Tobago's economy is tightly linked with Trinidad and is based on liquefied natural gas (LNG); petrochemicals, and steel. The principal economic forces specific to Tobago are tourism and government spending. Conventional beach and water-sports tourism is largely focussed in the south-west around the airport and the coastal strip; however, ecotourism is growing in significance, and much of it is focussed on the large area of protected forest in the centre and north of the main island and on Little Tobago, a small island off the north east tip of the main island.

Tourism is concentrated in the southwest of the island; around Crown Point, Store Bay, Pigeon Point and Buccoo Reef. This area has large expanses of sand and is dominated by low-key resort type developments. Tobago has many idyllic beaches around its coastline, especially those at Castara, Bloody Bay, and Englishman's Bay.

Tobago is linked to the world through the Crown Point International Airport and the Scarborough harbour. Domestic flights connect Tobago with Trinidad, and international flights connect with the Caribbean, USA and Europe. There is also a daily fast ferry service between Port of Spain and Scarborough. The island of Tobago is also thought to be the island that the story Robinson Crusoe was written about. This island was also the filming location for the Walt Disney movie The Swiss Family Robinson.