The Dominican Republic’s booming tourism sector has emerged as a key catalyst for grassroots entrepreneurship, drawing thousands of micro, small, and medium-sized enterprises (MSMEs) eager to tap into the industry’s growing momentum and untapped economic potential. But a new national survey has uncovered a major structural barrier holding this vibrant ecosystem back: nearly half of all tourism-linked MSMEs operate outside formal regulatory frameworks, leaving them less competitive and disproportionately exposed to economic shocks.
The 2025 Sectoral Survey of Tourism (Ensetur 2025), conducted by the Dominican Republic’s National Institute of Migration (INM RD), analyzed MSME operations across three of the country’s highest-profile tourist hubs: Punta Cana-Macao, Barahona-Pedernales, and Puerto Plata. Of the roughly 642 MSMEs included in the study, 42.2% are classified as informal, meaning they lack official registration and compliance with local business regulations.
The data confirms a clear trend across the sector: informality is heavily concentrated among the smallest business operations. The survey finds that 71.6% of all informal tourism MSMEs are micro-enterprises employing five or fewer workers, a share that is 22.5 percentage points higher than the rate of micro-enterprises among formal, regulated businesses in the sector. This pattern aligns with a broader industry dynamic: larger tourism operations are far more likely to comply with national regulations, while smaller, newer ventures disproportionately remain in the informal economy.
Most informal MSMEs in the sector operate in the food and beverage segment, accounting for 76.4% of all informal businesses. That is 17.6 percentage points higher than the share of formal, registered tourism MSMEs that work in food and beverage. Geographically, half of all surveyed informal MSMEs (52%) are located in the top tourist hub of Punta Cana-Macao, 41% are based in Puerto Plata, and just 7% operate across Barahona and Pedernales, according to reporting from local outlet Diario Libre.
The INM RD study emphasizes that informal activity in tourism is not a new issue, but a deeply entrenched characteristic of the sector that is closely tied to migrant labor integration. Most informal tourism roles offer low social protection, high worker turnover, and little regulatory oversight, which amplifies the socioeconomic vulnerability of migrant workers who make up a large share of this labor force. At the same time, the research acknowledges that informal micro-enterprises fill a critical economic role for marginalized communities: they are a key source of household income for vulnerable groups and a primary pathway for migrant workers to enter the Dominican labor market, thanks to their small operating scale, flexible organizational structures, and reliance on labor-intensive work.
Despite these benefits, the concentration of unregulated micro-enterprises in major tourist centers creates significant policy challenges for national authorities. The informal sector’s high demand for flexible, seasonal, low-skilled labor is overwhelmingly filled by migrant workers, which complicates efforts to formalize employment, enforce consistent labor standards, and manage migration flows effectively.
A breakdown of employment data underscores the gap between formal and informal operations. Among properly registered MSMEs, companies with 20 or more employees account for 61.5% of all jobs generated by the sector. By contrast, more than 85% of all informal tourism employment is concentrated in businesses with fewer than 10 workers. When sorted by occupation, informality rates exceed formal employment rates across multiple key tourism roles: 19.7% of all kitchen staff work in informal positions, followed by 15.6% of cleaning staff, 13% of general service workers, and 12.2% of management roles, per the survey.
INM RD officials noted that the study’s scope was limited to MSMEs, as the research team was unable to access operational data from the country’s large, multinational hotel chains.
