COMMENTARY: Time to Rethink Caribbean Tourism

By Lilia Burunciuc, World Bank Director for the Caribbean

For decades, Caribbean tourism has been synonymous with sun, sea, and sand. These natural assets remain a source of beauty, pride, and economic promise.

During my four years in the region, I’ve had the opportunity to experience this firsthand—both in my professional capacity, visiting nearly every country across the Caribbean, and in my personal life, traveling with family and friends to explore its rich culture, landscapes, and communities.

While the allure of the Caribbean is undeniable, the model of tourism that has developed around it is under strain. The COVID-19 pandemic laid bare the vulnerabilities of tourism-dependent economies.

It also created a moment of reflection—a chance to reconsider what kind of tourism serves the region best, not just today but in the long term.

Tourism contributes over 22 percent of GDP across the Caribbean and supports 2.75 million jobs—many of them held by women and young people.

Yet, despite its scale, the current model has struggled to deliver real economic value. Cruise tourism remains a dominant force, now accounting for more than half of all tourist arrivals in the Caribbean.

Visitor spending, however, is disproportionately low.

Cruise passengers spend between US$37 and US$140 per on-shore visit but, many don’t even leave the ship, preferring the activities on board.

By contrast, overnight visitors spend around US$1,600 per trip, and adventure tourists even more—close to US$2,300, excluding accommodation, flights and visas.

This gap is not just a matter of revenue; it reflects how different types of tourism contribute—or fail to contribute—to local jobs, services, and supply chains.

At the same time, the sector’s economic footprint remains narrow.

The proliferation of all-inclusive resorts, often foreign-owned, lead to high leakage—where profits are repatriated and supplies imported, leaving behind few opportunities for local producers or service providers.

These resorts also drive intense competition between Caribbean nations, resulting in a “race to the bottom” in the form of generous tax holidays and concessions.

Between 2010 and 2013 alone, such incentives cost Caribbean governments up to 7 percent of GDP in forgone revenue.

Beyond the economic inefficiencies, the environmental cost is mounting. Both cruise ships and large resorts generate high volumes of waste, consume vast amounts of water and energy, and place severe pressure on already fragile coastal ecosystems.

Overdevelopment has degraded mangroves, coral reefs, and beaches—the very natural assets that attract tourists in the first place.

To remain competitive, Caribbean nations must pivot. Travelers are demanding more sustainable, immersive, and authentic experiences. And destinations that offer these—alongside responsible governance—stand to gain.

There is growing recognition that the region’s tourism model must evolve—and there is a clear path forward. Strengthening governance is a critical starting point.

When investment frameworks are transparent and consistent, they can attract more responsible, high-quality tourism investors.

This includes setting environmental and passenger fees at levels that reflect the real cost of maintaining infrastructure and protecting fragile ecosystems—and ensuring those revenues are reinvested where they are needed most: in communities and conservation.

Equally important is rethinking who tourism benefits.

More inclusive growth means creating stronger links between tourism and the wider economy—especially for local farmers, artisans, and entrepreneurs.

That requires coordination, better access to finance, and investment in skills.

There are promising signs of progress.

In Saint Lucia, for example, the Tourism Enhancement Fund is already helping channel voluntary visitor contributions into local sustainability initiatives. Models like this can be replicated and scaled throughout the region.

At the same time, the region must look beyond its traditional tourism offerings. Adventure tourism—already accounting for over 30 percent of global leisure travel and contributing more than US$680 billion—is still underdeveloped in the Caribbean.

Yet it holds some of the greatest potential for high-value, low-impact growth.

Travelers are increasingly seeking meaningful, authentic experiences, and destinations like Dominica are showing what’s possible.

Its Waitukubuli National Trail is a step toward positioning the Caribbean as a serious destination for nature-based tourism, but greater investment and coordination will be key.

All of this will be difficult to achieve without stronger regional collaboration. Competing for investment in isolation often leads to a weakening of standards and missed opportunities.

By working together—on tax policy, investment incentives, environmental safeguards, and destination marketing—Caribbean countries can strengthen their bargaining power and build a more resilient, inclusive, and sustainable tourism future.

The ingredients are already here: world-class natural assets, vibrant cultures, and a growing body of local innovation. 

What’s needed now is the determination to make the bold policy choices that will ensure tourism works not just for visitors, but for the people and places that make the Caribbean truly extraordinary.

Best regards,

Penny

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