“Outlook 2030 – The Reality of Economic Recovery in the Caribbean and Central America”
Ladies and Gentlemen:
I submit to you that tourism is the key to economic recovery and sustainability in the Caribbean and Central America. According to the Oxford Economics report that, together with the World Travel and Tourism Council, CHTA commissioned in May this year, the ‘travel & tourism economy’ in 2009 accounted for 12.8% of the region’s GDP, 11.3% of employment – that’s 1.9 million jobs – 21.7% of investment in the region, and 15.6% of exports.
Oxford Economics forecasts Travel & Tourism’s contribution to the Caribbean’s GDP will be $76.5 billion by the year 2020 - $3.8 billion more than in 2009.
In the past 20 years the structure of the Caribbean economy has changed almost beyond recognition. It has moved from one that was largely agriculture-dependent and preference based, requiring government’s constant intervention, to one that now has to a significant extent rely on tourism, an industry that is private sector led, largely without subsidies and dependent on the regions natural environment.
Put another way, tourism and its ability to compete globally has in all but a few Caribbean nations become the essential provider of employment and national income; and by extension a principal provider of taxes that pay for voter’s expectations of everything from education to health care to roads.
Many of our politicians and senior officials as well as our people still seem to have great difficulty understanding this.
In my first act as President of the Caribbean Hotel & Tourism Association, CHTA, we launched the Tourism Is Key advocacy campaign underlining the importance of travel and tourism to our Caribbean economies.
The campaign targets a broad audience from Caribbean Heads of State across the region to Caribbean citizens.
The first Public Service Announcements, produced by CHTA, illustrated the following key points:
* The impact of tourism on jobs
* The impact of tourism on the wider economy and each destination
* The impact of tourism on investments for the future
In order to remain viable, we need to ensure the sustainability of our industry today. There must be a strong consensus of our leaders and the public so that travel and tourism will receive the full support it needs as the Caribbean’s most vital export industry.
It is the fastest way to create jobs, grow the economy and generate income for all.
Noting the importance of the tourism industry, Prime Minister of Great Britain, the Hon. David Cameron made the following remarks in London on August 12.
“For too long tourism has been looked down on as a second class service sector. That is just wrong. Tourism is a fiercely competitive market, requiring skills, talent, enterprise and a government that backs Britain. It is fundamental to the rebuilding and rebalancing of our economy. It is one of the best and fastest ways of generating the jobs we need so badly in this country.”
China’s premier just declared travel and tourism as a strategic pillar of the Chinese national economy going forward. It will be factored into all policy-and decision making.
Unfortunately, we have not had any Caribbean Head of Government publicly recognise this in a similar manner. For us too, it has the very real potential for economic development and an alleviator of poverty in the region.
If the highly diversified economies like the UK’s and China’s can recognize the urgent need to prioritize its tourism sector than there is no excuse for the Caribbean. Our region is more suited to travel and hospitality than any other. It must become known as the BEST warm weather destination of the western hemisphere.
Another voice which carries great weight is the one of Robert Crandall, former Chairman of American Airlines. At our annual Caribbean Hotel and Tourism Investment Conference in May of this year, he said: “The Caribbean is uniquely dependent on tourism. Everyone involved in travel and tourism knows that our industry is immensely important to the world economy, generating and supporting – either directly or indirectly—about one in eleven jobs worldwide.”
“Here in the Caribbean, it is even more important. On a number of islands, travel and tourism accounts for more than 50% of all employment, and on some islands for more than 75%.”
Crandall also urged that “travel and tourism should be at the center of our collective consciousness since the Caribbean is more dependent on travel and tourism than almost any other region. Of the 10 countries in the world most dependent on tourism, 7 are in the Caribbean.”
I would like to take a moment to demonstrate the current and potential linkages between the hotel industry and the local economies in the Caribbean. I am using a 2007 Hotel Spend Study that was conducted for the Caribbean Hotel and Tourism Association by an independent firm, Tourism Global Incorporated.
The study shows that in the Caribbean the following takes place:
* Hotels purchased 93% of their utilities locally.
* 91% of telecommunications locally.
* 71% of all information technology services are sourced locally.
* The largest agricultural product sourced locally is vegetables at 74% locally and 11% regionally.
* The second largest food product is dairy at 67% sourced locally and 10% regionally.
* Meat is third with 63% supplied locally.
* The hotel sector sources 50% of alcoholic beverages locally.
* The study also shows that the average guest takes 2.3 taxi trips, visits 1.3 attractions in the destination, 1.5 restaurants outside of the hotel and goes on 1.7 shopping trips.
The hotel sector in addition to its direct and indirect expenditures in the local economy actually provides and supports entrepreneurial opportunities.
* 57% of hotels’ taxi concessions are run by independent interests.
* 48% of the hotels’ water sports are outsourced locally.
* 46.3% outsource their gift shops.
* 40.7% the beauty spa and salon.
* 31.5% outsource their craft stores.
Granted, there is plenty of room for improvement. We must encourage our industry to focus their purchasing departments to always try and feature local products alongside the imported ones.
This would achieve two things very quickly, first it will very visibly support the local economy and second it will highlight and enhance the Caribbean experience for our visitors with locally produced flavours.
It is to be noted that 79% of the hotels surveyed indicated a willingness to purchase more inputs locally. There are noted barriers, namely issues of availability, price and consistent quality. LET US WORK HARDER TO FIX THIS.
In line with this effort, we also must improve regional linkages between our local agriculture industries and the hotel sector.
One of the keys to establishing a strong global brand for the Caribbean is our unique cuisine. We are already known for our spices and premium products, from jerk seasoning and escoviches to high end rums, coffee products, liqueurs and beers. A solid policy of placing a Caribbean product next to an imported brand will also give our local products an international showcase and may create future demand from our visitors.
One important factor to this initiative will be a new format for “Taste of the Caribbean” in 2011 when our chefs will attempt to ‘wow’ the taste-buds of the American consumer and celebrate Contemporary Caribbean Cuisine.
This year we reached an agreement with a cable TV network to produce a one-hour show on our Taste of the Caribbean culinary competition to air 12 times during primetime in 2011. This is a big step in the right direction.
I said this earlier, but it is so important that it is worth repeating:
Tourism business means jobs, not only in the hotels, but work for the taxis, the wider services industry, the restaurants, the farmers and fishermen who will supply the restaurants with food.
It also means work for the seamstress and the craft vendors. And the shopkeepers including all their workers, from the deliverymen to the trash collectors.
We need to make a statement to the world; to our politicians and to the general population of our countries that tourism feeds the economic chain and builds strength in the human resource development of our young people.
We need to ensure that our own people have the tools and knowledge so that they can participate in the ownership and economic benefits of the industry.
It is so important that our investment in training facilities as well as tourism studies in our schools and colleges continues and grows. Our region is ripe to create the most valuable tourism labour pool. Our people are natural hosts already, with excellent training and focus on their professional education, the opportunities in the region and indeed in all of North America are endless.
Every citizen needs to understand that, whether or not he or she works directly in the tourism areas, every tourist’s dollar brings economic and social benefits to every level of our society.
This is ever more crucial in today’s economic climate.
Previous efforts to get this message across have resulted in mixed success. This is why our Tourism is Key campaign is trying to influence the average voter who may not realize how dependent his/her livelihood is on travel and tourism.
Most destinations get more visitors over the course of a year, than there are residents. This is a common thread among our Caribbean islands.
The economic impact of reduced visitor numbers will trickle down right away. There will be an immediate effect of less income and a reduced flow of tax revenue to our governments, all of which will carry serious economic and social consequences.
I urge all of you here today to assist us in the Caribbean travel and tourism industry and to help us to achieve three main goals:
1. Strong advocacy for the tourism industry with government and the general public.
2. Faster regional integration and the removal of barriers for regional travel. This will enable Caribbean nationals to fuel the tourism growth in neighboring destinations.
3. The creation and launch of a sustainable marketing and promotion fund for the Caribbean. This is more than a decade overdue and we cannot wait any longer.
In the last 20 years, according to CTO, tourist arrivals to the region have increased from 12 million to 22.1 million – an 84% increase. Tourism represents the prime economic driver for the next twenty years.
Data from STR (Smith Travel Research) shows that the region’s occupancy in 2009 at 61.6% - if we were able to move this needle upwards by 5 percentage points, this would equate to an additional $3.2 billion to the Caribbean economy – and the related increase in employment.
Through the travel and tourism industry the table is already set for the Caribbean and Central America’s economic recovery through the year 2030.
Ladies and Gentlemen: The time to act is now. A successful tourism industry benefits ALL.