8 August 2018

Multiplier effect: Hotels also benefit surrounding regions

Hotels do not only cater to the well-being of their guests but also have a positive impact on regions and entire countries.

Toscana Resort Castelfalfi

Examples include Castelfalfi in Italy: A decade ago, the Tuscan hamlet belonging to the municipality of Montaione was an almost abandoned village until TUI Group acquired a former country estate. Since then, TUI has transformed Castelfalfi into a high-quality tourist resort. The tourism group now employs around 200 people in TUI’s hotels, the agricultural estate and the real estate section. The majority of the employees are from the region. A further 200 to 250 people outside the resort benefit from cooperation schemes with local laundries, construction companies and other service providers working for TUI and the resort.

Another example is the island of Mauritius in the Indian Ocean: At almost 10,000 US dollars, Mauritians ranks third in terms of gross domestic product per capita in Africa. Overall, the tourism sector accounts for around a quarter of total added value and one in four jobs in Mauritius. TUI Group plays a leading role in the development of Mauritius, for instance through its hotel subsidiary RIU, which employs around 400 people in two hotels on the south-west coast of Mauritius. TUI works with local suppliers in all its hotels.

Positive development benefits from various effects

Riu Hotels, Mauritius

As the two examples show, tourism is a driving force behind economic development, and hotels contribute essentially to the development of the surrounding regions through multiplier effects. “To begin with, hotels create jobs and thus secure people’s livelihoods,” says Andreas Vermöhlen, Manager SustainabilityTUI Group. However, this does not only benefit people directly employed by a hotel or working in the tourism sector, but, for instance, also those working for wholesale or manufacturing companies. In Bulgaria, for instance, one in nine wage earners earn their living in the tourism sector – the travel industry creates many different effects. “We owe the positive development of the Bulgarian travel sector above all to TUI,” says Radi Naidenov,Bulgaria’s ambassador to Germany. “In a number of ways: The company has created awareness of Bulgaria as a destination. Through the expansion of its flight connections, TUI facilitates encounters between more people from the two countries. And in hotel management, we benefit from the travel group’s know-how. The professionalisation of the sector benefits entire regions: it leads to infrastructure improvements, new contracts for construction companies, and new sales opportunities for farmers.”

Hotels as cultural mediators

Riu Creole, Mauritius

Apart from economic effects, hotels also offer further benefits: Certain hotel concepts now offer their guests valuable insights into the culture and encounters with the life of locals in the region. “Our TUI Blue hotel brand, for instance, places authenticity and regional experiences at the core in order to offer our guests holiday encounters with the surrounding region”, says Vermöhlen. As early as the 1990s, TUI was also the first major tour operator launching its own environmental management activities, which developed into its sustainability management programme over time with the inclusion of additional topics such as child protection or observance of human rights. “In implementing these topics, hotels can certainly also create positive and inspiring effects for their surroundings”, says Vermöhlen.