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Point of View: Caribbean Tourism Marks Milestone

Point of View: Caribbean Tourism Marks Milestone
The Star. (St Lucia), Catherine Morris, HomeBusinessweek

The Caribbean reached a milestone last year, welcoming over 30 million visitors for the first time in the tourism industry’s history, according to the Caribbean Tourism Organization (CTO). CTO Secretary General Hugh Riley cautions that there is “more to be done”, however, as the numbers show arrivals were unevenly spread throughout the islands, with some destinations better than others at attracting the tourist dollar.

Caribbean tourism has been growing steadily over the last eight years and increased by 1.7% in 2017. Total visitor expenditure reached US$37bn, with stay-over arrivals providing the lion’s share of US$34.2bn.

“The performance in 2017 was primarily supported by sustained economic growth in all of our major source markets,” said Ryan Skeete, CTO Acting Director of Research in announcing the organization’s State of the Industry report. This was particularly evident in the United States where solid economic growth, low unemployment and high consumer confidence drove 14.9 million American tourists to visit the islands — a 0.5% increase from the previous year.

While the region performed well as a whole, some destinations showed a lacklustre performance. Hurricanes Irma and Maria roared through some islands in September 2017, causing widespread damage to tourism infrastructure and dampening interest from source markets. Tourism in some of the hurricane-impacted islands fell by as much as 18%.

By contrast, Saint Lucia was one of the year’s success stories, recording double-digit growth of 11%. Skeete attributed this to a number of factors including greater air access and high-profile investments in the industry such as new resorts and facilities. He added that destinations which saw growth in 2017 would also have benefitted from focused promotional efforts, saying: “Increased seat capacity, new room stock and improved marketing efforts would have contributed to the performances generally.”

Saint Lucia’s strong performance may be good news for the island and the wider region but CTO Secretary General Hugh Riley warns Caribbean stakeholders not to be complacent, saying: “Despite the severe challenges of 2017, more visitors arrived in the Caribbean and they spent more. But is that enough? Is our work now over? Not by a long way. The Caribbean, with a highly competitive tourism product, has quite some distance to go in order to realise our full potential.”

One of the biggest tasks on the horizon is educating future visitors. When the category 5 storms tore through the region last year, images of collapsed buildings, flooded streets and crumbling infrastructure were beamed all over the world leading to the perception that the Caribbean was damaged beyond repair. Those unfamiliar with the geography assumed that all islands were affected in some way and arrivals to the Caribbean sharply dipped as a result. Now industry must spread the word, letting travellers know that many islands were left unscathed and that those affected are rebuilding and rejuvenating; in short, that the Caribbean is open for business.

Saint Lucia was one of the year’s success stories, recording double-digit growth of 11%.

“Perception is all that matters when it comes to driving business,” says Alex Zozaya, CEO of Apple Leisure Group. “Perception has affected business even more than the hurricanes themselves.” Zozaya, President and Founder of AMResorts, suggests that those in the industry look at trips for travel agents and broadcast live media from Caribbean destinations to tell the world that the region is ready to welcome visitors.

Looking ahead to 2018, Riley wants Caribbean destinations to take greater ownership of their product and says: “The first order of business as a region is to stop treating tourism as some sort of casual pursuit. Tourism is a serious business. Tourism is the business that delivers foreign exchange every time a plane lands and a cruise ship docks. It reduces unemployment and delivers massive amounts of tax dollars to our national treasuries. We should worry when we’re not using this job-creating, tax-generating, foreign exchange-earning machine to its full potential.”

Despite reaching the landmark 30 million visitor target, there is room for improvement in the region’s 2017 performance. Hotel occupancy rates were 70%, a 1.2% drop from the previous year, while the Caribbean’s overall market share shrank by 0.1%. “Of every hundred rooms available, at least 30 are going empty every night,” says Riley. “This tells us that we have an opportunity — indeed a responsibility — to market ourselves more effectively, to improve the quality of our service substantially, to enhance the value of our product significantly and to fill those empty rooms.”

Riley believes that understanding exactly how tourism impacts life in the Caribbean is key to unlocking its potential and wants to see a system that can trace the tourist dollar through the economy, breaking it down so that Caribbean citizens can see exactly how that investment is dispersed throughout their communities. “This business can truly be the lifeblood of the Caribbean, but we have to treat it more seriously.”

The CTO is certainly taking the industry seriously, and recently adopted a Strategic Plan covering the period 2018-2022. The plan identifies seven key areas, including human capital development, and is designed to deliver on the organization’s mandate of positioning the Caribbean as the premier warm weather destination. Other priority areas include sustainable product development, tourism brand leadership, market intelligence and resource mobilization and sponsorship.

The mood going into 2018 is optimistic. The CTO is predicting growth of 2-3% and says it expects tourist arrivals to increase between 2% and 3%, supported by the strengthening US, European and Canadian economies which will be favourably impacted by low oil prices.

The Caribbean tourism industry is in a strong position but it must maintain market share in an increasingly competitive environment. Riley has a stark word of warning for the sector: “We are thankful for the results in 2017 and we have to celebrate our victories, but there are bigger celebrations occuring in the places that are stealing our market share. In this highly competitive business we have to keep fighting in the Caribbean, and we have to win.”