News Americas, LONDON, England, Tues. Jan. 19, 2016: Some years ago, when the banana wars were at their height, the issue for Europe was diversification. Then, the world was very different, the scope of what was possible was limited, and the services sector was not much thought about in Europe as the future economic driver for the Caribbean.
At the time, I had a conversation with a senior figure in the European Commission who was responsible for determining European policy towards the region. What he told me in private was that he and many of his officials could not see any viable sector for the Caribbean to move into and away from bananas.
For me, this did not make sense. Then and now, the admittedly not complete answer was straightforward – tourism – and I said so. My interlocutor was polite, but in a northern European way was quietly horrified: “Too fickle,” he said, “uncertain, impossible.”
And that was the end of that, and in a minor way an indication of the reason at that time and for many years afterwards, why Europe felt tourism was not worth supporting.
In part, as I subsequently discovered, his views had been formed by his regional counterparts. The European Commission had heard at the time from the region that it was less than enthusiastic about tourism, preferring instead to fight for the status quo and the moral high ground of agriculture; despite the fact that the region was a high cost and largely inefficient producer of commodities and preference was eroding rapidly.
For me it was a lesson. It made me realize that awareness of tourism and the absence at the time of macro-economic statistics indicating its extraordinary ability as an industry to deliver rapid economic transformation, required those involved to become engaged in changing governments’ thinking, even ideology.
Although I did not realize it then, the breakthrough had already begun when Cuba, realizing that one of few ways it could survive the multiple implications of the collapse of the former Soviet Union, was to encourage Spanish hotel investors to work with it to develop tourism, demonstrating in part that the nature of the near philosophical debate in the rest of the region about the industry needed to change.
Today, more than thirty years on, while some anti-tourism sentiment still prevails, it is evident that the industry has become the one on which almost every nation in the region depends to a significant extent for employment, GDP growth, foreign exchange, and in sometimes surprising ways to provide a window on rapidly changing global consumer trends.
If anyone was still in any doubt about the regional economic importance of the industry one should consider its continuing success and positive outlook.
According to the World Travel and Tourism Council the industry accounted for an average of 14.6 per cent of the region’s GDP in 2014 and this is expected to grow by 3.3 per cent per annum up to 2025. Not only does this make the contribution of tourism to the Caribbean economy the greatest in
relation to the size of any region globally, but such growth figures are significantly higher when it comes to Caribbean economies that have fostered investment in tourism.
In the last months, it has become evident from preliminary data from Caribbean destinations like Barbados and Jamaica, and Cuba that publish statistics monthly that almost all destinations are now showing a significant growth in tourism arrivals in 2015 and are experiencing a very strong winter season.
In addition and anecdotally, hoteliers observe that forward bookings are good, and most tourist boards expect this year significant growth in the number of long stay and cruise visitors. They also report much improved yield, an increase in the numbers they employ, and a more general return to profitability as their input costs, especially in relation to energy, fall.
Although the year-end figures are unlikely to become available for a couple of months yet, it is probable that they will show that 2015 was the period in which the tourism industry in the Caribbean exceeded the highs experienced before the 2007/2008 global financial crisis and has become the sector that is the most important contributor to economic recovery and long term growth in many nations.
There are also many positive signs of investor confidence in the long-term future of the industry in the region. New properties have opened and in the last months alone agreements have been reached in the Dominican Republic, Antigua, Dominica, Barbados, Cayman, Cuba and elsewhere for the construction of major new up-scale resort properties, suggesting that in the coming years branded hotel chains and an increase in the overall number of quality new rooms will enable the region to better compete as a top-end aspirational destination.
Recent forecasts by industry analysts indicate that the overall growth in arrivals into the region in 2016 will average between 2.7 -2.9 per cent with significantly higher figures in some destinations.
What all of this suggests is that the moment has come for the Caribbean Tourism Organization (CTO) and the Caribbean Hotel and Tourism Association (CHTA) to take the time to consider with governments what is required to ensure the industry’s sustainability in a global context, and to develop a better understanding its long term growth and stability requires as much political effort and attention at both a domestic and international level as was afforded to commodity agriculture in the past.
Unfortunately there is not a formal CARICOM Council of Tourism Ministers making recommendations to Heads of Government.
This argues for a new way forward in which first the regional institution comes to see the political and functional value in working with an industry that has a bright and dominant future, and secondly for its incoming ad-interim Chair, the Prime Minister of Belize, Dean Barrow, to be encouraged to convene a working meeting aimed at identifying with CTO and CHTA the impediments to future tourism growth, at the very least determining possible short, medium and long-term responses, and then identifying sustainable solutions that might be supported by external development agencies, through CTO and CHTA, starting with the easiest issues to resolve.
This would not mean trying to address immediately intractable issues like regional air transport or high levels of tourism taxation. Rather, by way of example it could at one of the spectrum involve making travel into and around the region more attractive by the region-wide adoption of Aruba’s approach that enables immigration forms to be filled in on-line before departure; while at the other, beginning a strategic dialogue that might result in research enabling government to see how to adjust rapidly its support for tourism for instance through tax and other incentives in the face of a global economic downturn.