Abstract
Tourism is an unusually important economic sector for the Small Island Development States (SIDS). Islands are the second most visited destinations after historic cities. The SIDS tourism is usually dependent on foreign investment and in the form of All-Inclusive (AI) system. Few studies have evaluated the economic impact of tourism on the economic development and/or poverty reduction of a SID using macro level data. And little research has used micro/firm level data to investigate the impact of tourism on the local economy of SIDS. This paper aims to evaluate the local benefits made from the development of tourism in SIDS, in particular the contribution of AI accommodation using the case of Cape Verde. It makes two main contributions: it makes the first attempt to use microeconomic data at the company level to examine the contribution of tourism in SIDS; it uses empirical data to examine the impacts of AI accommodation on the local economy. A semi-structured hotel questionnaire was applied to 13 accommodation managers and hotel owners, from small guest-houses to large 500 room All-Inclusive resorts in Sal, Boa Vista, Fogo, and Santo Antão. The results indicate that for destinations at an early stage in their development, large-scale AIs may be the most effective way to achieve the growth of tourism to the point that a critical mass is achieved.