Economic Development News & Insight


The Higher ED Blog: How would your community like $500,000,000?

Adrien Friesen / July 4, 2014

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The Higher ED Blog: How would your community like $500,000,000?

If you haven’t yet considered backpacker tourism as a potential tool for economic development, maybe it’s time. The province of Victoria, Australia published in their Backpacker Tourism Action Plan, the remarkable economic influx created through fostering and promoting the industry. The action plan states: “In 2007, 18.0 per cent of all international visitors to Victoria were backpackers, contributing close to $500 million to the local economy”[1]. This appears to be a persisting trend, with a more recent article in Forbes – Travel Boom: Young Tourists Spent $217 Billion Last Year, More Growth Than Any Other Group – asserting the lucrative horizons of this tourist subset now coming into light.

I myself have been involved in the industry both through research activities and independent travel. Stemming from this I saw fitting to focus my major research paper (MRP) on the purported benefits of backpacker tourism within local economies, given that this was a crossing point of two strong interests of mine. I chose to leverage existing literature for my study, provided that I would be focusing on the developing world while residing in Waterloo/Toronto. Had I have known that there were two rapidly-approaching international opportunities to work and live in Latin America I would have structured my methods accordingly with primary data collection. However, not knowing this at the time, I began my research by leveraging secondary data, examining the literature on economic impacts of backpacker tourism within the developing world.

Research Objectives


My research aimed to highlight some of the leading discourse in the industry and to underscore the impacts occurring within local host economies. To more effectively group and inspect the literature, a list of frequently mentioned backpacker benefits was created, lending them hierarchical status based on how frequently they were observed. The benefits from the industry were then cross-compared with one another to investigate geographical and temporal trends, aiming to highlight notable shifts in the phenomenon. Some common benefits to emerge from the analysis included: wider-spread impacts, fewer economic leakages, greater local control, and the multiplier effect, among others. The benefits listed in the study are expressed in comparison to traditional tourism forms i.e. mass tourism and packaged all-inclusives.

Additional Trends

Results revealed the top benefits to be closely linked to one another, and mutually supportive. Geographically speaking there is little literature available on Asia (excluding Southeast Asia) and South America prior to the 21st century, pointing to the fact that the backpacker industry is still relatively young in these regions of the world or at least with less academic awareness. Another notable outcome is the prevalence of South Africa and Australia in the literature, with significantly more research here than in other regions.

Backpackers of Today

Travellers are now venturing beyond the confines of beachside hotel chains and transnational tour company routes, presenting increased opportunity for these travellers to reach less-trodden paths previously neglected. National governments need to reconsider the potential benefits backpackers can offer for economic development. The travel style and motive of the backpacker is shifting as well, with a larger portion seeking to constructively contribute to the communities through volunteering and active participation, only further bolstering economic prospects. This all happens simultaneously to an increase in spending within an area, at a variety of local establishments and services, encouraging the entrepreneurial spirit of the community.

Living in Sucre, Bolivia

For the past five months I have been living in Sucre, Bolivia, serving a six month contract with the Federation of Canadian Municipalities (FCM) and Cuso International working on LED initiatives and the Municipal Partners for Economic Development (MPED) program. Observing the state of tourism in Sucre accurately speaks to my research paper, as the city is experiencing rapid tourism growth while preserving a sustainable level of local participation and control.

      [See also my excerpt on Sucre in the LED Exchange Newsletter]

A respectable portion of tourism services – e.g. hostels, cafes, tour operators – are managed as social enterprises, or incorporate some social aspects into their business models. They are often owned and/or operated by a foreign-local couple, or by a foreigner employing locals and putting an emphasis on community development. Several examples come to mind, yet one of my favourites is that of Randall Howlett, the Founder and Director of Condor Trekkers.


A Non-profit Success

Condor Trekkers is a trekking company based in Sucre that has recently expanded to also include a vegetarian restaurant, Condor Café. Randall has spent over three years building up the non-profit, working with local communities in and around Sucre and partnering with other social enterprises. Sitting at Condor Café, enjoying a strong cappuccino and listening to Randall tell his story was a real eye-opener; hearing of the countless obstacles he faced and political hoops he jumped through was only a mere glimpse into the challenges he faced to bring the non-profit to the level it is today.

With a myriad of opportunities like that of Condor Trekkers waiting to be harnessed, it’s a mystery why more local governments do not recognize the possibilities and be more proactive like the state of Victoria, Australia, and its bountiful $500,000,000 boast. The backpacker industry is an expanding and lucrative market; doesn’t your community want its slice of the $217 billion pie?

Part 2 to Come…

In Part 2 of my blog, I will take you through how Randall’s business has blossomed and reflects the very findings and economic benefits of backpacker tourism seen in my MRP.

 About Adrien

Adrien Friesen is a recent graduate of the University of Waterloo’s Master’s Program in Local Economic Development. His Major Research Paper was guided by Professor Brent Doberstein (University of Waterloo) and was carried out prior to his work contract abroad.

​As Adrien has recently completed his term with the Federation of Canadian Municipalities (FCM) / Cuso International in Bolivia, he is now back in the GTHA and searching out his next opportunity within the fields of planning, transit, and economic development. ​Adrien also holds a​n​ ​Honours ​Bachelor of ​Geography and Environmental Management​ degree from the University of  ​Waterloo.

About the series

Higher ED: Ivory Tower Insights for Economic Development Professionals was conceived as a way to share research completed by Local Economic Development (LED) students at the University of Waterloo. It features blog articles by current and recent LED students with cutting-edge insights.

Established in 1988, the LED program is the only Masters program in Canada devoted solely to local economic development. It offers a balance between theory and practice by combining coursework, a major research paper, an internship, and weekly seminars featuring guest speakers. Students are prepared for careers in local, community, or regional economic development.

[1] Backpacker Tourism Action Plan – Tourism Victoria:

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