Foreign direct investment in tourism, poverty alleviation, and sustainable development: a review of the Gambian hotel sector

Despite the growing importance of foreign direct investment (FDI) in tourism for developing countries and its perceived developmental importance, there are few empirical impact studies. This paper explores tourism FDI and poverty alleviation through both the literature and a detailed review in The Gambia of the relative contribution of foreign versus locally owned hotels to development and poverty alleviation. Data was collected via an in-depth questionnaire with senior hotel management and through key informant interviews with tourism officials and stakeholders. The study provides empirical evidence of the relative characteristics, performance, and benefits of foreign investments, suggesting that different forms of hotel ownership have complex advantages and disadvantages for poverty alleviation. FDI was concentrated in larger, upmarket hotels, which tended to employ more staff, pay higher wages, and provide more training. However, they had a lower proportion of women employees and employment was more likely seasonal. They have more high-skilled positions, potentially offer staff mobility, but have more expatriates in management roles. Local food purchases were similar across hotel ownership types, as were local philanthropic initiatives, although there were differences of approach. Some resident foreign owners were involved in successful best practice community-linked businesses, driven by social service and environmental ethics.