The Annual Tourism Summit in DC last month was truly a success for various reasons. Heads of state and our regional tourism industry met with the US Congress to discuss US policy towards the Caribbean region. CARICOM agreed to back the joint "One Caribbean" marketing campaign and lastly lowly people like me were able to network and "hob nob" with individuals far more important than myself. One such person was Dr. Auliana Poon of Tourism Intelligence International - "a leading consultancy in the field of new tourism".
Hence, Dr. Poon is the ideal person to talk about how a US, and even a world, recession will affect Caribbean tourism. According to Dr. Poon;
"it is no longer a question of whether the US will go into recession, but WHEN and how deep and how long? An expert at the Berlin Hotel Investment Forum this march predicted that the recession should be short-lived, the first six months of 2008 and get better towards the second half. He predicted, however, that it is the UK economy that we should watch out for in terms of recession. We have already seen house prices taking a dip."
These type of statements and warnings have been reiterated by British Chamber of Commerce (BCC), "services companies, which account for three-quarters of the economy, saw 'alarming' declines in the second quarter of 2008". Really? With Gordon Brown, the former Chancellor of the Exchequer, at the helm? But confidence, or lack of it, seems to be the issue at hand. BCC Director-general David Frost said: "The temptation for the Government will be to raise business taxes because the exchequer is running out of money. This would be a catastrophe...To put more pressure on business would not only restrict growth and hit the consumer hard, it would further crush what our economy is based on - confidence."
Certainly if the US goes into a recession it will definitely affect the European market. US outbound travel in 2007, according to the U.S Department of Commerce's travel branch the Office of Travel and Tourism Industries (OTTI), reports that the top five countries where U.S. spent their 2007 travel dollars were: Mexico ($11.1 billion), United Kingdom ($10.5 billion), Canada ($7.6 billion), Germany ($5.9 billion) and Japan ($4.7 billion). With US spending dwindling and not traveling overseas to support the economies of their distant relatives, the Europeans, could this mean a world recession? Well, according to Dr. Poon this is all dependent on "the length, depth and impact of the [US] recession". So, at this stage, only time will tell.
However, what will this mean for the Caribbean region? "Recession in the US will encourage americans to travel less (especially to far away places like Europe) and spend less in general because of lack of confidence and fear...for the tourism sector, the most tourism-dependent economies will be affected e.g. bahamas that gets 90% of arrivals from the US". But apparently, it's not potentially all doom and gloom, "At the same time, americans who travel to Europe and far-away destinations may want to trade up these long and expensive trips for destinations closer to home e.g. the Caribbean".
Dr Poon highlights the following strategies for the Caribbean, "target the high spending, long-stay european markets (good value for money now with the strong Euro) ; develop, market and sell unique experiences (such as festivals and culture) sports, health and wellness, that cannot easily be replicated and that will encourage dedicated travellers to chose the Caribbean". Well, if it's one thing we can offer in the Caribbean, it's diversity and a completely unique experience from island to island. This, also, seems to be the new strategy planned for the joint "One Caribbean" venture being employed by the CTO and the region's tourism heads. Senator Allen Chastanet has already stated that the Caribbean region plans to diversify from the traditional US "bread basket" and actively target new emerging markets such as Russia, who are known for their significant spending when on holiday, China and India.
From the offset, it seems that times may be a bit rocky - "travel volumes may fall and competition will be tougher". But surely there is strength in numbers and with Caribbean tourism banded together as one unified front, let's see if we can pull it off and make Caribbean tourism a truly sustainable industry.
1 comment:
Nice article Dominique, but far too over-optimistic. The anglosphere nations are on the downward bust cycle of the longest and peakiest boom cycle in modern history (and much of europe is coming off the high too). Hence there will be no 8 month recession as Dr Poon predicts - more like an 8 year global depression. Also, with peak oil here to stay, airlines cannot make money and a record 25 have gone bust in the last 6 months, with many more to follow (to compare, 8 went under in the 6 months following 9/11). This region has already lost about 50% of its AA airlift, Tobago alone has lost about 40-60% of its european airlift. More to follow - best thing for Caribbean tourism businesses to do is batten down the hatches, reduces overheads, deleverage as much as possible and stockpile tinned food in guarded storerooms! You may be able to pay the staff with them one day soon. Worst possible thing to do is rely on, or wait for, any of our distinguished and efficient island politrickians to do anything other than line their own pockets - waiting for help from them = certain doom for you and your business/dreams. Hold on tight - in 10 years, and if Branson's scientists invent bio-jet fuel, this region may once again see tourism flourish.
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