“Informality” as a global economic category and normative standard to measure economic activity is rooted in western cultures, implemented through legal, fiscal frameworks and development doctrines. This work argues that the informal/formal economic binary masks economic diversity in tourism destinations in the Global South. A prism of non-compliance to tourism legislation as a barometer for formal/informal economic activity evidence disconnection between modern regulatory frameworks and the ways in which local networks of small and medium entrepreneurs (SMEs) operate. Census data from four popular beaches of Ecuador are analysed with descriptive clustering statistics. The research uncovers a diverse range of economic forms of tourism enterprise: unincorporated associations, unregistered tourism establishments, and SMEs operating to varying extents outside officialdom, which reframes the paradigmatic distinction between formal and informal tourism economies. Further, this innovative research reveals tensions associated with such characterization as “alternative economies” as globalized research and political objects.