Purpose – The purpose of this paper is to examine the climate change implications for both rainfall and saline intrusion in ground water, which could directly threaten both the tourism industry and other local livelihoods in the Caribbean. Water shortages will be particularly critical in the locations that are already water‐stressed; at or near the limits of their available supplies. Design/methodology/approach – The paper focuses on Barbados as the island exhibits four critical factors that make it particularly sensitive and potentially vulnerable to water shortages. Barbados is relatively small and flat, and has limited water flow. Second, it is the most densely populated country in the Caribbean. Third, the economy is primarily driven by tourism, and has prospered as a result; Fourth, Barbados is characterized as “absolute water scarce” on the Falkenmark scale because of a per capita availability of freshwater per year of less than 500 cubic meters. Findings – The paper observes that Barbados has a water availability of just 306 cubic metres per capita per year, which makes Barbados the 15th most water‐scarce nation in the world. Thus, Barbados is critically dependent on a water‐intensive industry, has limited options to expand the supply of the key resource, and now finds that the availability of this key resource might decline in future as a result of climate change. Originality/value – The paper provides data, case studies and analysis to demonstrate the significant threat to tourism from water shortages relating to climate change.