More visitors spending less in Caribbean

Caribbean tourism has been showing signs of recovery in 2011, following two of the toughest years on record. But while international arrivals have been improving and returning to 2008 levels, visitors have been spending less in a market leading to worries about the sector’s diminishing profits in a still unpredictable global environment.
 
Tourism in the Caribbean is the region's biggest employer after the public sector and the largest single contributor to Gross Domestic Product (GDP) bringing in US$40bn to the region annually. According to the Caribbean Tourism Organisation (CTO), over 23 million tourists visited the region in 2010, up from the 22.1 million in the previous year, but spending was disappointingly close to 2004 levels. Growth in Caribbean tourists has come mainly from the United States and Canada, with experts blaming a drop in European visitors on prolonged economic recession in the United Kingdom and the dampening effect on travel by the APD (Air Passenger Duty) imposed by the British Government (see box).

The Spanish-speaking Caribbean, mainly the Dominican Republic and Cuba, again led the way on the recovery curve while there were also encouraging numbers in such destinations as Jamaica, the Bahamas, Barbados. Although encouraging numbers of global travellers are expected in the region again this year, tourists are continuously looking for bargains and are more inclined to book late. Against this background, the CTO said it expected that travellers will continue to hold onto their purse strings tightly. “By the end of 2010 the number of arrivals over the year had increased by six per cent, but revenue lagged behind. Our industry has had to do all kinds of things to convince people to come to the Caribbean and figures for the first quarter of this year also indicated that revenue was still lagging,” says CTO Secretary General, Hugh Riley.

Tourism inducements

Caribbean hoteliers and tourism marketers have had to place various kinds of inducements in the market to drive business forward including heavy discounting on accommodation and in some cases, airfares have been subsidised in partnerships with major airlines. This measure has had an impact on profitability. Some recovery in certain destinations has also been driven by cruise-tourism traffic, as the cruise-industry has consistently promoted its products as greater value for money. However, cruise-passengers are commonly known to spend less than long-stay visitors, especially given that the huge ships carry almost all supplies onboard when they leave their respective departure ports. This was reflected in the Bahamas where a record number of visitors - in excess of 5 million – entered the country in 2010 but the amount spent was nowhere near the 2008 levels prior to economic crisis, according to the country’s Tourism Minister, Vincent Vanderpool-Wallace.

In seeking to lure travellers to their shores, many islands have increased advertising budgets in their major markets, while others have created Festivals and other major events as attractions. “Staycation” campaigns have been launched where Caribbean residents and nationals are being encouraged to take their vacations at home. The Jamaican government, for example, increased its normal marketing budget of $US30M by US$5M. Also adding $US5M to its annual advertising campaign of $US50M, Barbados is hoping to attract more tourists from the United Kingdom and Canada.

As well as creating an international summer sports camp, the nation is seeking to ride on the star-power of globally recognised Barbados-born entertainer, Rhianna. The Barbados Tourism Authority recently formalised a three-year contract worth millions with the pop-star to assist in promoting the country. One of the best-selling artists of all time with more than 30 million records and 100 million singles sold, Rihanna was officially due to kick-off the partnership in Bridgetown, Barbados on August 5, where she was scheduled to perform as part of her 2011 ‘Loud’ world tour. As an ambassador for the island, Rihanna will exclusively promote the destination through advertising campaigns, promotional appearances and via her social media activities. She will also encourage Brazilians to visit Barbados during her tour appearances in the South America nation this September.

Significantly, Cuban tourism which welcomes more than two million visitors a year seems poised for another wave of growth as travel restrictions on US citizens are expected to be lifted in August 2011. Up until now, tourists to Cuba have mainly come from Europe, Canada and South America but with the lifting of U.S. travel restrictions, major growth from American visitors is anticipated with the destination billed to become the Caribbean's new hotspot.

The Caribbean: Increasing pulling power

The Caribbean wants to attract more visitors. It is reaching beyond its mainstream market with high calibre hotels and products and niche products such as sports, nature spas, diving, weddings, honeymoons, meetings and conventions, explains Carol Hay, the Caribbean Tourism Organisation’s (CTO) Marketing Director for the United Kingdom and Europe. The Waitukubuli Nature Trail, the Caribbean’s first and only long distance walking trail in Dominica, due to open at the end of 2011, is one example. “At our State of the Industry Conference in September 2011, we will be discussing the way the Caribbean can work together, continuing to develop our existing products and looking at new areas to ensure the profitable future of our tourism industry and development, ” says Hay.

Hugh Riley, Secretary General of the Barbados-based CTO, says there is scope for regional tourism cooperation with the EU under the Economic Partnership Agreement (EPA), a free trade agreement signed between the EU and the CARIFORUM group of nations in 2008 : “Through the signing of the EPA, the government of CARIFORUM and the EU provided access to European markets for Caribbean services, including tourism. The specific services are almost entirely private sector oriented.”  He continues: “Beyond the EPA, the Caribbean has a number tourism development needs in areas related to research, climate change adaptation, energy efficiency, marketing, standards and measurement and overall competitiveness.”  He also calls for, “EU support for the Caribbean’s position on the perplexing issues of aviation taxation and carbon emissions.”  The introduction by the UK of an Air Passenger duty in 2010 on outbound aircraft was one of the reasons that countries like Grenada saw their tourist arrivals fall 6.4 per cent last year compared to the previous year, says Carol Hay. High air fares in the Caribbean and sluggish growth in the United States also explain the dip in tourist numbers last year.

Bernard Babb