by CHERYL HAREWOOD in PORT-OF-SPAIN

TOURISM CAPITAL INVESTMENT in the region last year has been estimated at US$9.4 billion, representing 19.9 per cent of total regional investment.

In addition, the Caribbean welcomed 22.5 million stop-over visitors in 2007, a 1.5 per cent increase over 2006.

According to KPMG's Fourth Annual Regional Banking Survey, and statistics released by the Caribbean Tourism Organisation and the World Travel and Tourism Council (WTTC) at the Caribbean Hotel and Tourism Investment Conference (CHTIC) currently taking place in Trinidad, visitor expenditure in the region peaked at US$27 billion, a six per cent increase over that for 2006.

And even with an increase in oil and food prices and a possible recession in the United States, most financiers and investors are optimistic that the Caribbean will stand its ground throughout the remainder of 2008 and beyond.

In the report, released by Simon Townend, a partner in KPMG, the WTTC indicated "there is expected to be a 3.3 per cent annum growth of travel and tourism demand in the Caribbean in real terms for the period 2008-2017".

Presently 138 tourism related projects representing a total of 32 953 rooms are under construction in the region, the report indicated.

Townend told delegates at CHTIC that senior commercial lending decision-makers and developers who finance and invest in the Caribbean felt confident in the resilience of the regional tourism industry despite seemingly global economic downturns.

The report showed that some of the positive sentiments by lenders included the presence and construction of world class flagged accommodation such as Ritz Carlton and Aman Resorts within the region.

It further indicated that developers were more bullish than banks with respect to their outlook for regional tourism over the next year. Half of the regional lenders surveyed indicated their credit policies remain unchanged, while just under a quarter of those surveyed had become more conservative, with stricter adherence to standard credit guidelines and greater pre-sale requirements.

The survey also revealed a likely increase in interest rate spreads and a slight tightening of lending ratios.

Those countries earmarked with the most significant growth potential during the coming years were St Lucia, Anguilla and Jamaica, given their ability to attract attract European travellers, offer diversified economies and provide good airlift. The Dominican Repuboic was also considered to have high-growth potential.

More than half the financiers surveyed noted that while the region "will hold its own", Central America posed the greatest competitive threat to regional tourism because of its lower costs, perceived lower crime rate and strong airlift capabilities.

Almost all the financiers agreed that rising oil prices would increase the cost of operations and travel to the region, making the Caribbean a more expensive destination.

Ninety per cent of those surveyed predicted that an increase in European tourists would result in the Euro strengthening against the US dollar as the Caribbean became a more competitively priced destination for European travellers.

Financiers also expect this will attract additional investment from Europe, as hoteliers brace themselves for a greater slice of this market.