History

The second largest of the Windward Islands, St. Lucia lies 90 miles north of Barbados, between St. Vincent and Martinique, and covers an area of 238 square miles. Of volcanic origin, the island is traversed by a forested mountain range running from the north to the south, home to the world’s most accessible volcano, as well as the famous Piton peaks. 

Inhabited by the Caribs, early attempts at settlement met with limited success, and it was not until the 17th century that the first successful colony was established. The next two hundred years proved turbulent for this island which changed hands 14 times between the French and the English. Known as Iouanalao by the Caribs, Santa Lucia by the Spanish, Ste. Lucie by the French, the name St. Lucia, was adopted by the English when the island became a British colony in 1814, through the Treaty of Paris.

Economy

Like many of its Caribbean neighbours, St. Lucia’s economy developed from a dependence on agricultural exports including indigo, coffee, tobacco, sugar and bananas, and it was not until the 1960s that tourism became a player in the economic arena. The collapse of the world sugar market in 1956 pushed the banana industry into the forefront of agricultural exports, and by 1964 bananas comprised 85 percent value of all exports. Concurrently, the advent of jet charter tours, and the conversion of the former US Air Force base to Hewanorra International Airport, signalled the start of the tourist boom. By the beginning of the 1990s, tourism was the fastest growing sector of the economy, and the second largest contributor to the economy.

Source: Caribbean Tourism Organization

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Hotel performance

In 1964, two hotels with a total of 20 rooms made up the accommodation sector in St. Lucia. Rapid expansion over the next decade saw an increase in hotel rooms to 1,000, and today, there are over 3,800 hotel rooms on the island. This expansion has been fuelled primarily by generous tax concessions and incentives by the government, aimed at encouraging investment in the hotel sector. The presence of a large number of regionally and internationally branded properties, including Hilton, Sandals, Club Med and the recently opened Hyatt, bodes well for continued investment in the hotel sector. Rosewood plan to open L’Avanbleu, a 128 bungalow-styled property in Spring 2001, and Radisson is rumoured to be in talks to redevelop a locally owned property. Despite the increases in room stock, hotel performance continues to improve, with hotels enjoying 81 percent occupancy and an average rate of US$319.23 in the first half of the year, an increase of 19 percent in revenue per available room (RevPar) over 1999.

Source: Arthur Andersen Hotel Industry Benchmark Survey

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The outlook for the tourism industry is positive, and by all accounts will continue to thrive. This strong performance comes at a critical time for the government, with the future of the banana industry, formerly the mainstay of the economy, tenuous at best. According to Mr. Rodinald Sooma, Executive Vice-President of the St. Lucia Hotel and Tourism Association, the main thrust at this juncture is for the private sector to maintain an active partnership with the government to ensure that tourism continues to play its vital role as the lead economic sector, providing markets and income-earning opportunities for many more St. Lucians, including persons in rural communities whose livelihoods are being affected by the decline in the banana industry.

© 2000 Arthur Andersen
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