Port of Spain (ILO News) – Tourism contributes an average of 39 per cent of GDP and more than 11 per cent of total employment in the Eastern Caribbean, but its economic importance coexists with persistent informality and decent work deficits. A new International Labour Organization (ILO) study argues that strengthening productivity, working conditions and formalization together can help turn the sector’s economic weight into more sustainable and inclusive development.
The study, Informality in the tourism sector in the Eastern Caribbean, examines Antigua and Barbuda, Barbados, Dominica, Grenada and Saint Lucia. It finds that informality is sustained by mutually reinforcing factors, including low productivity among many micro, small and medium-sized enterprises (MSMEs), limited access to finance, fragmented regulatory environments, persistent skills mismatches, gaps in social protection and limited capacity to enforce labour regulations. Strong seasonality and exposure to climate shocks further constrain the ability of enterprises to invest, grow and sustain 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
Ana Virginia Moreira Gomes, ILO Regional Director for Latin America and the Caribbean
“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.
Rather than treating formalization as a stand-alone objective, the study proposes an integrated approach based on the ILO’s normative framework, as well as on the Strategy for the Promotion of Formalization in Latin America and the Caribbean (FORLAC 2.0), and the ILO guidelines on decent work and socially responsible tourism. Its nine pathways combine measures to strengthen productive development and MSMEs, upgrade skills and employment opportunities, extend social protection coverage and improve labour rights and compliance. They are complemented by action to strengthen social dialogue, promote gender-responsive policies and improve data collection and regional collaboration.
The study stresses that these measures need to respond to different realities within the sector. Subsistence-level operators and growth-oriented enterprises face different barriers to formalization, while conditions also vary among the five countries. This calls for gradual and differentiated approaches that make formalization viable for workers and enterprises while strengthening productivity and improving working conditions.
Advancing formalization in Caribbean tourism is not only a labour market priority; it is a development imperative
Joni Musabayana, Director of the ILO Decent Work Team and Office for the Caribbean
“Advancing formalization in Caribbean tourism is not only a labour market priority; it is a development imperative. By turning evidence into action and strengthening tripartite cooperation, we can build a tourism sector that delivers decent work, greater resilience and sustainable development,” said Joni Musabayana, Director of the ILO Decent Work Team and Office for the Caribbean.
The ILO will continue working with governments, employers’ and workers’ organizations to translate these priorities into practical actions for more sustainable enterprises, better-protected workers, more resilient communities and a tourism sector whose growth creates opportunity and dignity.
The study was developed within the framework of FORLAC 2.0, with financial support from the European Union and the Spanish Agency for International Development Cooperation (AECID). It is part of the ILO’s strategy to strengthen an integrated and coherent response to support the transition to the formal economy in Latin America and the Caribbean over the period 2024–2030, through innovative solutions tailored to national contexts, aiming to increase productivity, sustainable enterprises, formalization and decent work, and foster partnerships to advance integrated formalization policies across the region.
