Showing posts from March, 2012

Caribbean Tourism faces a tough UK market

By any measure, tourism remains the biggest industry in the Caribbean region.  The UK is a key source market for visitors and many jobs depend on arrivals to the region, remaining strong.  But the challenges are many as tough economic conditions, taxation and incentives for Brits to stay at home are hard to ignore.

Despite the optimistic economic outlook outlined in the Chancellors March 21st budget speech, Trevor Greetham, a fund manager at the UK's biggest ISA manager, Fidelity, said that the UK had little hope of emulating the impressive recovery currently on course in the US unless the Government relented on austerity measures. "America is experiencing a growing housing market, improved car sales and more job creation. We should be striving to create these conditions here, but austerity is keeping growth weak in the UK," he said.  Greetham’s sentiments are consistent with those expressed by other players in the UK’s financial services sector.

It is against this back…

Why is REDjet Grounded

I work up on Saturday 17th March, logged onto my laptop to read in the press that REDjet had suspended operations.  The notice on their website read in part –
“Unlike the heavily subsidised airlines that serve the region, REDjet does not receive any assistance. As indicated, REDjet is hopeful that we will be given a small part of the State assistance others receive, as it will allow us to get our recently approved and exciting new routes established and profitable. Once this happens, our shareholders and staff will do their utmost to see that there is no return to high fares and business as usual.”

The airline is registered in St Lucia but based in Barbados so I would imagine that the message was meant for the Barbadian government which arguably has the most to lose should REDjet fold.  From the debate online, I see three opinions developing.  Firstly, some say that REDjet was impacted by LIAT’s/CAL’s aggressive pricing response.  Secondly, some say they were plagued by technical pro…

Inside Job

As I follow the enquiry into the CL Financial failure, I would argue that there is value in expanding the discussion to include the wider system that allowed; if not encouraged the excesses and eventual collapse.This leads me to the award winning 2010 Charles Ferguson documentary called Inside Job which gives viewers a holistic explanation of the 2008 global financial crisis.  It is required viewing for anyone who wants to understand how the financial services industry evolved into the beast we see today.  It would be hard not to see any parallels between what happened on Wall Street and what happened in the Southern Caribbean with both the Stanford Financial and the CL Financial disasters.  There is some agreement that the problem lies in the wider system.  There is no agreement however, on how to resolve the wider systemic issues.  Of the many issues discussed, two in particular jumped out at me. 
Firstly there was George Soros’ analogy about the financial system being like a huge oi…

Rethinking Caribbean Tourism

Last month there was a press release published on the website of the Caribbean Tourism Organization (CTO) about the state of the industry.  While the press release did mention that overall, the Caribbean welcomed an estimated 23.8 million tourists in 2011, or a 3.3 per cent rise over 2010, these numbers do not tell the full story.  The real engine of regional growth was in the Spanish speaking Caribbean which compensated for the continued decline in many English speaking destinations.

USA and UK source markets performed poorly.  With 23 countries reporting, the region experienced weak arrivals from the UK for the third straight year, mainly due to a weak economy and increases in the Air Passenger Duty (APD).  Total 2011 arrivals from the UK did increase modestly thanks to increases to Anguilla, Antigua & Barbuda, Barbados, Montserrat and St. Vincent & the Grenadines.  But arrival levels were still below those of 2007 so the weak performance has been noticed for quite a few ye…