This study explores challenges facing the linkages between the tourism industry and local suppliers at the destinations. During 2010 surveys involving hotel and restaurant operators, local suppliers and tourists were conducted in Zanzibar. Qualitative analysis of the perspectives of the respondents reveals the multitude of constraints. From operators, the main constraints include poor quality of the locally supplied products, business informalities, high transaction costs and violation of agreements by local suppliers. Low production levels, low prices offered by hotels and restaurants coupled with late payments for the products delivered were the most serious problems cited by local suppliers. There is also a certain degree of mistrust between the local suppliers and the operators. However, the source of the tourism products consumed in the hotels or restaurants was not a point of concern, at least from the tourists’ perspective. Strategies to bridge the demandsupply gaps in order to maximize the benefits of tourism, among the tools for fighting the rampant poverty, have been recommended.