Strengthening backward economic linkages: Local food purchasing by three Indonesian hotels

Abstract

Tourism is used to generate income and employment in developing countries but the industry has been criticized for having high external leakages. If destination areas are to maximize benefits from tourism development, ways must be found to increase backward economic linkages, including utilizing local food products in the tourism industry. Large-scale hotels in developing countries are often portrayed as importing a large proportion of their food supply and having minimal contact with local economies. The purpose of this paper is to compare food purchasing practices, policies and behaviours of three different hotels (five star, four star and non-star) in two locations in Indonesia between 1994 and 1995, illustrating the possibility of using local products. Research methods included detailed analysis of purchasing records, observation of operating procedures and interviews with hotel staff and local suppliers. Both star hotels were found to have strong linkages to their respective local food supply networks. The non-star hotel relied almost exclusively on local products. Smaller accommodation estab lishments have largely been ignored in the literature with respect to food purchases. With a high reliance on local food, numerous smaller establishments, on a cumulative basis, are just as important as larger hotels. Regression analyses indicates a positive relationship between occupancy rates and food purchases for star hotels with large restaurants. However, other factors such as special events and loca tion, also need to be considered. Future research questions are also presented.