Last updated on February 20th, 2024

When people eat, partake in entertainment and travel, they are setting in motion a series of interactions that can help a local community’s economy thrive.

According to Cumberlandbusiness.com, “When you choose to shop or dine at a local business or restaurant, you generate almost four times more economic benefits for your local community.” Fundera reports that when you spend $100 at a local business, about $68 stays in your local community. How is that possible?

It starts with the money a customer spends at a restaurant, hotel, and/or entertainment venue. In turn, those venues pay taxes on income earned and, at least a portion of those taxes get reinvested in the local community’s schools, roads, infrastructure, and more.

The money spent at a local restaurant, hotel, or entertainment venue also helps cover payroll for a business’ employees. In turn, those employees likely spend some of those earnings at other local businesses, whether it’s to put gas in their cars, food on the table at home, or just some retail therapy during breaks. If those employees and business owners live locally, they’re also adding to the local revenue and tax base every time they purchase oil or wood to heat their homes, pay for local recycling services, and more.

Additionally, restaurants, hotels, and entertainment venues are likely purchasing supplies – from food and toiletries to furniture and more – from local businesses. They may also be spending locally on business-related services like accounting, banking, cleaning, maintenance, printing, plumbing, heating, marketing, legal, and snow removal, to name just a few.

Hospitality businesses oftentimes serve as sources of referrals for one and other, as well as local tourist attractions, via flyer displays, placemat advertisements, and verbal recommendations. So, the cycle of spending – and collecting tax dollars within a community – continues.

There’s more. Community-based organizations and non-profits often depend on local hotels, restaurants, entertainment venues and other businesses for financial support, donations, and volunteers for their own fundraisers. According to TheFulfillmentLab.com, “52% of small business owners donate to charity, and of those that donate, 90% donate to local causes.” Again, a portion of funds raised likely get reinvested back into the local community.

There are also big picture benefits. When local hospitality establishments succeed, it can help a community attract and retain other employers, which can translate into more jobs, skills, and tax dollars.

Beyond financial benefits, hospitality businesses fulfill important social and emotional needs. In fact, a study conducted by  TheCustomer, Brand Keys, and Suzy during the Coronavirus quarantine found that the first thing people wanted to do once quarantine restrictions were lifted was eat in a restaurant (that was followed by get a haircut/go to the salon and shopping.)

When hospitality businesses take advantage of all the opportunities available within a local community, and combine that with disciplined business practices as measured by key performance indicators, they not only promote their own success but that of the surrounding community as well. That benefits everyone.