The tourism leakage paradox: innovative local sourcing models to maximize economic retention

Authors

  • Abdelhak Djenane Mohamed Khider University of Biskra
  • Hammoudi Dalel Mohamed Khider University of Biskra

Keywords:

tourism leakage, local sourcing, economic retention, sustainable tourism, JEL Classification: L83, R11, Q56, O18

Abstract

This article examines the tourism leakage paradox, whereby a significant share of tourism-generated revenue fails to remain in destination economies, limiting local development benefits. Despite tourism’s potential to stimulate employment and income, high reliance on imported goods, foreign ownership, and external supply chains results in substantial economic leakage, particularly in developing, rural, and island destinations. The paper conceptualizes leakage from both supply-side and demand-side perspectives and identifies local sourcing as a strategic response. It reviews innovative models such as supply chain localization, community-based procurement, inclusive sourcing, circular economy practices, and public–private partnerships. These approaches aim to strengthen regional value chains, enhance small and medium-sized enterprise participation, and increase multiplier effects within local economies. The study highlights policy, governance, and institutional mechanisms that support economic retention while acknowledging structural and capacity constraints faced by destinations. Overall, the article provides a comprehensive framework for destination managers and policymakers seeking to maximize tourism’s local economic impact.

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Published

2026-01-17

How to Cite

Djenane, A., & Dalel, H. (2026). The tourism leakage paradox: innovative local sourcing models to maximize economic retention. International Journal of Economic Perspectives, 20(1), 175–187. Retrieved from http://ijeponline.org/index.php/journal/article/view/1266

Issue

Vol. 20 No. 1 (2026)

Section

Peer Review Articles
Copyright & Licensing

Copyright (c) 2026 Prof. Yener Sönmez

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