Leakage, economic tourism

Leakage occurs in many industries. In the case of tourism, the causes for economic leakage depend on the destination and its development. In general, tourism leakage takes place when revenues from its economic activities are not available for reinvestment or consumption of goods and services within the same destination. As a result, economic resources are “leaked away,” which predominantly occurs when tourism companies are foreign owned and/or when they are based in another country. Large-scale leakage has been associated with mass tourism and high-end, luxury tourism (Scheyvens 2002), both of which tend to be externally controlled. Leakage also occurs when tourism-related goods, services, and labor are imported. Thus, it is difficult to avoid leakage, especially in small island developing states that depend on the import of skilled staff (Mbaiwa 2005) and goods and services (Torres 2003).

Due to the complexity of leakages, there are challenges with its calculations, especially in...