WINFIELD GRIFFITH Caribbean Tourism Organization, July, 2009 OVERVIEW OF CARIBBEAN TOURISM IN THE CURRENT GLOBAL CRISIS – STATUS AND NEED FOR BETTER TOURISM STATISTICS Presented by WINFIELD GRIFFITH Caribbean Tourism Organization, July, 2009

Trends In CARICOM Tourism Raw data on arrivals over the last two decades paint a clear picture. Air arrivals increasing moderately, growing at an average annual rate of 2.3 percent. Cruise visitors activity grew more rapidly, especially in recent years, moving at 5.3 percent annual average.

Visitor Arrivals 1989 – 2008

CARICOM TOURISTS ARRIVALS SO FAR THIS YEAR 15 (out of 20) Countries reported to date. 13 declined some by as much as 20+ % Jamaica increased 3.2% in the first 5 months, while Guyana increased by 2.7% in the first 6 months. Arrivals to Dominica increased during January, February and April; to Grenada and St. Vincent in January only and during April to St. Lucia. There were no other monthly increases. Estimates suggest that arrivals to the sub region will fall by between 5.0% to 7.0 % during the first half of the year alone. Short term prospects not promising

CRUISE TOURISM TRENDS Cruise capacity expected to rise sharply Royal Caribbean & Carnival committed to launching new vessels in winter 2009 Including largest vessel afloat – 6000+ pass Competition will intensify as cruise lines are committed to providing 65,000 more beds in next two years – several mega liners Implications for lower prices in an already depressed market

Magnitude of Visitor Spending in CARICOM Visitor spending has actually out-stripped the growth in arrivals over the years Two decades ago aggregate visitor spending in CARICOM stood at around US$4.0Bil Spending rate recorded at annual average of 4.4 percent reaching total spend of over US$9.0Bil in the region in 2008.

Growth In CARICOM Visitor Arrivals & Expenditure 1992 – 2008

* Smith Travel Research 2007-08 & Jan-June, 2009 % CHANGE IN CARIBBEAN HOTEL OCCUPANCY AND ROOM REVENUE STATUS - 2007 - 2009 * Smith Travel Research 2007-08 & Jan-June, 2009

CHALLENGES TO REGIONAL TOURISM Protracted global economic instability High cost and fierce competition causing tourism businesses to struggle, consequently: - International airlines seating cutback - Regional airlines under threat - Hotels scaling down operations and laying off staff - Marginalization of travel agencies National tourism marketing efforts uninformed by sound and scientifically gathered data and intelligence Threats of pandemics (e.g. A H1N1 virus) and other disasters natural and man made Physical and administrative structure for maximizing benefits of specific activities (e.g. Yachts) not MAXIMIZED Adoption of new Technology sluggish and superficial The most important trend here is the growth in independent travel, by which we mean the broad range of travel outisde the pre-oackaged tour. Factors driving this trend include: the consumer is now presented with the increased direct availability of low priced offers from scheduled airlines and charter seat operators in Europe, where international travel has been long dominated by tour operators, independent travel is expected packaged vacations over the next 5 years (growing by 5.5% per annum according to a report by the Financial Times Management Group). the increased use of direct marketing and database marketing techniques by airlines, cruise lines and big players in the hotel industry to track customers and stimulate repeat business. growing use of the Internet to identify travel opportunities and options. PRESENTATION - BUCKNELL UNIVERSITY - MAY 2009

Linkages and Leakages Imports, Profits, etc Visitor Expenditure INFLOWS DOMESTIC ECONOMY OUTFLOWS Imports, Profits, etc Direct Impact Hotel Restaurants Taxis; Duty-free Ancillary activities Indirect Impact Goods and Services Leakages is one of the unfortunate words in economics. Induced Impact PRESENTATION - BUCKNELL UNIVERSITY - MAY 2009

FIVE MAJOR AREAS OF IMPACT Gross Domestic Product (GDP) or Value Added - ranged from .62 to .83 for normal multipliers for visitor expenditure impact in five selected CARICOM countries studied Balance of Payments Visitor expenditure fell between 10.7 and 38.6 percent of imports of goods and services. Employment - jobs supported by tourism ranged from 12.5% to 50.9 % of the employed labour force in these selected countries Government Revenue Government revenue attributed to visitor spending ranged from 9.3% to 40.8% with a modal value of 20% Investment

PROGNOSIS Continued negative growth in arrivals and aggregate visitor spend into first half of next year Some further declines in Region’s economies Expected negative impacts in the five areas described earlier.

NEED FOR VITAL STATISTICS Speculation is rife with respect to actual result of the global crisis and other realities on tourism in the respective economies Vital need for countries to produce a hard core of tourism performance statistics on a consistent and regular basis Better information needed for planning, policy making, sensible regulation & marketing Need to introduce and maintain some new systems or the revisiting of old ones which may need improvement

Tourism Satellite Accounts Urgent need to commence the establishment of the Caribbean Tourism Satellite Accounts Programme (CTSAP) Mandated by CARICOM heads in 2008 that CARICOM Secretariat collaborate with CARTAC, the CTO, ECCB and other regional institutions in assisting Member States to establish the TSA...” CTO coordinated an initial meeting of Caribbean agencies interested in the implementation of Tourism Satellite Accounting (TSA) systems in the region back in May 2006. The meeting included representatives from the CDB, OECS, ECCB, UWI/SALISES and CARTAC and a written submission from the CARICOM secretariat. Major decision was a commitment to continue or initiate specific roles in the TSA implementation process and to work within an established regional framework in that respect.

CTSAP PLANNING ACTIVITIES Conducted initial agency meeting CTO conducted a TSA Readiness Assessment and Implementation Plan Approached funding agencies (OAS, IDB) -now more interested than ever

Key Tourism Performance Indicators Hotel Performance and expectations (based on forward bookings) – Occupancy Rates - Average Room Rates - Revenue Per Available Room - Total Available Rooms - Advance bookings Carrier Performance Indicators – Seating Capacity - Load Factors - Average Airfares, etc. Tourism Prices Indices - Consumer prices - Producer prices

Capacity Building and Resource sharing must be vigorously pursued PARTNERSHIPS Establish links with key institutions and stakeholders regionally and internationally COORDINATION Working Group of regional agencies, stats offices, tourism offices and key private sector entities Capacity Building and Resource sharing must be vigorously pursued WAY FORWARD

Thank You for your attention RESTRICTED