ILO warns informality is limiting Eastern Caribbean tourism
Key Points(5)
- Tourism may account for nearly 40% of the economy in the Eastern Caribbean, but widespread informal work and weak labour protections are limiting the sector’s ability to deliver sustainable growth, according to a new International Labour Organization (ILO) study.
- The study, which covers Antigua and Barbuda, Barbados, Dominica, Grenada and Saint Lucia, found that tourism’s economic importance exists alongside persistent challenges including low productivity, limited access to financing, skills gaps and inadequate social protection.
- Tourism contributes an average of 39% of gross domestic product and more than 11% of total employment across the five countries, the ILO said.
- But many tourism businesses, particularly micro, small and medium-sized enterprises, operate informally or face significant barriers to becoming formal.
- The ILO identified limited access to finance, fragmented regulations, skills mismatches and weak enforcement of labour rules among the factors contributing to informality.
Tourism may account for nearly 40% of the economy in the Eastern Caribbean, but widespread informal work and weak labour protections are limiting the sector’s ability to deliver sustainable growth, according to a new International Labour Organization (ILO) study.
The study, which covers Antigua and Barbuda, Barbados, Dominica, Grenada and Saint Lucia, found that tourism’s economic importance exists alongside persistent challenges including low productivity, limited access to financing, skills gaps and inadequate social protection.
Tourism contributes an average of 39% of gross domestic product and more than 11% of total employment across the five countries, the ILO said.
But many tourism businesses, particularly micro, small and medium-sized enterprises, operate informally or face significant barriers to becoming formal.
The ILO identified limited access to finance, fragmented regulations, skills mismatches and weak enforcement of labour rules among the factors contributing to informality.
Seasonal demand and exposure to climate-related shocks also make it harder for businesses to invest, expand and maintain formal operations.
“The challenge is not simply to reduce informality, but to transform tourism into a genuine platform for decent work, productive development and social inclusion,” said Ana Virginia Moreira Gomes, ILO Regional Director for Latin America and the Caribbean.
The findings come as Caribbean countries continue to rely heavily on tourism for jobs, foreign exchange and economic activity, while businesses face pressure from rising costs, labour shortages and climate-related disruptions.
The ILO is calling for formalization to be addressed alongside productivity and working conditions rather than as a separate issue.
Its recommendations include improving support for small businesses, expanding access to skills training and social protection, strengthening labour rights and enforcement, and increasing access to financing.
The agency also called for greater involvement of governments, employers and workers in shaping policies affecting the tourism industry.
The report said a one-size-fits-all approach would not work across the region. Businesses operating at subsistence level face different challenges from companies seeking to expand, while conditions also differ among the five countries studied.
The ILO therefore recommends gradual and targeted measures that make it easier for businesses to formalize while improving protections for workers.
“Advancing formalization in Caribbean tourism is not only a labour market priority; it is a development imperative,” said Joni Musabayana, Director of the ILO Decent Work Team and Office for the Caribbean.
“By turning evidence into action and strengthening tripartite cooperation, we can build a tourism sector that delivers decent work, greater resilience and sustainable development,” he said.
The study was produced under the ILO’s Strategy for the Promotion of Formalization in Latin America and the Caribbean (FORLAC 2.0), with financial support from the European Union and the Spanish Agency for International Development Cooperation.
