David Jessop | A new regional agenda for tourism | Company
No one should be in doubt. A toxic economic mix of war in Europe, soaring inflation, slowing Chinese growth, a likely global recession and a decision to cut production to raise oil prices by the ‘OPEC+ – the cartel that now includes Russia – threatens to put a brake on the recovery of tourism in the Caribbean.
More directly, some already relatively expensive tourist destinations in the Caribbean could see a significant decline next year, as household budgets are stretched, particularly in Europe, as post-pandemic personal savings evaporate, and airfares and input costs for hotels are rising. The Caribbean is less affordable for medium and low-end long-haul travelers.
The short-term implication is that many visitors may choose to holiday closer to home. This will likely make the United States and Canada markets more important, see an increase in the number of cruises to avoid higher land costs, require a new focus on encouraging air travel for visitors from Central America and of the South and will provide a competitive advantage to low input cost destinations. such as Cuba and the Dominican Republic.
Despite this, Caribbean tourism is unlikely to lose its long-term economic preeminence. As the pandemic has proven, an absent industry spells economic disaster for most Caribbean countries.
According to regional research, hospitality is now linked to almost every aspect of the Caribbean economy. It is a huge employer of labor both directly and indirectly (43 percent), is the largest foreign exchange earner in 16 Caribbean countries, is responsible for 53 percent of export earnings, is the sector that receives the most foreign direct investment, and by world standards, a higher percentage of GDP (33%) comes from tourism. It also indirectly supports the ability of governments in many countries to fund education, health care and social services through business-related taxes and other taxes imposed on visitors.
The pandemic has been a turning point for the sector. This has led many Caribbean tourism ministers to recognize the importance of building on past successes and the need to restructure the tourism value chain on a regional and sub-regional basis to ensure that over the long term, the economic benefits of the industry are durable, resistant to misfortunes and spread more widely throughout the region.
Speaking recently with Jamaican Tourism Minister Edmund Bartlett about longer-term initiatives the region could take to sustain and strengthen the sector, he highlighted the exchanges that took place last month as part of the Ministerial Council Caribbean Tourism Organization.
Describing the CTO meeting as the best he had attended, he said the focus was on the need to take a longer-term, non-traditional and much broader view of what the Caribbean has to offer. and to whom, the importance of creating new international alliances and the need for a whole-of-government and pan-regional approach, resulting in an industry that is sometimes at odds with public policies.
“Recovery cannot come without growth, and to grow we need to diversify, both within our tourism product and in the markets in which we expand,” he said.
Some of the solutions he and others are proposing have been well reported in the media – the need to further develop intra-regional multi-destination tourism as is the case in Central America; the harmonization and development of single visa regimes to facilitate pan-Caribbean travel, particularly for visitors from new markets; the creation of regional marketing, product development and investment strategies; joint air transport agreements; and significantly improved connections between regional and international airlines as part of a strategy to boost tourist arrivals.
Much less commented on, however, has been his view, also expressed separately by his Barbados counterpart, Lisa Cummings, and Cuba’s former tourism minister, now prime minister, Manuel Marrero, that the future of Caribbean tourism lies in the economic convergence between complementary economies, i.e. the construction of a new tourism architecture that better integrates the industry and its offer in the North-West and South-East of the Caribbean and their subsets.
According to them, this could translate into collaborative strategies to jointly develop attractive products and offers for new markets, enable economies of scale and see the pooling of resources to achieve common goals, the sharing of knowledge and skills transfer.
There are already signs of real progress on new markets. The development agreement signed in May between Jamaica and Saudi Arabia should be followed by an agreement with Barbados with, it is hoped, both a new air bridge capable of opening up markets for visitors in the Gulf, the Far East and Africa, and new investments.
Another intention that could revolutionize Caribbean tourism if implemented regionally is a policy that would allow all workers in the sector to share in the success of the industry.
Expanding on comments made during a recent speech at a Caribbean Hospitality and Tourism Association conference in Puerto Rico, Minister Bartlett suggests that those working in the industry should “stay at the heart of the recovery and future growth of tourism” and to have “seniority, mobility, and portability”. To achieve this, he believes that tourism must become more professional, strengthen human capital and provide permanent jobs. At the heart of this, he says, should be pegging employee wages to the US dollar, the currency in which most hotels transact business, an issue that is being explored in Jamaica.
It also promotes internationally the view that the Commonwealth and the Commonwealth Secretariat should play a much greater role in the development of tourism as an integrating force between Commonwealth countries. In a little-noticed but thought-provoking speech delivered in Rwanda at the Commonwealth Heads Meeting in June, he suggested that a much stronger Commonwealth focus on the sector could see the global grouping recalibrate its economic relationship and encourage convergence.
The CTO Ministerial Council asked Ministers Cummins and Bartlett to recommend a work plan that identifies how many of these ideas could be implemented. According to the body’s new chair, Cayman Islands Tourism Minister Kenneth Bryan, the two ministers will present a plan by January 2023 that could lead to a new sustainable growth agenda for tourism.
Speaking on the subject recently in Barbados, Minister Cummins made it clear that a much more holistic approach to tourism is needed to help develop and sustain the industry. She, like Minister Bartlett, believes that tourism development requires whole-of-government policy.
The opportunity now exists, perhaps for the first time, for tourism to be driven by Caribbean-centric economic thinking. A new regional tourism program would be a welcome step towards sustaining what has become the region’s main industry.