Fewer tourisists expected on Caribbean beaches this season.

Investment projects in some countries have been halted and hundreds of workers laid off, as travellers scale down their holiday plans.

In the Dominican Republic, work on the multi million dollar Cap Cana luxury resort has been suspended, because of a lack of funding.

Job losses

Cap Cana fired 500 workers last month, after a $250 million loan fell through, when the US investment bank Lehman Brothers declared bankruptcy.

Talks to re-negotiate a $100 million short term loan collapsed last week, and Cap Cana representatives say there could be more layoffs in the coming weeks.

At least three hotels in the Bahamas have sent home over 1,000 workers as visitor arrivals drop.

In Puerto Rico, 50 employees at the Caribe Hilton were dismissed because of rising costs and sluggish occupancy rates.

President of the Caribbean Hotel Association Peter Odle says he is confident the region can contain the fall out.

"I think what we need to do is try and ensure that even if there's a downturn, we keep it to a minimum," Mr Odle said.

St Lucia's tourism minister Alan Chastanet had previously warned of significant layoffs in the local sector, unless the global situation improves.

'Relatively quiet'

But the CEO of the Caribbean Hotel and Tourism Association Alec Sanguinetti is predicting that the normally busy winter season will be relatively quiet.

And even beyond the holiday season, the outlook is bleak.

Stakeholders say it will be difficult to obtain financing for new projects, amid the credit squeeze.

But some investors remain optimistic.

Hilton hotels has announced plans to build 17 hotels in the Caribbean, adding to the existing 13.