Keeping Up with the Spanish Caribbean
The tourism sector may not be as lucrative as 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 and within the English-speaking Caribbean. I also wanted to reflect on the concern already 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. 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 had hit an unexpected record in the first four months of 2012. The number of visitors reached 1.24 million, up 5.2 percent over the same period in 2011. More significant than crude visitor numbers is the 12 percent increase in visitor revenue.
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It is important not to exaggerate this shift from the English speaking to the Spanish-speaking Caribbean and recognize 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 a 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 London Gatwick's profitability to the Barbados route has not been lost to decision-makers at Caribbean Airlines. Fatca Tax Singapore
Looking at Jamaica's developments 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 and the Hedonism Runaway Bay, and Trelawny Beach in Jamaica, along with hotels in Panama, Curacao and even in Brazil. 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 recognize 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 a cheap charter product, but this is definitely no longer the case. There is now a very strong five-star product in the Dominican Republic and the Mexican Riviera, making the North American and European markets sit up and notice. The result can be seen in the statistics.
In the English speaking Caribbean, accommodation around certain entertainment spaces tends to perform particularly strongly. I am referring to areas like Rodney Bay in St Lucia or the Gap in Barbados by entertainment spaces. Perhaps recognizing this, the Bahamas have plans to revitalize the Bay Street area in Nassau, and the Tourism Ministry in Trinidad has similar plans for Ariapita Avenue in Woodbrook. I know that there has been some skepticism about the Ariapita Avenue project. Still, I wonder whether, given wider regional trends, there could be economic benefits in stimulating domestic tourism and increasing average visitor spending 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. 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 and 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.
Note: The blog that used to be here is now at https://www.mooresrowland.tax/.