Tourism is a remarkable source of income for Latin America and the Caribbean (LAC), but environmental vulnerabilities show growing challenges for the sector and the regional economy in terms of sustainable progress.

Assessments by the CAF bank show that the area’s ecosystems constitute a valuable heritage with more than 60 percent of the planet’s biodiversity, yet they are among the most threatened.

«Deforestation, uncontrolled urban expansion, pollution and climate change are causing an accelerated degradation of natural resources,» the financial institution summarised on its website in March 2025.

However, the area can open new paths «not only for its biodiversity and natural landscapes, but also for its culture, history and the warmth of its people, which makes it an attractive place for both tourists and investors», said the CAF when presenting the Marca Región initiative at the Fitur-2025 international fair in Spain.

Within South America, the contribution of the so-called «industry without chimneys» to gross domestic product (GDP) is around 2.5 percent, according to the Economic Commission for Latin America and the Caribbean (ECLAC).

In the Mexico-Central America region, the proportion is equivalent to almost five per cent of GDP, while in the Caribbean it amounts to 20 per cent, although with significant differences between states, ECLAC rounded up in its 2024 report «Latin America and the Caribbean facing development traps: indispensable transformations and how to manage them».

The industry, the document adds, accounts for 10 per cent of employment in Latin America and 35 per cent in the Caribbean, although 52 per cent of those employed work informally and for low wages.

Equidistant visions prevail regarding the benefits, although the predictions point to calamities: rising sea levels and acidity of the oceans, according to ECLAC, will threaten coastal tourism infrastructure and natural attractions, including changes in biodiversity, to the detriment of ecotourism.

This phenomenon is already being observed in the coral reefs of the Caribbean, whose living cover has decreased by 60 percent in the last 20 years due to climatic variations and other factors.

Rising seas, coastal erosion, coastal regression and inundation processes and salt penetration, he warned, will have profound and multiple impacts on coastal tourism by degrading infrastructure and attractive sites such as beaches.

Likewise, the warming of marine waters has contributed to the presence of sargassum in quantities much higher than normal in various Caribbean areas, which is detrimental to tourism, fishing and biodiversity (it causes the death of corals) and requires clean-up work at significant cost.

While much tourism depends on natural and cultural heritage, there are also staffing and budgetary constraints in developing and managing sites, as well as a poorly structured linkage between specific tourism needs and environmental and cultural agendas, the UN agency said.

«Given the interest in the immense natural and cultural heritage of the region, a quality and innovative tourism offer could contribute to improving jobs and conditions for local communities, add value to the tourism experience and boost innovation in other industries,» ECLAC said.

The issue is of vital importance for Small Island Developing States (SIDS), including the Caribbean, taking into account the pronouncements of the Fourth International Conference for SIDS, held in May 2024 in Saint John, Antigua and Barbuda.

During the event, UN Tourism reported that in 2023 about 38 per cent of export earnings of SIDS (excluding Singapore) came from international tourism, a proportion that was as high as 85 per cent in some destinations. These revenues, he recalled, were 43 per cent before the Covid-19 pandemic.

Direct tourism GDP in SIDS ranges from 0.7 to 15.2 percent, with a stark contrast in export rates due to high economic losses, the organisation, known years ago as the World Tourism Organisation, said.

Climate, weather and water-related hazards have caused losses to SIDS of more than 153 billion dollars from 1970 to date, Trinidadian politician Dennis Francis, then president of the United Nations General Assembly, told the Fourth Conference.

From ECLAC’s perspective, LAC as a whole ‘faces a number of development traps that constitute enormous obstacles to building a more productive, inclusive and sustainable future’.

On a regional scale, he detailed, notable gaps associated with the leisure industry persist, including the precariousness and feminisation of jobs, the emission of greenhouse gases, conflicts over the use of local water resources, the lack of innovation in the tourism experience and conflicts over land tenure in rural areas or access to housing in cities.

Meanwhile, island territories concentrate the greatest material and financial losses due to climate disruption and disasters, in a global economic scenario characterised by inflation, the rise of indebtedness, the decline of official development funding and the conjugation of multiple crises.