The Caribbean Wants to Turn the Airbnb and Vrbo Boom into Sustainable Tourism Growth

The Caribbean vacation experience has changed noticeably over the last several years.

More travelers are booking apartments near the beach instead of traditional hotel rooms. Families are choosing villas with kitchens and multiple bedrooms. Remote workers are staying longer in residential neighborhoods instead of resort districts. Entire trips are increasingly planned around short-term rental platforms across islands from Barbados to Puerto Rico to Turks and Caicos.

Now, the Caribbean tourism industry is formally acknowledging something that has already become prevalent across the region: short-term rentals are no longer a side category of Caribbean travel.

They’re a major part of the business.

The Caribbean Hotel and Tourism Association has released a new Comprehensive Short-Term Rental Framework designed to help Caribbean governments regulate and integrate the rapidly growing sector into broader tourism strategies.

The initiative reflects a major shift in how the region’s hotel sector is approaching the rise of platforms like Airbnb and Vrbo. Instead of opposing the growth of short-term rentals outright, the organization is now pushing for what it describes as balanced regulation aimed at capturing economic benefits while improving oversight and tax collection.

And the numbers behind the trend are becoming difficult for destinations to ignore.

According to the CHTA, one major Caribbean destination saw short-term rental visitor nights grow by 118 percent between 2019 and 2025, with STRs accounting for 39 percent of all visitor accommodation by the first quarter of 2026.

That’s no longer a niche segment of Caribbean tourism.

Why Short-Term Rentals Keep Growing in the Caribbean

The Caribbean has become one of the strongest global markets for short-term rentals because the product aligns closely with how many travelers now prefer to vacation.

Families traveling together often want kitchens, larger living areas and multiple bedrooms. Longer-stay travelers and remote workers increasingly look for residential-style accommodations with neighborhood access instead of resort compounds. Repeat visitors frequently prioritize local restaurants, walkable communities and more independent travel experiences.

That demand has accelerated throughout the region since the pandemic.

In destinations with limited hotel inventory, short-term rentals have also expanded overall visitor capacity significantly, particularly during peak travel periods when resorts sell out quickly.

The growth has reshaped tourism patterns in places like Puerto Rico, Barbados, The Bahamas, Turks and Caicos and the Dominican Republic, where vacation rentals now represent a major percentage of available accommodation inventory.

For travelers, the shift has created more options. For governments and tourism officials, it has created an entirely new set of regulatory and economic questions.

The Revenue Problem Is Getting Bigger

One of the central issues outlined in the new CHTA framework is taxation.

Without registration systems and stronger oversight, many governments struggle to accurately track short-term rental activity and collect tourism-related taxes tied to the sector.

The association estimates that the accommodation tax gap tied to short-term rentals in the Dominican Republic alone reaches roughly $170 million annually.

That missing data creates broader tourism complications beyond taxes.

Airlines, for example, often use traditional hotel inventory data when evaluating market demand and scheduling flights. When thousands of short-term rental units operate outside official accommodation reporting systems, destinations can appear smaller than they actually are from an airline planning perspective.

That can contribute to seat shortages, higher fares and capacity constraints during peak travel periods.

For destinations heavily dependent on tourism, those gaps can directly affect long-term airlift growth.

The Caribbean Is Starting to Build Regional Models

The new framework highlights several Caribbean destinations already developing functioning regulatory systems around short-term rentals.

In Turks and Caicos, government registration requirements tied directly to booking platforms have reportedly helped create near-universal compliance without requiring aggressive enforcement systems.

Saint Lucia has linked short-term rental registration and compliance certification to tax incentives and booking platform visibility. According to the CHTA, roughly 600 properties have already completed certification there.

Meanwhile, Bonaire has implemented a flat per-visitor entry fee collected upon arrival, allowing the destination to capture tourism revenue while minimizing administrative complexity.

The broader point behind the framework is that regulation does not necessarily need to be punitive or restrictive to work effectively.

According to the CHTA’s research, destinations can achieve compliance rates between 85 percent and 90 percent within 18 to 24 months when systems remain transparent and participation carries clear economic benefits.

Hotels and Rentals Are Serving Different Travelers

One of the more notable elements of the framework is the industry’s acknowledgment that hotels and short-term rentals increasingly serve different traveler priorities.

Hotels still dominate traditional leisure tourism across much of the Caribbean, particularly in all-inclusive markets like Jamaica, the Dominican Republic and parts of Mexico.

But vacation rentals continue attracting travelers looking for something else: residential neighborhoods, longer stays, remote-work flexibility and more independent itineraries.

The framework specifically points to families, digital nomads and travelers seeking local-style experiences as key drivers behind STR demand growth.

That reflects a broader evolution happening across Caribbean tourism overall.

The region’s visitor base is diversifying beyond traditional resort travelers, particularly as airlift expands and remote work allows visitors to stay longer in destinations across the Caribbean basin.

Why This Debate Matters for the Caribbean’s Future

Short-term rentals are now deeply embedded into the Caribbean tourism economy.

In some destinations, they already represent a significant share of total accommodation inventory. In others, governments are still trying to determine how aggressively to regulate the sector without discouraging entrepreneurship and tourism growth.

The CHTA’s new position suggests the industry increasingly sees short-term rentals less as competition and more as infrastructure that needs better coordination, oversight and integration into national tourism planning.

That includes safety standards, tax collection, visitor data and broader destination management.

The challenge for Caribbean governments now is balancing tourism growth with housing concerns, neighborhood impacts and infrastructure demands that often accompany rapid short-term rental expansion.

But the broader trajectory appears clear.

Across much of the Caribbean, vacation rentals are no longer operating on the edges of the tourism economy.