Cost and benefits of Transnational Corporations (TNCs)
| Stakeholder |
Benefits of TNC involvement |
Costs of TNC involvement |
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Tourists
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Tourists can choose a branded hotel that they will be familiar with such as the Marriott Hotel company which can be found in over 7642 properties globally
The Marriott Hotels are similar in style around the world which means that people may want to choose a hotel or service they recognise
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Lack of choice because large hotel chains now have spread into countries around the world
Hotel prices can increase because people are willing to pay more for a recognised brand
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Tourism employees at the destination
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People who are employed may receive regular income and employment benefits
Development of employee skills
TNCs often franchise their hotels which means that people or companies can purchase the name of a well-known hotel company increasing brand awareness
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If a TNC withdraws from the country employees will be left without work
Companies who franchise do not necessarily treat employees as well as if they were working for the company directly
Leakage - money goes to TNC home country not the destination
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Local people at the destination
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Taxes generated are used to create new infrastructure which benefits the local people as they have better access to improved roads and hospitals
Increase in foreign direct investment (FDI)
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Some would argue that when Western tourists visit new destinations then the locals may lose their culture, and language and be influenced by foreign foods and architecture
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Employees based at the head office
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TNCs such as Booking.com have shown their interest in social responsibility initiatives and focused their work on gender equality
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Women’s positions in the company do not match that of men and only 30% of the top positions are held by women
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Environmentalists
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Marriott International (TNC) have used the UN Sustainable Development Goals as part of its environmental responsibility
Increased airport availability has meant that some companies have invested in state infrastructure such as mass transit which anyone can use
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TNCs spend millions on marketing each year encouraging tourists to fly to many destinations increasing carbon emissions
Airports are increasingly being built outside of major cities to deal with tourist demand
Tourist activities may lead to an increase in environmental pollution
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