The Power and Influence of Social Media on Local Economy and Tourism

In today’s digital age, social media has become a powerful tool for revolutionizing tourism and transforming business growth. 5.17 billion people are estimated to have been active on social media in 2024, showing its immense influence on daily life. With humans being social creatures who get easily intrigued by visuals and sounds, we are influenced by social media’s visual appeal, combined with influencers and trends, which also contributes to the soft power of nations, fostering connections that drive global influence. By promoting culture, values, and destinations, social media has become a platform for countries to enhance their global reputation, shaping perceptions and creating cultural ambassadors. This connection and ease of access to global audiences has made social media one of the most effective marketing tools available, with platforms like Instagram, TikTok, Facebook, and YouTube allowing individuals, countries as well as businesses, regardless of size, to reach millions of consumers with minimal investment, breaking down traditional marketing barriers.

Creative Videos and Content Virality

Creative video content, particularly on platforms like TikTok, Instagram and YouTube, has revolutionized how brands engage with their audiences. A study by Sprout Social revealed that 44% of people prefer video content to learn about new products, with 87% of marketers reporting increased sales from video marketing. When content goes viral, it exponentially boosts visibility for products, services, and destinations. This is a game-changer for small and medium-sized enterprises (SMEs), particularly in emerging economies, where resources for large-scale marketing are limited. Social media allows SMEs to compete with larger corporations by reaching global audiences with minimal investment, enabling them to compete with larger corporations. 

A notable example is the success of Grumpy Cat, a 2012 viral meme-turned-multimillion-dollar brand. The cat’s owner used the viral content as a foundation to create Grumpy Cat Limited, offering various merchandise, books, and licensing deals after trademarking it. This demonstrates how a simple viral video can transform a small business or individual into a globally recognized brand by offering immense opportunities for visibility, engagement, and growth. Such content helps SMEs expand their market reach and foster entrepreneurship, especially in emerging economies.

Boosting Local Business and Social Commerce

Social media has significantly impacted local economies by fueling the rise of e-commerce through social platforms. This trend was accelerated by the COVID-19 pandemic. During lockdowns, many businesses were forced to pivot online to survive. The pandemic accelerated the adoption of digital services, with e-commerce platforms booming, often promoted through social media networks. Platforms like Instagram, Facebook, and TikTok are strong cases proving that businesses no longer need high budgets or physical storefronts to succeed. In fact,  41% of the small companies and local businesses use social media to generate revenue. One example is Bijoux Komorebi, a California-based small homemade jewelry business that grew rapidly on TikTok in 2023. By posting creative, engaging content, the business gained over 213,000 followers in a year while entirely operating from home. This success story exemplifies how social media allows businesses to thrive without a physical store, reaching customers directly through TikTok’s massive user base of 1.5 billion. 

Moreover, social media platforms now offer integrated shopping features like TikTok Shop, Instagram Shopping, and Facebook Marketplace, allowing businesses to turn their profiles into digital storefronts. This has given rise to social commerce, where buying and selling take place directly on social media platforms, and has expanded the potential for local businesses. A report by eMarketer forecasts that U.S. social commerce sales will surpass USD 100 billion in 2025, representing significant growth opportunities for local businesses to tap into the global consumer base.

Transforming Food Tourism: Stories from the Food Industry

A sector that has visibly benefited from the growth of social media is food tourism. As people increasingly seek authentic and unique dining experiences along with the rise of social media, food has become a central focus of travel with culinary exploration becoming a key motivator for tourists, often determining where they go and what they do. In fact, by 2013, 51% of leisure travelers were already pursuing food-focused trips, according to American Culinary Traveler. Food has grown into an essential aspect of tourism’s growing soft power, driven by the connection to travelers through digital platforms. Now with the rise in social media, discovering local cuisines and turning even small, hidden eateries into viral sensations have become easier.

A great example is Jay Fai, a street vendor in Bangkok, who gained global recognition after being awarded a Michelin star and going viral on social media. She has dozens of celebrity fans, including Russell Crowe, John Legend, and Martha Stewart, all prominent celebrities, who posted their appreciation of the food. As a result, the once modest business now sees long queues of tourists eager to try her signature crab omelette. Later it was also featured in the 2019 Netflix show ‘Street Food’ further boosted its popularity around the world, showcasing the power of social media to boost small businesses in the food industry.

In Nepal, influencers like Mr. Foodie Nepal has had a similar impact by promoting local eateries and hidden gems. He frequently highlights hidden gems and small eateries across Kathmandu and other cities, giving these places exposure to a broader audience. His content, typically featuring the ambiance, food preparation process, and detailed reviews, helps potential customers make dining decisions. The visibility from such influencers leads to increased foot traffic, particularly for small, family-owned restaurants that may not have the budget for traditional advertising. These influencer-driven promotions often result in viral word-of-mouth recommendations, turning local restaurants into popular spots without the need for large marketing campaigns.

Uncovering Hidden Gems and Supporting Local Communities

Nowadays, many travelers refer to other people’s content on social media to plan their own trips. These platforms along with the influencers and content creators have acted as digital guidebooks for travelers that showcase destinations that were previously unknown or underappreciated. One prime example is the small Greek island of Milos, which was relatively unknown compared to more famous islands like Santorini or Mykonos. Instagram influencers and vloggers like Sabrina Chakici, Tim & Finn, and Ana & Ian from the youtube channel ‘The Other Side’ began showcasing its turquoise waters, hidden caves, and traditional Greek charm, leading to a surge in tourism. The increased tourism created greater income streams for local businesses, created more jobs and stimulated the island’s economic growth. 

In the case of Nepal, a similar example would be Panch Pokhari, Sindhupalchowk district. A series of five sacred lakes, it was relatively unknown outside of religious pilgrimage circles until social media influencers began sharing their trekking experiences there. Stunning drone footage of the crystal-clear lakes, beautiful wild flowers surrounding it and breathtaking mountain vistas went viral on Instagram, YouTube, and TikTok, attracting new waves of domestic tourists seeking spiritual and natural beauty and created new income streams for local guides, restaurants, homestays and porters. 

Outlook

Social media’s ability to connect people globally has had a great impact on tourism and local economies. By uncovering hidden gems, promoting local businesses, and driving tourism to lesser-known areas, it serves as a catalyst for economic activities. Many small businesses in Nepal have seen similar benefits via social media platforms as well. This was more notably evident when TikTok was temporarily banned in 2020, which was a go-to platform to find everything from fashion trends to local tourism. Many businesses and influencers that relied heavily on TikTok faced significant setbacks, losing an important avenue to reach large audiences. Without it, the digital marketing space in Nepal became more competitive, hindering the development of Nepal’s digital creative industry. The lift of the ban in 2024 brought a swift resurgence of activity, with local creators speedily resuming their digital efforts.

Moving forward, social media will remain a pivotal force in shaping local economies, helping businesses and destinations connect with wider audiences while influencing trends in tourism, commerce, and consumer behavior. Additionally, social media plays a critical role in enhancing soft power as nations use platforms to showcase their culture, values, and unique offerings to influence global perceptions. As competition continues to grow, mastering social media will evolve from a strategic advantage to a necessary skill for businesses to survive and thrive. The future of social media is one of continual evolution, and its role in economic growth is only set to expand further.