Tourism In Latin America And The Caribbean: Five Concrete Actions To Turn Potential Into Results

• Tourism in Latin America and the Caribbean accounts for 6 percent of the global industry total but generates 20 percent less revenue per visitor than the global average, highlighting clear room for improvement.
• The potential could translate into tangible benefits for local economies by prioritising action in five areas: regional coordination, sustainability, connectivity, human capital, and investment environment.
• Private-sector representatives at the ABD identified the main barriers the sector is facing and developed recommendations that focus on coordinated action.

By Mónica Maday, Vanesa Garcia Sanchez, Roberto Duran Fernandez, and Juliana Bettini Vicente

Latin America and the Caribbean (LAC) is one of the most diverse tourism regions in the world. It contains 17 percent of UNESCO World Heritage natural sites, as defined by the Convention Concerning the Protection of the World Cultural and Natural Heritage, includes 12 of the world's 14 biomes, and is home to widely recognised cultural and historical heritage. However, LAC accounts for only about 6.2 percent of global tourism exports-a share similar to its role in global goods trade. Although tourism in the region has grown faster than the global average (5.2% versus 3.3%), attracting growing numbers of international visitors, its overall share of global tourism flows remains relatively low.

The revenue gap is also significant: average spending per international tourist is $938 in LAC, approximately 20% less than the global average of $1,184. These figures point to an opportunity to convert visitor flows into economic gains more effectively. However, the gap between regional and global averages should be interpreted with caution, as it reflects structural factors, such as connectivity, infrastructure, and human capital-as well as differences in demand patterns, the sophistication of tourism offerings, and pricing. At the same time, although LAC has clearly demonstrated it can draw visitors, its share of global tourism flows remains lower than that of other leading regions, pointing to limitations in its reach. Progress will depend on looking beyond arrival statistics and analysing tourism as an integrated economic system.

Tourism as a system

One reason tourism in LAC does not always reach its full potential is that policies and development strategies often take a fragmented approach. They've tended to tackle the sector from different angles, each focusing on important factors that would be more effective if they were considered together.

Tourism research often focuses on specific destinations: their natural and cultural assets, environmental quality, local management, and the investments needed to develop assets. Tourism can also be seen as an economic value chain made up of multiple interconnected services: transport, accommodation, dining, tour operators, digital platforms, and other services that enable travelers to visit. Both perspectives are valid and complement each other.

Tourism should be understood as a complex economic system in which multiple stakeholders interact. As with any economic system, outcomes depend on the interaction of three key factors.

The first is supply, which implies more than a given destination's attractions. It also includes the infrastructure, services, and stakeholders that enable and shape visitor experience, as well as the connectivity that enables access to the destination. In other words, it reflects a broader value chain that may often be global but ultimately comes together at the destination via transportation, digital platforms, tour operators, and more.

The second factor is demand, which reflects travelers' preferences, purchasing power, and choices. Supply alone is not enough to ensure that people will come. Attracting visitors requires effective positioning and promotion, as they may not be aware of all the available options or have the information they need to make decisions.

Ultimately, supply and demand converge in the tourism market, which operates at both the global and domestic levels. It's a highly competitive market in which destinations compete to attract visitors based on the value of their experiences. It's also where spending levels, income distribution, and the share of benefits that remain in local economies are determined.

Viewing tourism as an integrated system has direct implications for public policy. Focusing interventions on a single aspect tends to bring only limited results. Expanding supply without understanding the dynamics of demand reduces the impact of tourism development efforts, as does promoting destinations where the local tourism industry is still developing.

The ABD Tourism Group's agenda for LAC

This approach to tourism is reflected in the work of the Americas Business Dialogue

In 2025, the IDB, in its role as Technical Secretariat of the ABD, facilitated the creation of the Tourism Working Group, which brings together more than 20 companies from across the sector, including hotel chains, airlines, and cruise operators. The World Travel & Tourism Council (WTTC) and Grupo Punta Cana help run the group's meetings.

Drawing on the experiences of participating companies, the Tourism Working Group identified the main challenges facing the tourism sector in LAC and developed policy recommendations to address these.

Five recommendations to strengthen LAC's tourism system

Each recommendation includes concrete actions designed to strengthen different aspects of LAC's tourism system: