Caribbean

Caribbean has high hopes for tourism recovery in ’14

Cap Juluca, an upscale luxury resort on the Caribbean island of Anguilla. (Credit: Larry Luxner) Cap Juluca, an upscale luxury resort on the Caribbean island of Anguilla. (Credit: Larry Luxner)

By Larry Luxner
Special to News is my Business

The Caribbean will enjoy steady growth in its all-important tourism sector as the U.S. economy continues its recovery, but serious issues — ranging from violent crime in some destinations like the Bahamas and Trinidad to the widely despised U.K. air passenger duty — could prevent the region from realizing its full potential in 2014.

“In the New Year, let us work together to address the onerous taxes that suffocate our sector,” said Beverly Nicholson-Doty, chairman of the Barbados-based Caribbean Tourism Organization, which this year celebrates its 25th anniversary. “While we will not soften our stance on requesting the British authorities address the air passenger duty in a manner that is equitable, we cannot ignore the effects some of our own tax regimes are having on intra-regional travel.”

The biggest challenge, say hotel and tourism executives throughout the region, is increasing airlift — whether it’s bringing tourists from around the world or getting residents from one Caribbean island to another.

“Airlift is basic. The islands that will deliver the most returns are the ones that have the most airlift,” said Frank Rainieri, vice-president of business development and real estate for Grupo Puntacana, speaking at a November 2013 tourism conference in the Dominican Republic.

“We see a bright future because investors are investing in hotels, banks are lending again, and brands are starting to do things they haven’t wanted to do in the past,” Rainieri told Hotel News Now, noting that a 13 percent jump in the number of seats flying into Punta Cana has been a huge boost to the hotel sector.

Dramatic sunset over an ancient sentry box in the Caribbean port of Cartagena. (Credit: Larry Luxner) Dramatic sunset over an ancient sentry box in the Caribbean port of Cartagena. (Credit: Larry Luxner)

This is the year the largest hotel ever built in the Caribbean — the 2,900-room Baha Mar resort in the Bahamas — is expected to open. The planned December 2014 inauguration of the $3.5 billion project means an additional 260,000 seats will be needed to fill all its rooms, says Vincent Vanderpool Wallace, the country’s former tourism minister and now principal of Nassau-based Bedford Baker Group.

“We should figure out some ways that the cost of air transportation coming into the region is as low as possible,” Wallace said. “We need ways to fill the rooms we have in the Caribbean that aren’t filled more than we need more rooms.”

The English-speaking island of St. Lucia said 2013 marked its best year for tourism ever, with 315,000 tourists visiting last year — surpassing 2011’s record of 312,404. Preliminary statistics boast a 3.4 percent increase in overall arrivals from 2012.

“Several factors played an integral part in the success we’ve had this year, each as necessary as the other — from increased airlift accessibility and strategic marketing initiatives to the enhancements made by our hotel partners,” said Lorne Theophilus, St. Lucia’s minister of tourism, heritage and creative industries.

Caribbean depends on U.S. travel
With the exception of Cuba, which remains subject to a U.S. embargo more than half a century after its enactment, the Caribbean region depends on the American travel market — and that region’s booming cruise ship industry has helped cement Miami’s position as the world’s busiest cruise port. I

n late December, port director Bill Johnson announced that Miami had added two new cruise brands — Regent Seven Seas Cruises and Disney Cruise Line — and that more than 5 million passengers will use the port in fiscal 2014, up from just more than 4 million in fiscal 2013, which ended Sept. 30.

During the 2011-12 season, cruise ship tourism generated nearly $2 billion in direct expenditures, more than 45,000 jobs and around $728 million in employee wages among the 21 destinations included in an exhaustive survey conducted by the Florida-Caribbean Cruise Association.

Aerocaribbean ATR-42 aircraft prepares for takeoff in Santiago de Cuba. (Credit: Larry Luxner) Aerocaribbean ATR-42 aircraft prepares for takeoff in Santiago de Cuba. (Credit: Larry Luxner)

The FCCA said five destinations enjoyed direct cruise tourism expenditures of $100 million or more in 2011-12: Bahamas ($393.8 million); St. Maarten ($356.2 million), U.S. Virgin Islands ($339.8 million); Puerto Rico ($186.6 million) and Cayman Islands ($157.7 million). Combined, these five destinations with $1.43 billion in direct spending comprised 72 percent of total cruise expenditures among the 21 destinations surveyed by the FCCA (the Caribbean’s largest island, Cuba, wasn’t included in the report).

The next nine destinations, with expenditures between $25 million and $100 million, accounted for 23 percent of total cruise tourism spending — ranging from $30.3 million in the British Virgin Islands to $70.6 million in St. Kitts-Nevis. In addition to St. Kitts, Aruba ($63.7 million), Turks & Caicos ($60.6 million) and Barbados ($53.7 million) all had total cruise tourism expenditures exceeding $50 million.

Yet the Caribbean’s share of the global cruise market is gradually shrinking. Industry statistics show that in 2010, 41 percent of all cruise itineraries were to Caribbean destinations. By 2011, it had fallen to 39 percent, and in 2012, the Caribbean’s share had declined further, to 37 percent.

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