Socio Economic Sustainability for Tourism Businesses

Socio-economic sustainability is now a primary focus in the tourism industry, ensuring that the sector contributes to inclusive socio-economic development and poverty alleviation for local communities in tourism destinations. Tourism’s capacity to create jobs plays a significant role in unlocking the potential of regions. The significant multiplier effect across economic sectors such as agriculture, manufacturing, construction, and transportation can greatly contribute to regional economic diversification and local economic development. However, this sector is often characterized by a serious lack of decent employment opportunities. This includes informality, low wages, excessively long working hours, inadequate social protection, and gender-based discrimination.

This is an essential element within the GSTC framework for sustainable tourism, serving as a tool to evaluate the sustainability performance of both tourism enterprises and destinations concerning the local economy and the welfare of the community. Under GSTC Pillar B, emphasis is placed on the significance of addressing socio-economic aspects in the management of tourism businesses and destinations. This encompasses ensuring several key aspects:

Providing Local Economic Benefits

This criterion ensures that destinations need to measure both the direct and indirect economic impacts generated by tourism activities on the local economy. Additionally, destinations and tourism enterprises should promote equitable career opportunities for locals, and support local SMEs through procurement, while ensuring quality standards.

Social Wellbeing and Impact

The lack of decent work, low wages, and inadequate social protection for communities are common issues. Therefore, all tourism stakeholders need a strong commitment to improving job quality and quantity, promoting workplace rights, preventing discrimination and exploitation, ensuring worker safety and security, and strengthening worker and employer organizations in tourism.

Following are some examples of practices that have been implemented by businesses and destinations related to protecting local communities and local economic development as insights into practices that can be followed:

Alila Ubud

a luxurious hotel nestled in Ubud, Bali, Indonesia, stands out for its commitment to minimizing environmental impact while uplifting the local community. Pioneering sustainability, Alila Ubud prioritizes hiring employees from the neighboring Payangan and Gianyar communities, fostering a sense of belonging and empowerment.

The resort actively engages in local water irrigation projects, recycling initiatives, and poverty alleviation efforts. Additionally, their dedication to sourcing fresh produce and most hotel amenities locally supports the local economy and reduces carbon emissions. This holistic approach not only enhances guests’ experience but also ensures a lasting positive impact on both the environment and the community.

Badan Pelaksana Otorita Labuan Bajo Flores (BPLOBF)

The Labuan Bajo Flores Authority (BPOLBF) is a specialized institution established to expedite tourism development in the Labuan Bajo, Flores region. They oversee the Floratama Academy, a program to incubate tourism and creative economy businesses in Flores, Alor, Lembata, and Bima, focusing on people, the planet, and prosperity.

This initiative aims to stimulate local tourism and creative economy growth of local tourism and creative economy ventures in the Floratama area and its surroundings, utilizing local cultural values and sustainable resource utilization. Moreover, the program offers training and capacity-building endeavors for local communities to enhance tourism enterprises, aiming to optimize tourist expenditure within the local economy.

By implementing GSTC Pillar B criteria and drawing inspiration from successful examples, we can create a tourism industry that delivers positive benefits for all stakeholders involved, including local communities and destination economies.



Annisa Dwi Febrianty
Junior Analyst Wise Steps Consulting