During the last decade, the growth of international travel to developing nations grew by 94.4 percent, compared to a growth rate of only 34 percent for developed countries.1 Tourism therefore represents a key industry in which developing nations have an opportunity to overcome poverty by investing in tourism initiatives. This growth, matched with the growth of ecotourism and the overall greening of tourism as a whole, has led to an increase in economic development models looking at using tourism as an incentive to protect the environment. The challenge in developing such programs is to create economic opportunities for local communities that incentivize the protection of local natural and cultural resources. The question for policy makers, donors, and investors is not only how much tourism contributes to local economies, but also how to show local communities the benefits of such initiatives.

The SEEP Network, in an effort to explore these questions, supported the development of a measurement tool to attempt to quantify the direct and indirect impacts of tourism on local communities in Central America. This paper reviews how the information generated by the measurement tool can be used to assist communities, businesses, and policy makers in understanding the real and potential impacts of local tourism.