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Caribbean Tourism – The Numbers Game

A recent briefing by the Caribbean Tourism Organization reported tourism arrival numbers for the Caribbean region for 2013 as flat. The briefing and regional governments almost singular focus on arrival numbers highlights what is to some, a serious problem in how the economic value of this important industry is being tracked. The region and its tourism and economic officials seem to be engaged in the selective parsing of information related to the state of the industry and as a result may be misinforming the public. Numbers that focus on arrivals do not do enough to track the real economic impact of visitor travel, and ignore what may be the most important figures to Caribbean tourism economies – the spend level.
The so called spend level is an attempt to put a value on the actual expenditure per guest in each domicile visited and it is this number that helps show the “value on the street” of tourism to Caribbean economies. A direct correlation between employment and the tax base of a country, and the economic value of tourism is likely to be better understood looking also at these numbers than just focusing on cruise and/or stay-over visits. This is especially so in an era when hotel rooms are booked online as are cruise trips, allowing for almost all of that revenue to be processed and kept outside of the domicile/s to be visited.
Let us be clear that in no way am I discounting the direct jobs created by hoteliers and their purchasing power in terms of goods and local services, but in an age of investors requesting more and more in terms of corporate tax waivers, the baseline in terms of value to an economy of tourism may be employment beyond just that at the hotel facility and the tax base of those working there.
To be fair, while entities like the Caribbean Tourism Organization do at times address the spend level, the pomp associated with an increase in arrival numbers by governments often bely the reality that visitors are spending less, and as a result, the region’s economies are receiving less in terms of revenues. A sad reality is also that an uptick in arrival numbers may not correspond to more spending, contrary to what officials may try to insinuate. In fact, anecdotal evidence suggests that even countries that are seeing more and more tourist arrivals are seeing less and less in terms of visitors buying products and services. Maybe this can be chalked up to the economic downturn, the demographic of the traveller and/or the lack of variety of services and products that individual countries and the region sell. If so, it would be helpful if precisely this kind of analysis could be done and countries advised as to whether it is for example the cheapening of products available for sale that is part of the possible reason for lower spending by visitors. Ultimately, the numbers of stores shuttered in many countries, restaurants along main strips that now compete on the price for a bucket of beer and cheap tee shirt sales may serve to highlight a serious problem for the region. A commercial tourism sector that employs less may mean more unemployed roaming the streets and increased crime.
Some have blamed the cruise industry, arguing that this industry has served to bring to the region a visitor of a lower demographic station, insinuating that parties that visit via this medium are “cheaper”. That may well be an unfair assumption as in this industry as with others, demographics differ widely and there is a swath of people who cruise that have relatively high incomes and are willing to spend. Interestingly, a trend in this industry that should be noted by governments and policy makers is the increased use of preferred vendors to provide services to passengers and the effective steering of people to certain on-shore facilities and activities. The reason behind this may well be more one of entities trying to guarantee their charges the right kind of experience in order to secure their return business to the cruise ship brand, rather than an attempt to somehow segment the market space. A sad fact may be that this industry may feel the need to point people to certain locations and develop relationships with certain vendors to ensure a certain quality of service and security that Caribbean countries cannot in the wider community. If this is indeed the case, industry has had to step into a space where policy makers are failing.
Similar complaints were made against the all-inclusive industry years ago, as this type of value proposition to the traveller was seen as one that pulled visitors away from truly exploring the country they were visiting. The claim which was that a SuperClubs and Sandals experience was seen as the Caribbean experience that allowed people to check off their bucket list, not get to know the country, and diminish the likelihood of a return. The harsh light of day shows that in the case of the all-inclusive industry, while there is indeed a market for the value conscious experience, here as in the cruise industry there is also the high-end traveller. What the all-inclusive experience also now seems to provide beyond the value proposition, is also a security blanket within an enclave setting that is safe. The need for these two industries to protect their brands through managing the on-island experience may be just as high a priority as anything else.
At the end of the day and sadly after so many decades of apparently wandering in the wilderness, the question for the Caribbean and individual countries as it relates to tourism still is, “what do you want to grow up to be”. In essence, what is the region’s value proposition and how is it going to sell itself. While there are clearly island brand names like The Bahamas, Jamaica and St. Lucia, time may be running out for the Caribbean if tourism continues to be looked at through the myopic lens that it is.
If the region is to be a place where the cruise and hotel passengers come and can expect much in terms of a clean, safe and vibrant environment where the business community is actively involved in the development of policy and a whole of government approach is taken, then the region has a future. If however all the countries are, is an airport or cruise terminal for visitors to step of, en-route to a predetermined location away from a vibrant city center, the region’s economies are doomed and we may be well on the way to seeing this.
An encouragement to government leaders and tourism officials, be they at the local level or regionally such as the Caribbean Tourism Organization and the Caribbean Hotel & Tourism Association, is to step into the breach once and for all and work though the apparent chasm that is characterized by mistrust between regional civil servants and the private sector involved in the industry before it is too late. There is a need to engage in some of the granular issues affecting the economies of the region and the industry. Namely,
• Acknowledge and embrace the sad fact that crime is an issue and partner with civil society to find ways to solve this beyond piecemeal efforts at increasing police presence in certain tourist spots;
• Engage the rural and agricultural community to find ways to build farm to table programs to encourage employment in that space and ensure not only food security but maybe more importantly, employment. Cleary, not every one can get a job in tourism.
Ultimately it may well be tourism that offers the perfect opportunity for countries to properly integrate the agriculture, culture/heritage, transportation and energy sectors. The time to act is now however!
Finally, let us cease to release the numbers of arrivals alone but instead provide a comprehensive look at the real state of the industry. Recognizing that any true analysis is a result of numbers aggregated by individual countries, let us see governments effectively track and report on spend levels at the same time as visitor arrivals. Let us also have tourism and economic offices properly report on the buying power of visitors and in the case of cruise passengers, develop models that correctly estimate numbers for their individual countries versus claiming per passenger spend levels of a 3-5 day cruiser as their own when that individual visits multiple locations. The full accounting of the numbers can only help in providing an honest assessment of the value of tourism to the region, the real downstream value to the countries and the areas where Caribbean countries as a whole can do better to grow and protect the industry and the country/region brand.

Editor’s note: Anton Edmunds is the head of The Edmunds Group, a business and government advisory service firm that focuses on the Caribbean. TEG has offices in the U.S. and the Caribbean. Edmunds is also a senior associate at the Center for Strategic & International Studies (CSIS www.cisis.org). He can be contacted at anton@theedmundsgroup.com and prior posts reviewed at the firm’s Web site: www.theedmundsgroup.com.

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