Abstract
The informal economy is a complex phenomenon occurring in various forms and degrees worldwide. In Ecuador, the informal sector represents 46.5% of the economy. This research aimed to analyze the informal trade in the tourism sector of Playas Cantón, Ecuador and its relationship with the regional economic development. A quantitative approach through a structured survey with actors involved in tourism (tourists, residents, informal traders, tourism entrepreneurs, and local authorities) was used during March-April 2023, reaching a sample of 150 participants. Results showed that the informal sector is an essential part of the tourism economy in Playas. Multiple causes/factors drive and sustain it: lack of formal job opportunities, flexibility in working hours, lack of regulation and sanitary control, and insecurity in the area. Implementing policies and measures to address informality is necessary, including formalizing and training informal workers to strengthen regulation and control of informal activities and ensure sustainable development.
TopIntroduction
The Ecuadorian Tourist Coastal Zone 1 of the Playas Cantón is known for its natural attractiveness. Tourism is a vital economic sector for the region, generating jobs and business opportunities for local residents. It involves representatives from both the public and private sectors and community residents, stakeholders, and visitors (Sarabia, 2021). Influenced by a high level of organization that communities have through a social business management model, with the aim of generating positive impacts and distributing them among all. However, informality in the tourism sector in coastal areas is a common problem, with operation of unregistered tourism businesses and services resulting in unfair competition for formal businesses such as: Unregistered vendors of goods and services such as food, beverages, handicrafts, tent rentals, chair rentals, and cocktail servers and a decrease in the quality of tourist services, resulting in consequences for the tourists' experience during the trip such as: inadequate customer service, possible scams when purchasing goods and services or lack of hygiene standards, especially when acquiring food services.
Therefore, there is a need to describe the situation of informal trade in the tourist sector of the Tourist Coastal Zone 1 of the Playas Cantón as well as its relationship with the tourist and economic development of the region.The general purpose of this chapter is to analyze and to describe the situation of informal trade in the sector and its impact on tourist and economic development. In order to reach the purpose, we established specific objectives, such as describing the causes and factors driving informality, characterizing the economic and social effects of informal activity, and finally providing recommendations to address the problem and improve tourist and economic development in the region.
The expected results of this research are the identification of the main causes and factors that contribute to informality in the tourism sector of Tourist Coastal Zone 1 of the Playas Cantón, the description of the economic and social effects of informality in the tourism sector, and the development of specific recommendations to address this problem and improve tourism and economic development in the region. In addition, this research would contribute to the advancement of scientific literature in the field of sustainable transformation and informal trade in tourism, providing new empirical and theoretical knowledge on the factors that influence the development of tourist destinations and the strategies for management and regulation of informal trade in tourism.
Key Terms in this Chapter
Economic Development: Refers to sustained, broad-based improvement in the standard of living, often mesasured by factors like GDP growth, employment rates, and infrastructure development, aimed and at enhancing overall prosperity and well-being within a society. It involves implementing policies and initiatives to foster growth in key sectors, promote innovation, and reduce poverty and inequality.
Underground Economy: Refers to a lack of strict adherence to formal rules, norms, or conventions, often characterized by a relaxed or casual atmosphere.
Regulation: Refers to rules, laws, and guidelines established by governmental or authoritative bodies to govern behaviour, activities, or practices within a specific domain. These regulations aim to promote safety, fairness, efficiency, and compliance within industries, markets, or society as a whole.
Informal Workers: Are individuals engaged in employment without legal or contractual protections, often in unregulated sectors such as street vending or domestic work. They typically lack benefits like healthcare and job security.
Tourism Development: Involves strategic planning and implementation of initiatives to enhance a destination’s appeal and infrastructure for travelers. It encompasses efforts to attract visitors, improve amenities, and foster sustainable growth in the tourism industry, ultimately contributing to economic prosperity and cultural exchange. Balancing conservation, community engagement, and economic benefits are central to successful tourism development strategies.
Popular and Solidarity Economy: Formation of work and production cooperatives and workers' associations, in which self-management is sought, such experiences are being recognized under the name of Solidarity Economy.
Tourism Entrepreneurs: Individuals who establish and operate businesses within the tourism industry, offering services such as accommodations, tours, transportation, and recreational activites to travelers. They innovate, invest, and manage ventures to meet the needs and desires of tourist while contributing to the growth and sustainability of tourism destinations.
Local Authorities: Are governmental bodies responsible for managing affairs within a specific geographical area, such as cities or counties. They often oversee services l ike education, transportantion, and public safety.