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Going after a bigger slice of tourism pie

Monday, November 2, 2015

The logic of the capitalist accumulation is for an industry to grow out of its skin otherwise face the possibility of stagnation, eventual decline with the likely chance of a competitor eating your supper. It is a challenge the tourism industry of the Caribbean could face if it does not increase its market share of the international tourism industry.  

Put differently, the Caribbean has to eat the lunch of some other tourism region or have someone else dip their fingers in the dinning plate of the region. Data for the first six months of 2015 indicate a growth rate of 5.8 per cent higher than the corresponding period for 2014. That level of growth is higher than the average 4.1 per cent experienced by the international tourism industry for the period.

Taken by themselves, the figures on returns from the Caribbean tourism industry up to June of this year are impressive: 14.8 million tourists came into the region, that amounts to 800,000 above the number for the corresponding period of 2014. In dollars and cents terms, the figures for 2014 show that the region took US$30 billion from the industry with significant contributions to jobs and government revenues.  

However, when the growth in the Caribbean tourism industry is taken in the context of the 1.1 billion tourists arrivals, and given the dependence of the region on tourism, the eastern and northern Caribbean more so than the south, the Caribbean’s share of the international market is a modest 2.8 per cent.

“The Caribbean has a relatively low global market share compared to the importance it places on its tourism economy,” said the UN World Tourism Council, Director/Executive Secretary of Member Relations, and Carlos Vogeler, at the State of the Industry Conference (SOTIC) in Curacao late last month.

But in addition to the numbers, and as pointed out by Barbados’ Minister of Tourism and International Transport, Richard Sealey, the success of regional tourism cannot only be measured in terms of the macro-economic figures given above, we have to calculate if and how the revenue drawn from tourism filters into the economy.

The numbers of sustainable jobs being created, what is the local content of the tourism spend in relation to what leaks out to airlines, foreign hotel owners and managers, to purchase food and the accessories for the industry, really how much value is being added locally to the tourism product.

This year’s Sotic once again sought to grapple with and find answers to issues that have been at the centre of concerns for tourism for perhaps the last decade. The high levels of taxation imposed by governments on the airline industry, at airports and other places where the tourist dollar is captive is one issue that will not easily go away.

That is so because with regional governments having narrow tax bases from which to draw revenue for infrastructure and basic living needs, it will take more than simple restating of the view that reduction of taxes will encourage greater travel into and around the region and inevitably result in increasing revenue from increased numbers of visitors and what is available for them to spend.

JetBlue’s President and CEO Robin Hayes relates that in instances in which the airline, a virtual “new kid on the block” in the Caribbean, has been able to reduce its air fare by 30 per cent, that has resulted in a doubling of the number of tourists brought into the region. What is needed are hard data to demonstrate to governments that the theory of reducing taxes to increase arrivals and revenue is one that works.  

One relatively new but vigorous challenge which will exert much pressure on governments and the moral fibre of Caribbean societies was presented to the industry by a travel agent who specialises in bringing travellers from the Lesbian, Gay, Bi-sexual and Transvestites community.

The tantalising prospect of seeking to get a share of the US$100 billion market created by the travel of members of the LGBT community from America alone will make finance ministers gleam; but will call down the wrath and damnation of rightly religious Caribbean society on the heads of all of us; the sacred and the profane alike.

Remember a few years ago in Tobago when jazz show organisers included Elton John (who has made known his sexual life style) on the show card, there were serious concerns expressed that he could somehow contaminate the environment. In a few instances in other countries there have been direct actions of the LGBT which have upset nationals; in a few instances gay and lesbian couples have been found to be engaging in sexual acts in public.

Secretary General of the Caribbean Tourism Organisation, Hugh Riley, observes “no business can afford to ignore a significant market segment.” However, he rightly notes that it’s up to governments and their populations to decide on whether or not to open their doors to the LGBTs.

One very possible challenge that can be undertaken is for Caribbean countries to explore the Chinese market. The middle class has expanded and there has been a 40 per cent increase in Chinese travelling over the last year.

China has found itself all over the Caribbean; there is the requirement now to balance trade and economic activities between us here in the Basin and the Far East. 

Remember, we are defending our dinner. 


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