Keeping Up with the Spanish Caribbean
The tourism sector may not be as lucrative as say, the energy sector, but in a tourism dependent region like the Caribbean, it remains a force to be reckoned with. For a while now I wanted to comment on some trends observable at the regional level as well as within the English speaking Caribbean. I also wanted to reflect the concern already being expressed in other blogs about some property development projects.
At the regional level, CTO (Caribbean Tourism Organisation) statistics have demonstrated for the better part of the last decade, that there is somewhat of a shift in visitor numbers from the English speaking destinations to the Spanish speaking ones. This is old news as it is easy to see that Mexico has almost completely recovered from recent problems and Cuba continues to experience its biggest tourism boom since the revolution. In early May, the Cuban National Statistics Bureau (NBS) announced that arrivals have hit an unexpected record in the first four months of 2012 as the number of visitors reached 1.24 million, up 5.2 percent over the same period in 2011. More important than crude visitor numbers, is the 12 percent increase in visitor revenue. USA Tax Singapore
It is important not to exaggerate this shift from the English speaking to the Spanish speaking Caribbean and to recognize that that the impact is more pronounced on specific niches, demographics and source markets. If we were to focus on the hotel product in the English speaking Caribbean, it would appear that four star product seems to be faring particularly poorly. The plight of the Almond Group in Barbados (and formerly St Lucia) has been well publicized. Barbados is understandably very concerned as the Almond four star bed stock to some extent anchors their ex UK airlift. I am sure that the downward pressure this potentially puts on the profitability of the London Gatwick to Barbados route has not been lost to decision makers at Caribbean Airlines. Fatca Tax Singapore
Looking at developments in Jamaica lends credibility to the hypothesis that four star English speaking Caribbean product is being disproportionally affected by the rise of the Spanish speaking Caribbean. Last Sunday’s Editorial in the Jamaica Observer mentioned John Issa’s disposal of his Breezes Runaway Bay and Montego Bay hotels, as well as the Hedonism Runaway Bay, and Trelawny Beach in Jamaica, along with hotels in Panama, Curacao and even in Brazil. Yes there are other factors at play but part of it may be weakening demand in the middle of the market for the English speaking Caribbean, while demand at the very top and lower ends remain relatively robust.
Consumers are recognising that for the price of a four star holiday in the English speaking Caribbean, they can enjoy a five star experience in the Spanish speaking Caribbean. The Spanish speaking Caribbean used to be broadly regarded as cheap charter product but this is definitely no longer the case. There is now very strong five star product in the Dominican Republic and the Mexican Riviera that is making the North American and European markets sit up and take notice. The result can be seen in the statistics.
In the English speaking Caribbean, accommodation around certain entertainment spaces, tend to perform particularly strongly. By entertainment spaces, I am referring to areas like Rodney Bay in St Lucia or the Gap in Barbados. Perhaps recognising this, the Bahamas have plans to revitalise the Bay Street area in Nassau and the Tourism Ministry in Trinidad have similar plans for Ariapita Avenue in Woodbrook. I know that there has been some scepticism about the Ariapita Avenue project but I wonder whether, given wider regional trends, there could be economic benefits both in terms of stimulating domestic tourism and increasing average visitor spend from overseas arrivals. Perhaps in time decision makers will publish such analysis.
My final point is about overseas investors. Antigua is still trying to recover from the combination of global economic contraction and the Allen Stanford affair. There was an article in the March 12th edition of the Wall Street Journal entitled - ‘Robin Hood’ of Antigua Left a Mess. The title says it all. The smaller territories are particularly vulnerable to wealthy international investors with other motives. Short term gains (particularly by the political elite) must be subjugated to the longer term reputational damage and the socioeconomic disruption that the rapid inflow of ‘easy’ money leaves in its wake. A relatively new investor is raising eyebrows as well as many questions on certain blogs in Barbados and elsewhere. Let us keep an eye on this development.
My name is Derren Joseph and I love the Caribbean region. Despite its challenges, I continue to have the audacity of hope that we will enjoy a brighter tomorrow. Read more on derrenjoseph.blogspot.com