An 'All-Inclusive' approach to measuring and managing impacts

"For almost as long as the concept of all-inclusive holidays has existed, there has been debate surrounding the impacts that this holiday type may have on destinations.

To date, however, there has been limited robust research conducted. All-inclusive plays a fundamentally important part in our total offer across TUI UK & Ireland, with the First Choice brand itself moving exclusively to all-inclusive from the summer of 2012. We plan to replicate this study at other hotels in 2011, in order to further both our knowledge and the benefits of all our holidays to destination stakeholders."
Johan Lundgren, Managing Director, Northern Region

All-inclusive hotels have been accused of poor working conditions and not contributing much to the local economy. And some consider them an eyesore and environmentally unfriendly too. But are they really as inherently unsustainable and irresponsible as they are being portrayed in some media reports? Surely it must be possible to improve their social and economic impacts? Does a board basis determine the sustainability of a hotel or is it the way it is managed?

These were the questions to which we sought answers, so in 2009 TUI UK & Ireland commissioned an independent report from a respected NGO. We joined forces with the Travel Foundation and asked the Overseas Development Institute (ODI) to conduct a detailed socio-economic study of our single largest featured property, the First Choice Holiday Village in Sarigerme, Turkey, which operates on an all-inclusive board basis.

We were able to establish not only the detailed economic impacts of the operation but also the views of local stakeholders, including local government officials, hotel employees and local businesses regarding the prevailing social impacts.

The findings of the project were significant and broadly positive with the vast majority of the benefits generated by the hotel staying in Turkey. However, the economic benefit for the local community was considered limited, and the study was able to identify recommendations to increase this.

The results

The study found that 46% of the total economic activity took place in Turkey. Only 7% of in-country expenditure was represented by imports and more than 650 locals were directly employed being paid an average of 25% more than national minimum wage. However, the study also highlighted the opportunity to improve local economic impacts: although much of the supply chain purchases were from Turkey they were not sourced locally and customer spending in the local village shops was limited.

As a result of implementing recommendations made by the ODI, labour conditions have further improved with better terms and conditions for staff and punctual payment of wages. There is more use of local staff accommodation – which reduced costs incurred by TUI UK & Ireland – and more fresh produce is being sourced locally. First Choice is also promoting the local village to guests by promoting a walking tour. Only six months after the initial report, an ODI assessment of impacts on the regional economy recorded an improvement of 16% (€0.8m).

Jonathan Mitchell of the ODI and one of the authors of the Turkey report said:

“In the 2010 season, the implementation of several recommended interventions was a classic ‘win-win-win’ for tourists, the tour operator and the local economy.”

Better measurement, better management

In 2011, we have conducted further studies at destinations including Tunisia and Rhodes. These studies will help us develop a set of robust socio-economic indicators for our differentiated holiday products, which we intend to pilot.

It is vital that we strive to measure and manage the social impacts of tourism just as we are able to do for environmental impacts. Our aim is to provide a holistic – you could even say ‘all-inclusive’ – picture of the sustainability impacts of our holiday experiences in our destinations.