Presentation by the Caribbean Hotel Association
to the 25th Regular
Meeting of the Conference of Heads of Government
Caribbean Community (CARICOM)
July 5, 2004
The Caribbean Hotel Association is pleased to have this very brief opportunity
to update the Heads of Government of CARICOM on the Caribbean tourism industry
and in particular, the results of the just released WTTC study.
The need for such a study was recommended at the COFAP meeting in Dominica
in September 2002. The study, commissioned by CHA and carried out by the
World Travel and Tourism Council, is the first ever study on the impact
of travel and tourism on the economy and jobs in the Caribbean. It provides
a series of policy recommendations to maximize the industry’s impact on
individual economies and the Caribbean as a whole. The study uses the standards
developed by the United Nations Statistics Commission under the Tourism
Satellite Accounting model.
As Mr. David Jessop, of the Caribbean Council, has indicated in his
newsletter “The Week in Europe”, it is felt that traditional “public sector
analysis overlooks or understates the true impact of the industry by dealing
only with individual components.” The Satellite Accounting model encompasses
economic information across the full tourism product service chain. Mr.
Jessop goes on to point out that Satellite Accounting “sets out to understand
the linkages between travel & tourism and other sectors of the economy,
including agriculture and manufacturing. It takes-in the effect that the
industry has on stimulating domestic production, employment, human resource
development and a wide range of other economic factors, including trade
balances and infrastructure development.”
The research took place in the spring of 2004 and included 18 focus
groups totaling more that 100 participants from 96 public and private sector
organizations representing the full scale of socioeconomic interests. We
have engaged trade unions, taxicab associations, craft vendors associations,
cruises, on-island tours and attractions, among others.
The research clearly shows the economic intensity of Travel & Tourism
in the Caribbean, and laments the little awareness and understanding of
the industry’s contribution and how it permeates the general economy and
overall fabric of Caribbean society.
The report states “linking Travel & Tourism to the rest of the economy
is not rocket science”. It can be done and we have been talking about it
for the last 30 years. Our challenge however lies in the implementation,
execution, and organized dedicated resources by each country to guarantee
accomplishment with proper follow through.
A copy of the study has already been sent to each CARICOM Head and I
would like to mention a few of the highlights contained in the study:
Travel and tourism will be an enormous catalyst for future economic and
social development in the Caribbean and has the potential to be a major
player in the alleviation of poverty.
In 2004, Travel and Tourism is expected to contribute 14.8% of the Caribbean’s
GDP and account for 2.4 million jobs, directly and indirectly. Over
the next ten years, this sector is forecasted to contribute 16.5% of GDP
and account for 3.2 million direct and indirect jobs.
The impact of the industry, however, is generally not understood by public
officials, the industry itself, or the communities where it takes place.
This lack of understanding accounts for generally inadequate policy responses
on the part of Governments and lost opportunities on the part of civil
society and private enterprise. An industrial campaign to ensure all stakeholders
recognize Travel and Tourism’s full impact across national economies is
Long term planning at both the national and regional level is a pre-requisite
for generating investor confidence. CHA and CTO should convene a Caribbean
Tourism Congress that will be responsible for establishing and maintaining
a regional strategic plan for the Caribbean. The Congress should include
the most senior and influential private sector leaders along with the Ministers
and Directors of Tourism representing the broadest possible range of industry
sectors and tourism destinations. We can no longer rely on spontaneous
ad-hoc development. We say it’s time to take stock and make travel and
tourism a strategic economic priority.
A dedicated effort and resources must be organized by each Caribbean Government
to enable the Ministry of Tourism to guarantee a focused approach to establishing
effective linkages between travel and tourism and the rest of the economy.
Because of the fundamental importance of tourism to the economies of almost
all Caribbean countries and the well being of their people, it is crucial
to put in place an investment strategy that will encourage growth in the
tourism sector. An integral part of this strategy is to examine the availability
of financing and access to equity and risk capital, especially for the
small hotels and other sectors such as tour companies, restaurants and
attractions. CHA has taken a first step by promoting the launching
of a Tourism Investment Fund to harness resources for this purpose. The
British Government has committed to provide us with financing for the development
of a prospectus for the Fund, and other regional and multilateral financial
institutions have shown interest in the venture.
There is a need for the creation of a viable Caribbean air transport system
to supplement the services being provided by the external carriers and
to guarantee the sustainability of air transport to the region. On this
point, Mr. Jean Claude Baumgarten has said, “When the stars are aligned,
Caribbean airlift matches Caribbean tourism. When they are not aligned,
Caribbean tourism can suffer. We need to manage our destiny, because no
one will do it for us.”
The tourism sector is perceived as an attractive tax target for governments.
In addition to taxes imposed by Caribbean governments, tourists are often
faced with an array of travel related taxes that are now arguably the fastest
growing area of travel related costs. This makes it even more important
that taxes that are applied to the industry are equitable and where possible,
hypothecated. One of the most contentious issues in the region is the inequitable
treatment of land based tourists compared with cruise passengers. The former
pay significant departure taxes while the latter pay a token port charge,
The regional authorities, public and private sector, should undertake to
develop and agree on a regional cruise line strategy that addresses the
multitude of issues of concern to the industry. Consideration should be
given to the creation of a treaty based Caribbean Cruise Policy Commission
to be charged with development and implementation of the regional strategy.
CHA believes that the integration of the cruise industry into the mainstream
Caribbean travel & tourism should be a central objective.
The WTTC report quantifies the impact of travel and tourism on individual
economies as well as the region and I encourage you to examine this document
with your Cabinets in order that it may have the intended impact.
In other developments, I must advise you that CHA, CTO and the FCCA held
a joint meeting to identify areas of cooperation and to establish a more
constructive working relationship. In addition, the Directors of Marketing
of CHA and CTO have also had meetings with CLIA, the marketing arm of the
cruise lines, and they have exchanged information in an effort to identify
areas of joint marketing cooperation and a pooling of resources.
The study makes many other practical observations in the area of regional
and national marketing, environmental management and stewardship, safety
and security, health provisions, including HIV/AIDS, for which the Travel
and Tourism industry assumes its social responsibility.
In the area of trade, the ongoing international trade negotiations and
the treatment of tourism within the regional services market are of critical
importance to the future development of the tourism industry. CHA has submitted
its recommendations in regards to the tourism industry to the Regional
Negotiating Machinery and we are disappointed to learn that tourism issues
were not on the agenda for the just concluded COTED meeting held on July
2. Trade negotiations are critical in terms of increasing the competitiveness
of the Caribbean tourism industry. Our recommendations include among others,
such areas as using trade negotiations to attract increased foreign investment
by enhancing stability and predictability for investors, enhancing Mode
4 market access, and lowering the cost of tourism inputs of both goods
and services. A copy of CHA’s position paper on this subject has been submitted
On a related subject, CHA supports the introduction of the Caribbean
Single Market Economy scheme, by January 2005, and we commit our full and
meaningful participation in this historic initiative. However, there is
scarcity of information about the benefits and opportunities of CSME and
CHA would like to request that seminars are provided to educate and engage
the Travel and Tourism industry in this initiative. Caribbean tourism
arrivals increased by 7.0% in 2003 and this positive trend is continuing
through 2004. However there can be no room for complacency. The need to
maintain the current tourism growth for the long term with sustainable
funding, and more importantly, to overcome the serious deficiencies that
were having a negative impact on our industry prior to 9/11, and still
continue to do so, is of paramount importance and urgency. Consider the
We would like to recognize and compliment the Caribbean Governments that
have embraced this industry and to encourage other governments to follow
their example. Many governments have spent time, efforts and resources
to study the issues and formulate recommendations and plans about various
aspects of the policy agenda and are head and shoulders above the rest,
who continue to bury their heads in their sandy beaches as if tourism does
Based on CTO figures for 2003, there were 5.27 million visitors arrivals
to CARICOM states with an estimated expenditure of $5.5 billion.
CHA represents 816 hotels in the Caribbean, of which an ample majority
is in CARICOM and associate member states.
Tourism is the major economic engine in 97% of the CARICOM states and the
major provider of jobs.
It would be remiss of me not to use some of these precious minutes to
speak on behalf of our fraternity of regional tourism interests.
Honourable Presidents, Prime Ministers and Leaders, we are firm in our
commitment to establish lasting strategic partnerships with all public
sector agencies and regional institutions, and believe that this commitment
can only be truly meaningful if the tourism industry has your full political
support. Considering my presentation today; and armed with information
already in your possession from your own national Ministries of Finance
& Central Statistical Offices; and now with the results of this WTTC
study on tourism’s impact on jobs and on the economies of 23 Caribbean
countries, I implore you to consider our request for an Annual Tourism
Congress with all Heads of Government, Ministers and Directors of Tourism,
and private sector leaders, to discuss and consider key policy recommendations
and actions to advance our mutual interest in tourism.
The last tourism summit was held in 2001 which followed the previous
tourism summit held ten years earlier in 1991. This industry, which is
so vital to the future economic development of the Caribbean and welfare
of its people, can not, and should not, wait another 10 years for the next
tourism summit. Let us not give WTTC reason to state in the study that
“the economic benefits of the tourism industry is generally not understood
by public officials, the industry itself, or the communities where it takes
I sincerely trust that our appeal will be heard. Remember that my plea
is the desire of my regional constituency of 816 hotels and 700 Associate
Members, including the most important Caribbean and foreign investors and
chain hotels, who are eager and very much willing to commit to a permanent
forum for policy dialogue with the political leadership of this very heavily
tourism-dependent Caribbean region. In closing, to paraphrase Jeffrey
Lipman, Special Advisor to the World Tourism Organisation, “Hon. Prime
Ministers, what is now needed is a visionary focus on this win-win sector
by all Caribbean islands as a development tool par excellence, and the
political will at the national and institutional level, to put tourism
at the core of policymaking.” I ask for your positive consideration.
July 5, 2004