That's One Leaky Hotel

On leakage and the money seeping out of tourist destinations

One of my stated goals with Flung—The Substack is to demystify the global tourism industry while emphasizing its enormous influence on world affairs. Tourism shapes the global economy, politics, and culture in ways big and small, wide-ranging and local. Travelers and even stakeholders are not typically encouraged to gain an understanding of this big picture, a blind spot in travel coverage that’s begging to be corrected.

Today, I’m diving into the phenomenon of leakage, a word that gives me the ick, which means it perfectly encapsulates the phenomenon it describes within the travel industry.

Leakage refers to the amount of tourism revenues that “leak” out of a country. Tourists might collectively spend, say, $100 million in a country on their vacations every year. If leakage in that country is 30 percent, that means $30 million of that revenue ultimately leaves the country. Estimates vary widely, but many developing countries probably have leakage above 50 percent, while in the Caribbea…