Increasing tourism market share

Tourists

By Tony Fraser 

For the Caribbean tourism industry to take a larger chunk out of world tourism arrivals (a necessity for continued survival and growth), there are a few innovative options lapping at the shores of tourism economies in the Caribbean. 
 
To achieve the objective in an industry which provides hundreds of thousands of jobs in the Caribbean and US$30bn in revenue in 2014, wide-ranging options were presented to governments, hoteliers, tour operators and others in the business at the State of the Industry Conference (SOTIC) of the Caribbean Tourism Organisation in Curacao.
 
Eastern focus
 
Among the options, officials looked at the following:
 
  • how to attract more visitors from the fast-growing Chinese market;
  • how to cast aside traditional and moral restrictions that could pose barriers to the US$100bn US market of lesbians, gays, bisexuals and transsexuals (LGBT);
  • how to engage the Millennial generation (those born between 1980-1998) in exciting weekend package tours around the Caribbean;
  • how to tackle the issue of damaging high tax rates on the airline industry while looking to expand the Open Skies policy;
  • and the need to sweep away the layers of travel restrictions on passengers (including Caribbean nationals) wanting to move around and into the region with one-stop visa and security checks.  
 
Increasing but...
 
An examination of the figures on visitor arrivals shows that the number of tourists coming to the Caribbean in the first six months of 2015 increased by 5.8% compared with the same period in 2014.
 
That percentage increase was larger than the 4.1% average increase in global tourism arrivals. 
 
Significantly too, the Caribbean region (which encompasses the English, Dutch, French and Spanish-speaking areas of the Caribbean) in 2014 earned US$30bn, a 10% increase over the previous year. 
 
However, Caribbean tourism’s share of the international market, as calculated by the United Nations World Tourism Organisation, was a mere 2.8% of the 1.1 billion people who travelled to destinations all over the globe.
 
“The Caribbean has a relatively low global market share compared to the importance it places on its tourism economy,” the UN World Tourism Council’s director/executive secretary of member relations, Carlos Vogeler, told the SOTIC in Curacao.    
 
Asia focus
 
But while the Caribbean’s share of the international tourism market is quite small, South East Asia (SEA) has experienced the largest growth as a region. 
 
The reason is not too difficult to assess.
 
“Those countries have access to a nearby source market, China, whose outbound travel market grew by 30% last year, and by 48% during the first six months of this year,” Mr Vogeler told Caribbean Intelligence©.  
 
At the same time that the SEA countries have the emerging Chinese market from which to source tourists, Mr Vogeler says the source markets of the Caribbean for tourists are mature.
 
He said that the Caribbean tourism industry had to take up the challenge of attracting tourists from the Far East. 
 
Cut taxes
 
Another challenge is for governments and airports in the Caribbean to reduce taxes on airline tickets.
 
It is a call that has been made for many years
 
It was made even while the Caribbean tourism industry was petitioning the United Kingdom to reduce the Air Passenger Duty for passengers flying to Caribbean destinations.
 
In the Caribbean, airlines and tourism experts have continuously pointed to the negative impact that continued high taxes on airline tickets and airport taxes have had on travel into and around the region.
 
However, governments have contended with equal vigour that since they have a narrow tax base to raise revenue for development, and with airline travel being a captive source of revenue, reducing taxes on airline travel and airport duties is a difficult proposition.
 
The Premier of the Turks and Caicos Islands, Dr Rufus Ewing, told the CTO conference that “If you want governments to remove and or reduce those taxes, then we have to know how we are going to get alternative revenues; how do we take care of our security responsibility when there is one visa system and security check at airports. And those are real concerns for us in these countries.”
 
The proof of the pudding is in the eating for Robin Hayes, JetBlue’s president and chief executive. 
 
“Where we have been able to reduce fares by 30%, we have doubled the travel market,” he says.
 
And Mr Hayes commended the government of Barbados, which has “one of the lowest tax rates in the region”.
 
“The idea is that we can collectively look at ministers of finance and ask them to relook the tax argument; but we do need government revenue to run countries,” Barbados Tourism and International Transport Minister Richard Sealey told Caribbean Intelligence©.
 
 
Lounge Pas
 
New ways of working
 
JetBlue sealed a deal with Barbados at the conference announcing an additional daily roundtrip flight between Fort Lauderdale in the US and Grantley Adams Airport in Barbados.  
 
What’s more, the JetBlue boss is encouraging the Caribbean tourism industry to tap into JetBlue Getaways, which packages hotels, tours, restaurants and other experiences into the flight package, an arrangement that he says has done wonders for Grenada.
 
“Thanks to strong bookings through Getaways and greats friendships with local properties like Sandals and Spice Island, we were able to add a third weekly service in September, after only three months in the market,” Mr Hayes said.
 
Another option for attracting more tourists to Caribbean shores and into hotel rooms is to give seat guarantees to airlines. 
 
Under such agreements, the host government pays for seats not occupied by passengers when they fly into those destinations.
 
Barbados’s Mr Sealey, who is also CTO chairman, told Caribbean Intelligence©: “It is a fact that we do subsidise airlines to the region, but we prefer to have a commercial relationship with the airlines, ones like that with we have with JetBlue, which works with us to market the destination.”
 
Potential earners
 
On the intra-Caribbean travel routes there was 5.5% growth, with 400,000 travellers moving around the region during the first six months of 2015.   
 
Liat’s chief executive, David Evans, told Caribbean Intelligence© “It’s a market with quite an amount of potential.” 
 
He said that Liat had upgraded its fleet over the last two years. But as he explained, taxes can cost the traveller up to 40% to 50% of the airline ticket.  
 
Partnerships with other regionally-based airlines to achieve greater efficiency and coverage of the Caribbean are coming, Mr Evans told Caribbean Intelligence©
 
“While we cannot talk about those alliances right now, they are coming soon,” he said.
 
He said that, at the moment, Liat has strategic alliances with international carriers such as British Airways and Virgin and others to move passengers around the region from their international arrivals but the internal partnerships are long overdue.
 
The LGBT market
 
Facilitating travel into the region by members of the lesbian, gay, bisexual and transsexual (LGBT) community is an option for the Caribbean to increase its international market share.     
 
However, it is an option that poses challenges to the church-going, Bible-believing Caribbean community.
 
The market is a lucrative one, says David Paisley, senior research director of the San Francisco-based travel agency Community Marketing Insights.  
 
“The Caribbean is a perfect fit for LBGT travel; but our clients must be assured of safety and not be discriminated against, and not only by laws but by social practices,” Mr Paisley said.   
 
His research shows that the LGBT community travels more than the general population; they spend more on hotels, restaurants and shopping than other tourists. 
 
“We have heard of homophobic societies in the Caribbean and I don’t want to call names, but where we see those tendencies and feel threatened, our travellers will not be coming,” Paisley told Caribbean Intelligence©.   
 
There have been a few incidents in the past with members of the LGBT community that have caused a measure of concern in one or two Caribbean countries.
 
CTO Secretary General Hugh Riley told Caribbean Intelligence© that “no business can afford to ignore a significant market segment”.  
 
He added: “Our [the CTO’s] responsibility is always to source the expertise, present the facts and provide enough information on which our members can make an informed decision.”
 
Weekend packages
 
Short breaks packed with entertainment, aimed at the generation born between 1980 and 1998, are seen by Leah Marville of My Destination Arrivals as yet another option to land more tourists around the region.  
 
The weekends consist of a blur of entertainment and experiences which can be captured on camera and become talking points for the travellers, who travel at weekends and head back to their jobs on Monday.
 
“There is something absolutely captivating about us… My Destination Weekends seeks to capture and immortalise experiences for those who take the trip,” says Ms Marville, a model and businesswoman.
   
But increasing numbers of arrivals is not the be all and end all.
 
Mr Sealey says the benefits of tourism must be counted in jobs, in the development of communities, the protection of the environment and the retention of a large chunk of what the tourists spend in getting to the Caribbean and having memorable vacations in the region.
 
 
 
 
 
 
 
 

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