8 easy ways to invest in local economies when travelling

What’s the best thing about travelling? That’s a question that could have many answers, but for us, it’s the exposure we get to multiple different cultures beyond our own, and the chance to learn new things about the world. It is so much easier to travel the world now than it used to be, especially if you come from a country with strong passport privilege, but sadly there are all too many travellers who miss out on the chance to invest in local economies.

Benefits to Local Communities
Benefits to Tourists
Overall Impact
Beginner-friendly methods
Things for confident travellers to try
More advanced ways to invest

Most travellers simply do not realise they aren’t doing so – it’s an easy assumption to make that whenever you spend money in a country, you’ll be stimulating its economy somehow, but unfortunately this is no longer the case.

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Firstly, let’s look at why you should invest in local economies at all…
How does it benefit local people?

Well, it has lots and lots of benefits! The first one is pretty obvious: in areas with strong local economies, the local people often thrive. They have the building blocks they need to support themselves and each other easily, without depending on outside help. Areas with thriving local economies will often have far lower levels of unemployment, and those within the community who are unemployed can be easily supported by the friends, families and neighbours.

How does it benefit tourists?

If you’ve ever visited somewhere and loved it, it’s natural that you would want the local people to do well, firstly to keep it as it was when you visited, and secondly to encourage it to stay that way in future. Communities are better able to accommodate tourists and visitors when they have a thriving local economy. Poor local economies can lead to extremely high inflation rates, with local people unable to afford to live within their own community, which means that their capacity to accommodate tourists is much lower. When communities become poorer, they cannot prioritise luxuries and often end up living a very basic life or not developing as quickly as they should.

What’s the overall impact/outcome?

Essentially, this means fewer resources for inhabitants and visitors. This could be anything: lack of infrastructure (poor public transport, roads, electricity connections, WiFi, clean and safe drinking water), a dearth of local businesses (meaning less variety), unclean streets and other general issues which the council cannot afford to fix. By contrast, a booming local economy could have a great infrastructure: plenty of local businesses for tourists and locals to take advantage of, abundant resources (such as WiFi), safe drinking water, great public transport links, the list goes on, depending on what the council and people choose to spend their money on! Effectively, when money is invested back into local economies, everything is a little bit nicer.

A chalk board sign that says 'please knock the door | coffee | cappucino £2 | mocha £3 | Americano/d | Hot chocolate / latte | £2.50 | Extra shot 50p | Tea: breakfast, earl grey, green | £2 | Cash and cards taken' with a smiley face beside it on a stone pavement
We love tiny places like this cafe in the Cotswolds, which just served coffee to people passing by on the street!
So let’s get into it, how can you help?

There are so many ways you can help stimulate local economies, here are some of our favourites! We’ve also categorized them into activities which are suitable for beginners (i.e. people who aren’t as comfortable with off-the-beaten track travel), intermediate and then advanced (for all your rugged explorer types!)

Beginner-friendly methods
  1. Take walking tours – we truly believe this is easy for everyone. Not only are you with a guide, so you will generally be very safe, but you can also prebook a lot of them online and often they’re even free (though tipping is courtesy in most places). Our favourite companies for walking tours are GuruWalk and Sandemans.
  2. Stay in guest houses – it’s not a 100% guarantee that a guest house will be locally-owned, but it’s normally a pretty safe bet. The definition of a guesthouse really varies around the world, but generally it refers to a family-owned, inexpensive hotel alternative. You can read our full guide to finding the perfect guesthouse here.
  3. Buy your souvenirs anywhere but the airport! But also try to get them from a local trader, you might even find homemade goods and be supporting the local artists directly. Buying souvenirs at the airport (or at a large, polished souvenir trading depot style store) is a sure-fire way to divest your money directly from local economies, as it just won’t be circulated back to the locals at all. Often it goes to large corporate, overseas manufacturers who keep the profits themselves.
Confident traveller methods:
  1. Tip (where appropriate) – this one comes with a proviso that you need to check tipping culture and whether tipping is appropriate in the place you are visiting. For example, in Japan, tipping is considered offensive. In most countries however, tipping is a widely accepted part of local culture and tips usually go directly into locals pockets. It’s important to check with a local guide or online what is an acceptable amount so as not to offend
  2. Eat in local restaurants/cafes – this is intermediate because sometimes it can be really tricky to find non-chain restaurants and be guaranteed that they’ll be good. It does require a bit of digging and you might actually need to chat to locals! In some places, you’ll get lucky and find great restaurants on Tripadvisor, Google, OpenTable etc, but there’s normally a further step required to find out if they’re not chains. A quick check on the website will normally give us the answer and if they don’t have an official website, that’s pretty much your answer in one go! We always try to check the reviews across multiple sites too.

*If you have dietary requirements, subscribe for our upcoming guide to navigating local food with dietary requirements

Mariah, a Paraguayan tour guide, is standing against a railing with a view out behind her of a shanty town in Asuncion. She is next to a wall of graffiti with a large Japanese-style cat painted on it
We love taking tours with local guides like Mariah in Paraguay!
Tips for intrepid explorers!
  1. Haggling/local markets – we know haggling is scary, but shopping at places that require you to haggle (in some countries) is a guarantee that you’re shopping where locals shop. If you’re not sure what price to pay, try the rule of starting at half the asking price and standing firm, until they either cave or stop reducing their cost (in which case, go with their final offer, as that’s as low as they can go!). Remember that you can always walk away if they’re asking too much – just be prepared to walk pretty far otherwise they might follow you! When you’re haggling, try not to cave and go for their initial offer, even if haggling really scares you – overpaying can actually be really damaging to local economies and other tourists as it can create a skewed view of what tourists can afford and make everything more expensive for those who come after you.
  2. Get off the beaten track – always be smart, and don’t venture into places where locals tell you to avoid (hence why this is an advanced tip!), but often if you are in a popular place, you’ll find loads of undiscovered places just round the corner. Rather than going to the restaurant or cafe everyone goes to, why not try visiting their next door neighbour or someone a few doors down? You might be pleasantly surprised!
  3. Attend local events – reading what’s on guides or asking locals what’s going on seasonally is a great way to find something you might otherwise have missed. They do require a bit more digging to find, but the pay off can be really rewarding!

Let us know what we missed in the comments below! We love chatting to you and it’s great to know if you liked this post, so don’t be shy to reach out.

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Written by Emma Cartwright, 27 October 2023

Emma

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