Tourism outlook ‘optimistic despite tax bugbear’

Although high taxes on Caribbean air travel remain a concern, the region’s tourism watchdog is cautiously optimistic that the industry is set to continue to deliver solid results into 2019.

After months of recovery efforts from hurricanes in some Caribbean destinations, the region recorded its second highest visitor arrivals on record last year, according to the Caribbean Tourism Organisation.

The Caribbean remains the most tourism-dependent region of the world.

Overall, the region welcomed some 29.9 million visitors in 2018, representing a slight decline of 2.3 per cent over the previous year, when 30.6 million visitors came to the Caribbean.

Secretary General of the Caribbean Tourism Organisation Hugh Riley (right) and Acting Director of Research and IT Ryan Skeete.

Delivering a review of the industry in 2018 this morning at the CTO’s headquarters at Warrens, Acting Director of Research and IT Ryan Skeete said with a strong performance during the last four months of 2018, including a robust showing by countries impacted by the 2017 hurricanes, “the evidence suggests that Caribbean tourism is on the upswing”.

The top five destinations in the region last year were Guyana, registering a 15.9 per cent increase; Belize 14.6 per cent, the Cayman Islands 10.7 per cent, the Bahamas 10.5 per cent and Grenada a ten per cent climb.

Hurricane-affected islands all recorded double-digit declines.

Skeete told journalists: “The contributing factors to the excellent performances in the countries not impacted by the hurricanes included sustained targeted marketing, upgraded tourism infrastructure, additional rooms and enhanced airlift.” 

Despite registering a 6.3 per cent decline, to reach 13.9 million American tourists last year, the US remains the region’s largest source market for tourists. But it was Canada that outperformed all other markets last year with 5.7 per cent growth or 3.9 million visits, mainly due to seat capacity to the region.

The fall in visitor arrivals from the US was attributed mainly to steep declines in arrivals to popular destinations hit by hurricanes, such as Puerto Rico, which was down by 45.6 per cent, and St Maarten, which fell by 79 per cent.

Arrivals from Europe improved modestly by an estimated 1.3 per cent, partially reflecting the fact that more UK tourists were switching to domestic holidays due mainly to uncertainty surrounding Brexit.

UK arrivals remained flat at an estimated 1.3 million for last year.

Back at home, intra-regional travel had its best performance ever, reaching a record two million visits, representing a strong 5.3 per cent rise.

This was followed closely by South America, which produced 1.9 million visits, or a 3.6 per cent increase.

Skeete said: “The outlook for Caribbean tourism in 2019 is cautiously optimistic . . . Of course, we must recognize that there are significant headwinds to navigate. These include, but are not limited, to the outcome of the Brexit negotiations, the on-going trade war between the US and China and potential extreme weather events in the destinations and marketplaces.” 

CTO Secretary General Hugh Riley said while he celebrated the Caribbean’s victories and he was satisfied that destinations were doing “a lot” to market the Caribbean as a favoured destination, he remained concern about high government taxes and instances of crime.

Riley also urged regional authorities to give travellers more reasons to come to the Caribbean all year round, suggesting that destinations should focused more on niche areas including family travel and romance.

“The question of taxes in the tourism sector is an ongoing one,” said Riley.

But, he said, he was aware that Caribbean governments used aviation taxes to “pay for facilities that are needed to enhance the experiences that we want our visitors to come and enjoy”.

“So we need to make sure that the value that we offer actually does exist. The good news is that the numbers are increasing and we are paying a lot of attention to that aspect of keeping the balance and we can see where the money is going,” said Riley.

Adding that safety of citizens and tourists was a “number one concern”, the tourism official said the CTO was “comfortable that the authorities throughout the Caribbean are focused on all aspects of safety”.

Based on the UK-based travel data organization OAG, air capacity in the Caribbean for 2018 decreased by 3.4 per cent, while the number of flights declined by 4.3 per cent.

Skeete added: “However, as with arrivals, there was a reversal of these numbers in the fourth quarter, with seat capacity rising by 5.3 per cent, while frequency grew by 5.2 per cent.” 

Also reporting on hotel trends in the region for last year, Skeete told journalists that in line with the overall decrease in arrivals, hotel occupancy fell by 0.8 percentage points.

“However, the average daily room rates increased by 1.7 per cent to $207.61, while revenue per available room grew by 0.6 per cent to $135.46,” the CTO official said.

In relation to the cruise industry, Skeete said last year was one of the best for the region, after a “rapid recovery” from the 2017 hurricanes.

The number of cruise passenger visits reached an estimated 28.9 million, up by 6.7 per cent.

The CTO is projecting that tourist arrivals will increase by between six and seven per cent in 2019, as the damaged infrastructure in the hurricane-impacted destinations returns to capacity. Cruise arrivals are also projected to expand by a further four to five per cent.