How to Support Local Small Businesses When You Travel: A Practical Guide

Travel is often sold as a means for economic development; however far too often tourist dollars are spent in concentrated areas rather than small and locally owned businesses. Of course, we can say that some money trickles down to local populations, but not always as often as you think. As travelers, it is important for us to be good stewards of our experiences and support local markets when and where we can. Even with the best of intentions, it is admittedly challenging to do sometimes. I do my best, but it’s not always perfect. Given my extensive travel in the past few years, I am creating this guide to share my thoughts on this topic. By following these tips, you can ensure that your money and energy helps the small businesses while actually stimulating the local economies.

Why it matters

The “why” is important and it is personal to me. If you read about the ethos of Backpacking Diplomacy, the concept of our brand is really about human connection. Travel is a bridge and medium that brings people together and makes the world a smaller and more compassionate place. Travel is a gift and a privilage that not everyone gets to experience. As travelers, backpackers, and vagabonds we receive so much from the world. In my opinion, we become stewards of the experience and have an added responsibility to give in return where we can. Supporting local businesses is a great way to do that.

Leakage

Travelers may not be aware but money spent in a country does not always stay local. Often, there is leakage. Leakage is the share of tourist spending that leaks out of a local economy to foreign-owned chains, importers, and booking platforms. In some destinations a large majority of every tourist dollar leaks straight back out. By intentionally spending your money locally, you can mitigate some of the leakage and stimulate the local economy.

Connection and experiences

The case for spending your money at local small businesses is not purely an economic. In our experience, when you stray away from the well trodden tourist route the experience that you have will dramatically change. Tourist traps are frequently transactional. Attendants want you to pay then leave. However, when you go to a local place, you have interactions, conversations, opportunities to learn, share and grow. The experience of observing people in their natural life.

Consider the family run guesthouse, the grandmother cooking at the market stall or the artist running a small artisan souvenir shop, in many cases these people and places turn the trip into a meaningful memory. When I think about my travel experiences, the things I remember most are the people, the observations, the humanity and more often than not, the kindness.

Unfortunately, there are some people traveling out there who think that the locals should be thanking us for visiting. In my opinion, it’s the opposite. We should be thanking locals for allowing us to visit their beautiful country, eat their delicious foods, and explore their deep history.

Hot take: if you are not traveling to interact with locals, experience other ways of life or challenge your worldview, then why are you traveling?

Better deals

When you leave the heavily touristy areas, you will often find that you deal is better for you. Prices are lower. Scams are less frequent.

What can you do to help

Helping small business when you travel is not as difficult as you think. With intention, you can spread your money farther and make a lasting impact. There are many ways you can give back while traveling.

Once you agree with the “why” behind supporting small business, the what and how become more of framing, prioritization and intention. As you work this concept into your travel mindset, then it starts becoming more natural.

If I were to give you just 3 pieces of advice for supporting small businesses, then I would say:

Venture beyond the touristy zones

Tourist zones are frequently run by international chains, organized groups and government sectors. The city center is often too expensive for local artisans to survive. Go farther. Visit the outskirts. Explore a new neighborhood.

Buy local and pay cash

Credit cards and banking fees frequently hurt small businesses disproportionately. If you can, then offer to pay in cash to help the business owners avoid transaction fees.

Say yes to new experiences

Try new things. I find that when travelers leave their apprehensions behind and say yes, then they have deeper and more meaningful experiences. This indirectly helps people and provides a medium for meaningful cultural exchange.

How you can help

To build on the “why” and “what, I’ll offer here some specific examples of ways that you can help.

Sleep local: choose family-run stays over chains

Accommodation is usually your single biggest travel expense, which makes it the highest-impact place to start. Every night you book a locally owned guesthouse, family inn, or small B&B instead of an international chain, a far larger share of that money stays in the community.

I will admit that it does require more effort to choose family-run stays because of access and discoverability. It is not easy to easily find or more importantly identify a locally run business. In modern traveler, BnBs and apartments are rented on sites yet many of them are run by large businesses. They are marketed as local apartments, but they are owned and managed by private equity. It is a sad reality.

How to do it:

• Search for terms like guesthouse, pension, posada, pousada, parador, ryokan, riad, homestay, or family-run rather than defaulting to chain-hotel brands. These words signal local ownership in different parts of the world.
• On booking platforms, filter for “independent” or look past the first sponsored results, which are often the big players paying for placement.
• Read the “about” section. Owners who tell their own story are usually running the place themselves.
• In mountain and rural areas especially, family-run lodging is often the only authentic option, and the best one. In Puerto Rico’s interior, for example, the Central Mountains are full of family-run paradores, eco-lodges, and coffee-hacienda guesthouses with no big chain resorts in sight, which is exactly the point.
• Consider homestays. Staying in someone’s home is the most direct support there is, and the deepest cultural immersion you can buy.
• If you feel comfortable, then you could even consider Couchsurfing, which is a platform I’ve used for years.

It is worth mentioning that one added benefit of local hosts is that they are your best source of local knowledge. They’ll point you to the family restaurant and the neighborhood spot that no guidebook lists. Did you know that this was part of the origin of hospitality?

Eat where locals eat

Food is the easiest, most enjoyable place to vote with your wallet, and the gap between the tourist-trap restaurant and the local spot is enormous, both for your money and your experience.

How to do it:

• Walk away from the main square. Restaurants on the central tourist plaza pay the highest rents and serve the most diluted food. Walk five to ten minutes in any direction and prices drop while quality rises.
• Eat street food from busy stalls. A stall with a long local queue is a small business with a built-in quality guarantee. Street food is where a region’s real cuisine lives, and the money goes straight to the cook. (Our guide to Puerto Rican street food is a love letter to exactly this.)
• Look for the full room of locals. A restaurant packed with local families at lunchtime is the single most reliable signal you’ve found the right place.
• Order what the region is known for, not the international menu. Family kitchens do their local specialties best, and that’s what keeps the tradition going.
• Skip the hotel breakfast when you can and find a neighborhood café or bakery instead. You’ll eat better and spread your money wider.

Leave reviews

You and I both know, that most people will not eat at a place with bad reviews. Tourists will definitely not eat at a place that doesn’t have any.

I see this behavior so frequently with my friends. When we look for a place to eat, they immediately open maps, search for the places and check the reviews. You do the same right?

When you visit places while you travel, please consider leaving a review. I am not saying to leave a positive review. I’m saying to leave an honest review. If the place is great, then leave a great review. If the place needs work, then give them constructive feedback. In most cases, giving a business a one star review without feedback is borderline cruel and immature. Take a moment, share what could be improved, or how a visitor can navigate the place better. It helps. A lot.

Update maps and geo-location information

In the past few years, I’ve traveled nearly across the world and back. One of the biggest things that I have noticed is that there is a massive divide between digitized and non-digitized businesses. I absolutely adore the charm of the non-digitized world. There is nothing more appealing when you travel to see a local artisan and master of their craft, doing things, the old way. However, I’m also pragmatic in the sense that I have seen how tourist behaviors work. Businesses that are not accessible in the digital divide hurt the most.

In the digital age, a business relying on foot traffic might as well be relying on thoughts and prayers.

If you use OpenStreetMap, Google Maps, Apple Maps or any other alternative, then consider making updates to their listings (when they are inaccurate or non-existent). I have added countless small businesses to online map platforms. To do this, I usually ask the business owner if they would like it, then I collect a few details such as: the official name, number (if applicable), social media (if applicable), and I take some photos of the place to upload as well. Check the links above for instructions on how to add a place to maps.

Economics of maps

To some quick math here, let’s imagine that a local coffee vendor name Junya makes 5 coffee sales per day and in each sale they make $1.

Let’s speculate that hypothetically 10 people search for local coffee places per day. However, Junya’s shop is not currently only maps, so those 10 people go to another shop, likely a digitized coffee chain such as Starbuck’s, which provides consistency not good coffee.

Then let’s say that you add Junya’s coffee to makes, then you leave a review and add some nice pictures.

In the coming days, 2 of the 10 people who search daily then choose Junya’s shop over the chain.

2 people might not seem like a lot but since Junya originally sold 5 coffees per day and now sells 7, then you have helped Junya to increase his daily yield by 40%. $2 might seem insignificant, and this is just an example, but 40% of local business increase will be substantial to a small business.

You can increase the daily income of a small business substantially by helping their maps listings

I share a similar story of this below in the end of this article.

Buy crafts directly from the people who make them

Souvenirs are a chance to support real artisans, or to enrich an importer of mass-produced trinkets. If you travel to the city center of almost any city in the world, you will find souvenir shops lined with mass produced magnets, postcards and other regional gifts. It is safe to say that the vast majority of these products are made in places like China (or PRC which is the People’s Republic of China). I would venture to say, that buying a Chinese made magnet in Spain doesn’t really help local artists.

I challenge you to be intentional when you shop. Try to find locally made postcards to send. Try to opt for a local craft. Even if it costs a little more, to me it is worth it.

How to do it:

• Buy from the maker. Seek out workshops, artisan cooperatives, and craft markets where the person who made the object is the person you’re paying. Your money supports a living craft instead of a factory.
• Avoid the identical “local” souvenirs sold in every shop on the strip, those are usually imported and mass-produced. Genuine local craft looks different from stall to stall because a human made each piece.
• Ask about the craft. Artisans are usually proud to explain their work, and that conversation is half the value of the purchase. A small town like Yauco in Puerto Rico, with its local artist movement and street vendors, is a good example of a place where craft and community are intertwined.
• Don’t haggle to the bone. Where bargaining is customary, bargain with good humor, but remember that the few extra units of currency you’re fighting over mean far more to the seller than to you. Don’t get ripped off, but also don’t be cheap.

Get around like a local

How you move also moves money. The transport choices that support local people are usually the more interesting ones anyway. Rideshare apps can help locals but also congest roadways for locals.

Local modes of transit also enable the best opportunities for interaction and to see the local way of life.

How to do it:

• Use local transport, public buses, shared vans, regional rail, where it’s safe and practical. The fare stays local, and you see the place at street level. (In Puerto Rico, our getting around the island guide covers the local options.)
• Take licensed local taxis over international rideshare apps when you can. I actually hate taxis. I have more negative experiences with them than positive ones, but there are good people out there. Booking a driver directly can help them to mitigate platform commissions and fees.
• Rent from a local outfit rather than a global rental chain where a reputable one exists.
• Walk and bike. Free, low-impact, and it puts you on the small streets where the small businesses are. It is also environmentally friendly and gives you the best chance of stumbling upon a random place. That’s why I walk!

Book tours and guides locally

A guided experience can channel money to local families and support

How to do it:

• Hire independent local guides rather than booking through a large international operator. Ask your guesthouse host for a recommendation, this is where local lodging pays off again.
• Choose small-group, locally owned operators. They keep more of the money in the community and usually give a more personal experience.
• Look for community-based or cooperative tourism, increasingly common worldwide, where the village or community collectively runs and benefits from the tourism.
• Tip your guide well and directly. For many guides, tips are a meaningful part of their income.

Make an attempt at the local language

The local language is a big part of the local economy. The language is how transactions are made and how people survive everyday. Although it may seem easy to just speak English everywhere, the local language helps keep the soul alive.

Pay cash

The mechanics of how you pay quietly affect how much of your money reaches the business.

How to do it:

• Carry cash for small vendors. Market sellers, street-food cooks, and tiny shops often can’t take cards, or lose a painful percentage to fees when they do. Cash means they keep all of it.
• Use local ATMs and avoid dynamic currency conversion (when a card machine offers to charge you in your home currency, decline, choose the local currency).
• Tip appropriately for the country. Learn the local norm, then honor it. Tipping is direct, immediate support. Though please do not tip when a tipping culture does not exist.

Ultimately, spread the love

Small habits multiply your impact.

How to do it:

• Spread your spending across many small businesses rather than giving it all to one. More families benefit.
• Leave reviews for the small places you loved. A genuine, specific online review is free, takes two minutes, and is one of the most valuable things you can give a small business, it sends the next traveler their way. This may be the highest-leverage thing on this whole list.
• Follow and share their social accounts, and tell other travelers. Word of mouth is lifeblood for a small operator.

A quick mental rule

When you’re not sure, ask yourself: does this {item} seem like it will support a family business or is it just a big business? In many cases, when dealing with family guesthouses, market vendors, and independent guides, the majority of the money is more likely stay local. With chains and big brands, it is most likely lining the stock market.

Be kind to yourself. You won’t get it right every time, and you don’t have to. Your intentions speak volumes and make an impact.

This is also, not coincidentally, how you get the better trip. The most memorable meals, stays, and encounters almost always come from the small, local, human-run places. Supporting them isn’t a sacrifice you make for ethical reasons; it’s the secret to traveling well. It’s the heart of how we try to travel: eating local, acting local, and taking part in the life of a place rather than skating over the top of it.

My experiences

Supporting local businesses has become a part of my travel plans. I go out of my way to do it and plan on trying out as many local establishments as I can.

Pinchos shop in Puerto Rico

I have spent extensive time traveling around the beautiful island of Puerto Rico. I remember one night I was traveling in the north region and I was craving a popular Puerto Rican street food known as pinchos.

I searched online but could not find anything. Nothing was open. Nothing was near me.

While driving back to my hotel, I saw a light on the side of the road. As I got closer, I realized it was a small restaurant selling pinchos. Alas!

I stopped went to the attendant and ordered pinchos. As I waited for my food, I asked the owner some questions about the business. I asked him what the name was and how people would normally find it. He said, Facebook! Facebook I said!?! Who searches on Facebook for food to eat. Not me at least.

So I asked him, do you want more people to find your business? Yes, of course he said. I explained to him that most people searching for food would likely do it through Google Maps or an alternative and would check the reviews. I asked him if he would like to have his business on the platform. He said, that would be great. I took some pictures of him cooking, the plates of food and general hours of operation. I got a link to his Facebook page. Then I added all the details to Google Maps at the precise location of his business. From that point on, anyone craving pinchos at night on the weekends, should have found his place.

I don’t have an ability to provide a case study on the economic impact, but I can say that my review there plus the images I added have tens of thousands of views. I’d hope at least a few of those views connected with him.

The point is do what we can, contribute where we can and let the rest take its course.

Final thoughts

Hopefully by now, you are thinking more about different ways that you can support small businesses when you travel. I’d like to believe that it’s the right thing to do. I hope you do too.

We vote with our money. Let’s vote local.

FAQ

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Wherever you’re headed, the principle travels with you: send your money to the people who make the place. Have a favorite local business or a tip we missed? Tell us about it, we love passing good ones along.