conferences. An overview of each mechanism is set out below:

1. Employment of the poor in tourism enterprises
This mechanism involves undertaking measures to increase the level of the poor working in tourism enterprises. Indeed, the relationship between tourism enterprises and the employment of local people is symbiotic, in that both sides stand to benefit considerably. This addresses poverty directly by enabling the poor to develop their own skills; by allowing for the possibility of a large number of people to benefit directly; and raising the standards of service. It is important that the provision of education and training is strengthened so that the poor may respond to such opportunities, and any social or cultural barriers are removed.

2. Supply of goods and services to tourism enterprises by the poor or by enterprises employing the poor
One of the fundamental conditions to achieving poverty reduction is in ensuring that goods and services in the tourism supply chain, as much as possible, come from local sources at all stages. The objective would be to maximise the proportion of tourism spending that is retained in local communities and to involve the poor in the supply process. Such a measure would help support traditional forms of rural activities and skills, enhance the quality and identity of the local tourism product and help establish stable sources of business.

3. Direct sales of goods and services to visitors by the poor (informal economy)
One of the main ways in which poor people seek to earn income from tourists is through selling produce and services, such as fruits, handicrafts or guided tours, directly to them. Where visitors engage with this informal economy, it can be a successful direct route to providing income to the poor, and it can provide visitors with a colourful and rewarding experience. Information provision to tourists on available local products is important, as well as training to local people to ensure their products meet the quality requirements of visitors.

4. Establishment and running of tourism enterprises by the poor – e.g. micro, small and medium sized enterprises (MSMEs), or community based enterprises (formal economy)
This involves the establishment and management of more formal tourism enterprises by the poor, either individually or at a community level. These may include accommodation establishments, catering, transport, retail outlets, guiding and entertainment. Advantages of enterprise formation at the local level are that it places power and control in the hands of the local people, it can guarantee investments for the longer term and it enables enterprises to establish a scale of operation needed to attract customers.

5. Tax or levy on tourism income or profits with proceeds benefiting the poor
This mechanism relates to the revenues that are earned by national or local government from tourism which can be used to reduce poverty. It has the advantage that all of the poor can benefit from tourism without being directly engaged in the sector. The extent to which state revenue earned from tourism is put towards poverty alleviation will depend on national priorities and programs. Taxes or levies raised locally, for example through levies on bednights or entrance fees for protected areas, can often be used fully or partly for community benefits. Transparency in the application of local taxes is essential, as well as consultation with the private sector to avoid deterring the industry and travellers by imposing too high taxation levels.

6. Voluntary giving/support by tourism enterprises and tourists
Voluntary support in money or in kind, given by visitors or tourism enterprises to the poor can act as influential drivers for local poverty reduction. Various studies have pointed to a willingness amongst tourists to give something back to the area they are visiting. Many tourism enterprises are also committed to provide sponsorship to development initiative in the areas where they operate. Local NGOs or trusts may help develop mechanisms for the collection and dispersal of donations. Beneficiary schemes clearly showing tangible local impact and community involvement have a high chance of attracting sponsorship and visitor support.

7. Investment in infrastructure stimulated by tourism also benefiting the poor in the locality, directly or through support to other sectors
Tourism development, particularly in a new, remote or rural location, can include investment in new infrastructure, such as roads, water and energy supply, sanitation and communications. With careful planning, such infrastructure can also bring positive benefits to the poor, by providing them with basic services and opening up new and faster routes to access markets. The main challenge is to make sure that new tourism development is not consuming resources at the expense of local communities, but rather offering them the chance to gain new access to them.


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