After the woes of dropping tourism figures throughout the Caribbean that has included us here in the Cayman Islands, there is much optimism that we have seen the worst.

In fact here at iNews Cayman we have almost daily stories and articles of rising numbers of visitors to Cayman and the rest of the Caribbean in the latter quarter of 2013.

But we should not hide our heads in the sand as all is not well from some of our key markets for stay over visitors – the United Kingdom (UK), Continental Europe and even Canada.

All three areas have seen continuing less visitors. Although in Canada there was a modest increase (TourMag.com report a 2% rise) in outbound travel from Canada, most of these tourists went south of the border to the USA.

How do we in Cayman market ourselves to Canada?

We have a big problem with attracting tourists to the Caribbean from the UK. George Osborne, the UK’s Chancellor of the Exchequer (Finance Minister) introduced an Air Passenger Duty (APD) in 2011 despite the clear evidence that visitor arrivals into the Caribbean from Britain were already declining – down by 9.6 per cent.

There were representations from the Caribbean about it but it was not a united front from every single country here.

The APD has not gone away but has increased.

The UK Treasury spelt out that for the Caribbean and all other destinations in band C, the tax in economy class will increase from the 2012/13 rate of £81 (US$123) per person to £83 (US$126) from April 1, 2013; and will then rise to £85 (US$129) from April 1, 2014. In Premium Economy or higher classes of travel, the tax moved to £166 (US$252) from April 1 this year to £170 (US$258) after April 1 2014. The increase contrasts with the tax in the lowest band for short haul travel from Britain, band A. This remains unchanged at its present level of £13 (US$19) for 2013 and 2014; in effect affording preferential treatment those who travel within Europe.

And the reason the APD is unlikely to change is the UK’s Office for Budget Responsibility, the independent body that produces statistics on Britain’s economic growth, published alongside the budget, forecasts that suggest that the total APD cash revenue received by the UK Government is expected to rise from £2.8 billion (US$4.26 billion) in 2012-13 to £3.8 billion (US$5.78 billion) by 2017-18.

In an article published in April 7^th 2013 in Stabroek News under the heading “Caribbean needs to adapt its approach on UK air passenger duty” David Jessop writes:

“What is shocking, however, is that it is not as if the UK Treasury, allegedly a friend of the region, does not have independent evidence that the tax is damaging to the Caribbean at a time when most governments in tourism dependent economies are in, or close to default on their debt.

“It is also not as if the Caribbean has not suggested revenue neutral ways in which the tax might be modified.

“Provisional statistics from the Caribbean Tourism Organisation (CTO) for 2012 show that arrivals out of the UK to the region as a whole stood at just 0.9m in 2012 compared with a high in 2007 of 1.4m and contrast with increasing arrivals last year out of the US and other EU feeder markets.

“Surprisingly, there has been little public comment from regional politicians or public figures on the latest increase, despite the fact that the issue is raised in almost every bilateral discussion that takes place between Caribbean governments and the United Kingdom.

“In fact, this most recent APD increase seems to have passed the Caribbean by, leading to negative comments in some parts of the UK travel trade press as to why the Caribbean is not mobilising high profile citizens such as Usain Bolt or Rihanna to draw attention to the damaging effect of the tax on the region.

“What all of this suggests is that the Caribbean needs to adapt its approach: speed up the politicisation of the issue through its army of Caribbean related voters in the UK; continue to multilateralise the issue with a growing number of Commonwealth governments, large and small, that are angry about the tax; continue to diversify the Caribbean’s tourism feeder markets and airlift to countries like Brazil and Russia; and consider proposing alternatives approaches that might be introduced when the UK’s next government next takes office.

To read the whole article go to: http://www.stabroeknews.com/2013/features/sunday/the-view-from-europe/04/07/caribbean-needs-to-adapt-its-approach-on-uk-air-passenger-duty/

There is better news from the rest of Europe with a “glimpse” of recovery.

Industrial production is moving up again and unemployment, while still relatively high in some places, is starting to decline.

These positive signs only recently occurred and have not yet manifested themselves in greater benefits from that market. In fact, arrivals have declined for two consecutive years. However, the outlook is brightened by reports of proposed increased airlift prompted by more than usual forward bookings, says Tour Mag.

The website (www.tourmag.com) states:

The Caribbean has also started to benefit in a significant way from South American arrivals. Countries such as Aruba, Curacao, Dominican Republic, Cuba and Belize have all reported better business from this market.

Direct flights from Brazil to destinations like Jamaica, Barbados and Trinidad and Tobago have boosted arrivals from this market.

OUR FUTURE POTENTIAL

What is our future therefore, given that there are shifts in our source markets…at least that is the immediate picture. As a caution, we will have to keep an eye on our forecast however to determine when the picture will revert.

New and Emerging Source Markets are galloping

When we examine tourism globally, new markets with lots of potential for the Caribbean are clearly emerging from among the BRICS countries (Brazil, Russia, India, China and South Africa). In particular, Brazilians have started to show interest in the Caribbean.

Recent IADB studies have revealed some interesting findings about the potential value of this market. Among other things the research emphasized the need for:

(1)      Intensified communication to heighten awareness of the Caribbean among Brazilians

(2)      strategic marketing

(3)      sourcing of greater airlift

(4)      Brazilian language training

(5)      research of the Brazilian market

IADB has recognized the enormous potential for engaging this new market and has asked CTO to facilitate the process of communicating information relating to IADB funding and technical assistance to Caribbean countries.

An estimated 97 million Chinese travelled internationally last year, around 17% more when compared with 2012 according to UNWTO statistics. They had spent an estimated US$102 billion by September, 12% more than the year before.

Asia and the Pacific region benefitted largely from this source.

The Russians were also very active in 2013 with outbound travelers climbing by 14% with increased spending of nearly 26% by September. Other European countries were the main beneficiaries of this increased traffic and buoyant spending although some Caribbean states are seeing Russian arrivals in increasing numbers.

These arrivals are notably concentrated among Cuba, Dominican Republic and recently Jamaica which actually had its first direct flight from Moscow last year by Transaero airline.

One feature of all the new markets is the strong propensity to boost business in regions in close proximity first and foremost. China and India patronized Asia and the Pacific while Russia fed Europe and especially Eastern Europe.

It seems only natural to foster the Brazilian/Caribbean link in the same manner. Indeed, now seems to be the right time to pursue the South American market with full vigour.

There is a pressing need to investigate all the new markets and emerging markets in a detailed and serious way that provides all the data necessary to inform a successful launch into these markets.

Cruise Activity steady

Itinerary switching in cruise scheduling is evident across the Caribbean. More often than not, this rescheduling intentionally shifts vessels between the Southern and the Northern ports of the Caribbean with something of a zero sum effect on overall arrivals to the region.

Typically this is responsible for cruise arrivals fluctuating widely between destinations over time. Caribbean countries which are more distant from the mainland USA and major home ports suffer most. Consequently in 2013, Grenada recorded a near 22 per cent fall in cruise passenger visits, while Curacao welcomed over 45 per cent more than it did in 2012.

Overall, there was improvement, 2.8% rise, with nearly 22 million cruise passenger visits to the region.

Twice as many destinations recorded increased activity last year when compared to 2012. However, destinations farthest from the US struggle to find more cruise business. Still, our numbers suggest that the summer months of 2013 were the best ever for summer cruising in the Caribbean.

Airlines have been Active

Both legacy and low cost airlines have been very watchful vigilant in the Caribbean chopping and changing to maximize load factors. This environment has raised some uncertainty in many of our destinations.

There is good reason for heightened optimism when anticipating the performance of tourism in the Caribbean this year. Major challenges still exist making it harder for tourism growth to regain the momentum of the years prior to 2009 when the global meltdown started.

It’s generally expected that global economies will perform better in 2014, with the IMF predicting sluggish 1% growth across Europe and 2.8 per cent in the US.

According to the experts the emerging countries are expected to outdo more advanced ones. The demand for travel, therefore, should remain buoyant.

As a result, tourist arrivals to the Caribbean are expected to rise between two and three per cent in 2014 riding on expected improvements in the global market place but more importantly there are strong signs that there will be a further injection of spending to give a much needed boost to the regional economy.

For more go to: http://www.tourmag.com/2014-Tourist-arrivals-to-the-Caribbean-are-expected-to-rise-two-and-three-per-cent_a64993.html

END

Yes there are signs of improvement but I am not rejoicing yet. The competition is fierce and I am waiting to hear from the Cayman Islands Tourist Association what new initiatives they are planning.

And do watch Cuba.

See also story in today’s iNews Cayman “UK Chancellor under pressure to halt tax rise on flights to Caribbean”.