Rethinking Sustainable Hotel Growth in Emerging Destinations

In recent months, across Latin America, conversations about tourism, development, and displacement have become increasingly visible not only in policy debates, but also in music, art, and popular culture. Bad Bunny’s recent album DTMF is one example of this reckoning, giving voice to frustrations about gentrification, and who ultimately benefits from “development.” These themes have been further amplified by the album’s recognition at the Grammy Awards and by their resonance on one of the world’s most visible cultural stages, the 2026 Super Bowl halftime show.

For many people in the region, these dynamics are not new. The most recent reminder came during a stay at a beachfront hotel in Costa Rica. One morning, during an early walk along the shore around 6 a.m., with a cup of coffee—a familiar ritual for many beachgoers—a small group of local workers was emerging, pushing heavy carts toward the sand through a narrow public access path between two beachfront hotels. Access points like this exist all along Costa Rica’s coastline. They are sometimes hidden and sometimes inconvenient, winding behind buildings that seem designed to forget that the beach is shared. The workers moved slowly and deliberately, as if trying not to disturb the quiet.

This was not an unusual sight. On many beaches in Costa Rica, it is common to see local people setting up activities early in the morning—coconut vendors, surf instructors, massage therapists—long before most tourists are awake.

Walking back toward the hotel, the same group could be seen raking leaves into neat lines, picking up cups and bottles left behind the night before, and gathering plastic that had washed ashore. After the beach was tidy, they unfolded a few massage tables and placed a sign in the sand advertising massages, horseback riding, and jet ski rentals.

As the hotel entrance came into view, one of the workers smiled and said, “Buenos días, muchacha. Aquí estaremos si necesita algo.”

Later that day, the beachfront felt very different. At the edge of the sand stood the police.

The same workers were there, visibly upset. Their carts were being dismantled. Massage tables were folded back in. Signs were pulled from the ground. The police were confiscating their equipment. They were told they could not offer their services on the beach.

In Costa Rica, no one owns the beach. Hotels may crowd the shoreline, shaping how people enter and move through space, but by law the sand itself remains public. This principle is often celebrated as part of the country’s commitment to sustainability and social equity. Yet standing there, it was clear that access and enforcement were being applied selectively. Just a few feet away, the hotel’s loungers and umbrellas remained exactly where they were, untouched. No rules applied there.

As the scene unfolded, a tourist family staying at the hotel sat nearby, watching closely. The adults murmured that the workers should be arrested. One of the children laughed and said that handcuffs would have made it more interesting to watch.

​​In that moment, the language of sustainability, community engagement, and responsible tourism felt hollow.

Later, it became clear why the police had been called by the hotel. Executives from the hotel chain were visiting for lunch. The beach needed to look clean, polished, and controlled. Free of informal activity. Free, it seemed, of the very people who had cared for it that morning.

Legally, the beach was still public. But belonging is not determined by law alone. It is shaped by power—by whose presence is considered acceptable and by who is asked to disappear when appearances matter most.

That day, the incident raised a deeper question: what does community engagement really mean if local communities are welcome only when they are invisible? If hotels celebrate volunteer days and donations while at the same time calling the police on local informal workers whose livelihoods depend on the same land, what kind of sustainability is being practiced?

Tourism does not exist in a vacuum. Neither do tourists. How we behave as visitors, what we tolerate, and who we choose to see—or ignore—are all part of the system. The beach may belong to everyone in theory. In practice, it belongs to those whose presence aligns with comfort, control, and carefully curated ideas of what paradise should look like.

Avoiding Extractive Hospitality: How Hotels Can Build Stronger Community Partnerships

In many emerging destinations, tourism promises opportunity. New hotels bring jobs, investment, and international visibility. However, beneath this narrative is a reality that is rarely discussed in hospitality circles, often described as extractive hospitality. Extractive hospitality occurs when tourism businesses benefit from a destination’s culture, landscape, and identity while local communities have limited participation in the economic value being created. The destination becomes a resource to be used rather than a community to be partnered with. Local culture is marketed in brochures and social media, but local people often remain outside the economic core of the tourism experience.

One way to understand this is through the difference between community-adjacent and community-integrated hospitality. Community-adjacent hospitality operates near local communities but keeps them at a distance from the value chain. Hotels may promote nearby markets, artisans, or neighborhoods as attractions, but these relationships remain informal and peripheral. In contrast, community-integrated hospitality actively builds local participation into the tourism ecosystem. Local vendors, guides, and entrepreneurs become part of the guest experience, allowing more of the economic benefits to remain within the destination.

As tourism continues to grow, these dynamics become more visible in shared public spaces. In many destinations, rising visitor numbers are increasing friction between visitors and residents. In some cases, visitor-to-resident ratios are projected to rise by more than 50 percent, intensifying pressures on public spaces and highlighting the need for tourism environments that benefit both groups.

A major issue is the way the hospitality industry often views informal economies. In many destinations, beach vendors, small food stalls, and local guides are treated primarily as risks to be controlled rather than as contributors to the visitor experience. They are often framed as threats to safety, brand standards, or operational order. As a result, policies and design decisions tend to push them out of visible tourism spaces.

The language used to justify these exclusions reveals a deeper tension. Terms like “security,” “order,” “curation,” and “protecting the guest experience” can mask questions about who belongs in tourism spaces and who does not. While safety and quality standards are important, they can also become convenient ways to exclude local economic activity that does not fit a polished global brand image.

For hospitality leaders, the challenge is whether destinations can move beyond models that primarily extract value from place and culture. Future hospitality leaders may need to focus less on controlling the destination environment and more on integrating the communities that give destinations their meaning.

Micro-Entrepreneurial Ecosystems: Integrating Local Vendors into the Luxury Value Chain

The local vendors described in our Costa Rica story are not disruptions—they are micro-entrepreneurs, and their inclusion is vital to creating a financially viable and socially sustainable ecosystem within the luxury hospitality value chain. Their exclusion, however, remains the norm. Tourism leakage, defined as the percentage of total tourist expenditure that fails to remain in or even reach the local destination’s economy, is a significant issue, particularly in the least developed countries. The Travel Foundation report indicates that this leakage typically ranges from 50% to 80% of the total tourists spend. High-end tourism in Bali experiences over 55% leakage, particularly with 4- and 5-star hotels. The problem is even more pronounced in locations like Bwindi Impenetrable National Park in Uganda, where leakage exceeded 75%. Furthermore, the Caribbean region faces an estimated tourism leakage rate of 80%.

Reversing this pattern requires more than goodwill — it requires deliberate integration mechanisms. Across the luxury segment, several brands have recognized that local vendors are not peripheral actors but essential contributors to destination resilience. These mechanisms take concrete forms: vendor certification programs that formalize informal workers without displacing them, hotel-curated locally owned experiences that embed community members into the guest journey, and training and safety partnerships that develop suppliers rather than exclude them.

Fogo Island Inn, owned by the charity Shorefast, reinvests 100% of its operating surpluses into the local community. Local artisans built nearly all the furniture and furnishings inside the inn, giving rise to a standalone social business called Fogo Island Workshops. The inn now contributes roughly 1 out of every 3 dollars circulating in the island’s economy, with 25–30% of island households receiving direct employment income from its activities—a model studied by IMD Business School as a case in social entrepreneurship and regenerative economics.

Other luxury industries have already internalized this shift. Fashion houses invest in preserving artisan ecosystems because authenticity drives pricing power. Safari operators embed revenue-sharing models because conservation depends on community legitimacy. The same principle holds in hospitality: when local vendors are integrated into the value chain, destination identity deepens rather than dilutes. When economic value circulates locally, resilience increases. When it is extracted, backlash follows — and hotels risk losing the very authenticity their guests came to experience.

Measuring What Matters

Many hospitality CSR reports highlight metrics such as employee volunteer hours, one-time donations, or annual impact days. While these numbers show engagement, they often measure activity rather than deeper structural impact. In some cases, they risk becoming symbolic gestures or PR-friendly moments that look good in reports but do little to change how tourism operates. It is similar to environmental sustainability reports that celebrate how many bottles are recycled without asking why so many bottles are used in the first place. Recycling matters, but it does not address the root cause. The same applies to volunteer hours if they are not connected to long-term community integration.

What these metrics fail to capture is structural. Volunteer hours do not tell us whether local vendors have meaningful economic access to the spaces tourism occupies. Donation tallies do not reveal whether communities have any role in deciding how those spaces are managed. Annual impact days say nothing about conflict — about whether a hotel’s presence has made life easier or harder for the people living around it.

In the Costa Rica story that opened this article, a hotel could report an impeccable CSR record and still have called the police on the workers who cleaned the beach that morning. Economic access, power sharing, and conflict reduction are invisible in today’s standard reporting frameworks. That invisibility is not neutral. It is a design choice.

As the management principle often attributed to Peter Drucker reminds us: what gets measured gets managed. If hotels only measure what they return through charitable gestures, they will continue to optimize for charitable gestures. A more useful set of indicators might include the percentage of local vendors economically integrated into hotel-adjacent tourism spaces, the stability of local informal incomes over time, and — perhaps most importantly — local community perceptions of whether tourism in their destination feels legitimate. These are harder to quantify, but they are not impossible to track. Destination management organizations, community surveys, and participatory audits already exist in other sectors. The question is whether the hospitality industry is willing to ask harder questions and act on the answers.

Why Authentic Destination Stewardship Is the Next Core Competency

For a long time, hotels treated the destination as a beautiful setting to market, package, and sell. Sustainability meant responsible messaging, a handful of partnerships, and photos that suggested good intentions. But a destination is not just scenery. People work there, raise families there, and deal with the costs of tourism long after guests check out.

This is where the shift from destination marketing to destination stewardship begins, and the difference matters more than it might seem. Marketing sells the destination, whereas stewardship protects it. McKinsey’s 2024 Destination Readiness report found that 80% of travelers visit just 10% of the world’s tourist destinations, and when those flows go unmanaged, they burden infrastructure, erode the cultural fabric, and wear down the daily lives of the people who actually live there. For hotel brands, this becomes a business concern just as it is an ethical one. Authenticity has become part of brand resilience, and when local communities feel pushed out, the story goes beyond the beach. It shows up in protests, policy battles, and reputational damage that no campaign can undo.

And yet the gap between what the industry says and what it does remains wide. McKinsey found that while destinations increasingly recognize the need to reinvest in local communities, the mechanisms for doing so remain underdeveloped, and residents are too often left absorbing the costs of tourism growth rather than sharing in its rewards. That gap is precisely where community-washing takes root.

Across Latin America, this tension has moved from policy papers into popular culture. Bad Bunny’s DTMF is a reckoning about who development is really for, and who gets asked to disappear when appearances matter most. When that conversation reaches the Grammy Awards and the Super Bowl halftime show, it changes what travelers notice. Travelers are arriving with sharper questions, and the World Economic Forum has named the core contradiction directly: what looks like innovation from a consumer perspective can feel like displacement from a community one, and that is not a gap that better marketing can close. Destination stewardship starts when hotels start bridging that gap.

Local livelihoods are not a liability to manage but an asset to protect, and the communities that animate a place are often the very reason travelers come in the first place. In a region where the costs of tourism have fallen disproportionately on the communities that make it worth experiencing, stewardship is not a differentiator but an overdue debt.

A Leadership Question for Global Hotels: Balancing Global Standards with Local Economic Integration

Global hotel brands rely on consistency. Guests expect a certain level of service, safety, and quality, regardless of where they travel. For large corporate hospitality groups, these standards are essential to protecting brand trust across properties. Yet in many emerging destinations, applying the same operational rules across destinations can create tension with local economic realities.

What may appear as neutral standards are often shaped by perspectives developed in corporate offices far from the destination. Policies related to security, vendor access, or public space management are often framed in terms of order, safety, or brand protection. While these concerns are legitimate, they can also unintentionally exclude informal economic actors who have long been part of local tourism ecosystems. Beach vendors, small food stalls, and independent guides may be viewed as operational risks rather than participants in the visitor experience.

The challenge is that uniform policies are often applied in environments that operate very differently from the systems where those policies were originally designed. In many destinations, informal work is not an exception but a central part of the local economy. When hospitality standards restrict these actors from participating in tourism spaces, they may also limit opportunities for communities to benefit from the tourism growth happening around them. In this way, policies designed to protect brand consistency can unintentionally reinforce the extractive dynamics that many destinations are trying to move away from.

This is where leadership choices become important. One approach is to create stronger channels for local voices in decision-making. Advisory councils that include community leaders, local entrepreneurs, and destination stakeholders can help hotels better understand how their policies affect the surrounding environment. These conversations can reveal practical ways to maintain safety and quality while still allowing local economic participation.

Decentralization can also play an important role. Allowing regional teams more flexibility to adapt corporate guidelines to local contexts does not necessarily weaken governance. In many cases, it strengthens it. Local leaders often have a deeper understanding of the social and economic dynamics that shape a destination. When global standards are paired with local insight, hospitality businesses are better positioned to create systems that work for both visitors and the communities that host them.

Conclusion

The morning the workers were cleared from the beach, they had already done what the hotel could not: they had cared for it. They had raked the sand, gathered the plastic, and shown up before dawn to make it beautiful for people they had never met. What happened next was not a story about safety or brand standards. It was a story about who gets to belong.

Bad Bunny’s music puts a name to a feeling that millions across Latin America already know. Development arrives, the scenery gets packaged, and the people who made a place worth visiting are asked to step aside. The Grammy stage and the Super Bowl halftime show did not introduce this tension — they reflected it back to an audience that had largely been looking away.

Hotels cannot resolve displacement on their own. But they can stop contributing to it. They can measure what actually matters. They can build integration mechanisms that treat local vendors as partners rather than liabilities. They can ask whose presence they have made invisible — and why.

The beach belongs to everyone. The question is whether the industry is ready to act like it.