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How to Stimulate the Local Economy When Travelling to Sun Destinations

When you pre-book tours and excursions through a company in your own country or the tour desk on a cruise ship, remember, you are working through middlemen. When you work through middlemen in any industry, everybody has to get their cut.
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It's been a rough couple of years. Funds aren't what they used to be. Perhaps you were even unemployed for a while. You've worked hard and you are long overdue for a vacation. Fortunately, you've grabbed an all-inclusive package and you're off to your favourite sun destination.

Everything is paid before you land. You're covered. You've even paid a 15% service charge so you don't have to worry about tipping... or do you? In parts of the world where wage rates are low, here is some food for thought.

If you think developed nations have had it rough since the global economic meltdown of 2008, developing nations have been hit even harder. Corporate and leisure tourism are cornerstones of the economy in many sun destinations. Tourism is a key driver of economic development, representing a significant percentage of the GNP. For example, Jamaica earns about 28.5% of its GDP through tourism. A significant portion of the population (about 24%) earns its living directly or indirectly through this industry. When you travel to sun destinations, to ensure that the workers in these industries get full benefit from the time you spend there, here are some things to keep in mind.

When you pre-book tours and excursions through a company in your own country or the tour desk on a cruise ship, remember, you are working through middlemen. When you work through middlemen in any industry, everybody has to get their cut. A significant portion of what you pay will get siphoned off and never reach the destination to which you are travelling. This will reduce what goes into the local economy. As a result, the attractions and workers will receive a fraction of what you pay. You'll contribute much more to the local economy if you book attractions, tours, transportation, and excursions locally and directly.

Here are some cold, hard facts. In Mexico, the minimum wage is 70 pesos per day. That's under US$5. In Jamaica, the national minimum wage, which came into effect on January 6, 2014, is J$5,600 per week. That's $64.90 Canadian and US$46.64. In Brazil, it's 788 reais per month (US$195). In Thailand, the minimum wage is 300 baht per day (about $10). Ouch!

The next time you travel to a sun destination, go into a supermarket and check out prices. You will be surprised at how close the prices are to what you pay at home. Compare this to what people earn. This means that in many sun destinations, workers count on tips to fill the gap, earn a livable wage, and make ends meet.

Let's get back to that 15% service charge. At some venues, the service charge is really an "admin" charge and it is not a "tip". Companies who book caterers for weddings, banquets and corporate events need to bear in mind the fact that the service charge is usually an "admin" fee not a tip for the waiters and waitresses. When in doubt, ask questions and clarify how the service charge is distributed.

Where do tips fit in? According to an urban legend, T.I.P.S. stands for To Insure Prompt Service. The story is that tips were originally introduced during World War II and paid in advance to waiters at busy establishments. Another story maintains that tipping originated during the 18th century as a way of rewarding loyal servants. Today, the thinking behind tipping is that a tip is paid for exceptional service. In many North American jurisdictions, the minimum wage for waiters and waitresses is lower than what other workers receive. The assumption is that they will make up the difference through tips. In the developing world, since wage rates are so low, tips represent a significant source of income for many workers in the travel and tourism industries.

In many hotels, venues, and dining establishments, tips that you add to the bill are pooled. The owners and managers get a cut. What is left is divided up among all of the workers. The bottom line is that the people who give you exceptional service end up getting a fraction of what you pay in tips. For this reason, be discrete and always hand the tip in cash directly to the person who serves you. Of course, if service is poor or staff is rude, you are under no obligation to leave a tip.

Important: Some resorts have a strict no tipping policy except for butlers, spa staff, and drivers. Always check.

What about taxi and bus drivers? Remember, many of them don't own the vehicles that transfer you to your hotel and shuttle you to tours, excursions, and attractions. The owners get a significant portion of what you pay for transportation. The drivers rely on tips for their livelihood.

Scrimp on tips and it will be a struggle for many workers in the tourism, travel and hospitality industries to provide the basics for their families.

The advice I have been giving to my clients is to consider bringing US$1 and US$5 bills with them whenever they travel to sun destinations. Use them to tip bartenders, porters, doormen, and bus boys as they go. Place tips for housekeepers and butlers in an envelope and hand the envelope to them directly. Here are some general guidelines:

  • Bartenders: $1 - $2 per drink.
  • Bellhops/Porters: $2 - $5 per bag
  • Housekeepers: $2 - $5 per day or $20 - $35 per week
  • Butlers: $20 - $30 per day.
  • Pay waiters and taxi drivers, a 10% tip if the service is good and least 15% - 20% if it is exceptional.

For more detailed guidelines consult The Ultimate Guide to Tipping Everyone.

Remember, for hotel staff, drivers, waiters, and tour guides who work long hours to ensure that your time in sun destinations is relaxing and enjoyable, tips can make the difference between making ends meet and struggling to provide for their families.

So, travel to sun destinations as often as you can afford it. Book tours, excurstions, and transportation locally. If service is good or exceptional, be generous with tips.

Anne Thornley-Brown, President of Executive Oasis International, is a Jamaican-born, Toronto-based team building specialist, corporate event planner, and blogger. She has planned and facilitated team building retreats and workshops and organized corporate events for clients in 14 countries including Canada, USA, Jamaica, Barbados, Dominica, Mexico, United Arab Emirates, The Sultanate of Oman, Singapore, Malaysia, and Thailand.

Follow Anne Thornley-Brown's company on Twitter and like the Executive Oasis International Facebook page.