Major barriers to access funding for community-based tourism enterprises: evidence from Costa Rica

Purpose Access to finance is crucial for the success of community-based tourism enterprises (CBTEs) as a sustainable tourism solution. The purpose of this paper is to examine the barriers CBTEs face in accessing funding instruments, a subject that remains understudied in academic literature. Design/methodology/approach This study used a mixed methods approach to analyse six CBTEs in Costa Rica and identify the barriers they have historically faced to access funding. Findings Findings reveal that accessing finance, particularly refundable instruments, is challenging for CBTEs. While non-refundable instruments like grants and donations presented no major obstacles, six significant barriers hindered access to refundable finance: challenging governance structures, limited financial viability, weak business knowledge and management, bureaucracy, lack of collateral or guarantor and a negative perception towards refundable finance. Research limitations/implications Three potential solutions are proposed to overcome these barriers: enhanced training in governance and business, public policies to simplify enterprise management and adjusted financial assessment criteria for CBTEs, prioritising turnover over profitability. Practical implications The understanding of these barriers and possible solutions offers practical insights for CBTE managers, practitioners, donors, support organisations, policymakers and other stakeholders on how to provide more effective financial and business support to enhance CBT implementation, especially in rural contexts in the developing world. Originality/value Despite increasing scholarly attention on CBT successes and challenges, a knowledge gap persists regarding access to finance, a recognised critical success factor for CBTEs.