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AS I SEE THINGS: Tourism and Caribbean economies

Brian Francis, [email protected]

AS I SEE THINGS: Tourism and Caribbean economies

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IN RECENT TIMES, there has been quite a buzz in the region about the excellent performances of our various tourism industries and the sorts of economic and financial benefits being derived.

To some extent, the excitement that is being generated is well founded based on the numbers that have been made public.

Indeed, the latest statistics revealed by the Caribbean Tourism Organisation as of May 29, 2015 in relation to stop-over tourist arrivals in 2014 shows major improvements in most countries relative to the previous year. For example, Turks & Caicos Islands recorded a 40.6 per cent increase in tourist arrivals during the January to November period compared to 2013. Other very impressive performances over the January to December period relative to the previous year included Montserrat (22.2 per cent), Grenada (18.4 per cent) and the Cayman Islands and Haiti (both at 10.8 per cent).

To an economist, these statistics ought to raise several questions that are crucial in determining the next phases in the performances of tourism and by extension Caribbean economies in the years ahead.

A logical starting point in this discussion is the question of whether what we are witnessing in the region would eventually translate to an upward trend (continued growth in visitor arrivals) or just an emblematic type of business cycle episode that is habitually characteristic of so many other key macroeconomic variables.

The resolution of this matter directs attention to no other issue than that of international competitiveness as far as tourism is concerned.

You see, irrespective of how it is conceptualised, international competitiveness would continue to remain a dynamic issue. Hence, in as much as our tourism industries may very well appear to be highly competitive at the moment, that situation can quickly reverse itself, rendering many of our destinations uncompetitive in the process.

The challenge in this regard is compounded by the fact that very few of our countries know precisely how they measure in relation to other destinations globally because, unfortunately, data limitations prevent such analysis.

Hence, the 2015 Travel and Tourism Competitiveness Report published by the World Economic Forum addresses the competitiveness of only five regional economies: Barbados, Dominican Republic, Guyana, Jamaica and Trinidad and Tobago.

If, therefore, it is impossible to determine the relative competitiveness of most of our tourism industries, how can we plan effectively to ensure the continued growth of this vital area of economic activity?

A second major area of concern is the extent to which forward and backward linkages are being forced between tourism and other sectors of our economies.

It should be clear to most that our countries have for a long time been focussing on an unbalanced growth strategy with services as the critical driver of socio-economic development.

If the kinds of performances we have recorded in tourism in 2014 are replicated in the years to come, will we see corresponding improvements in output in agriculture and manufacturing for instance?

It is important for tourism to continue to perform exceptionally. Greater activities in tourism must lead directly to improved economic growth throughout the Caribbean. But for that outcome to be realised we must address, inter alia, the international competitiveness of regional tourism and the nexus between this leading industry and supporting sectors like agriculture and manufacturing.