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An Opportunity To Advance Caribbean Thinking About Tourism

By David Jessop

News Americas, LONDON,
England, Fri. Oct. 25, 2019:
A few days ago, the
Caribbean Tourism Organization, (CTO), announced that it is to restructure its
operations in the face of rising costs and the need to “elevate tourism
development in the region.”

Its chairman, the
Minister of Tourism of St Lucia, Dominic Fedee, said that CTO would be closing
its London and New York offices by the end of January 2020 and would undertake
a comprehensive audit of the role of its head office in Barbados; a process
that could well involve further redundancies.

Although one has
to feel particularly sorry for its outstanding professional leadership and
staff in London and New York, the restructuring is expected to significantly
reduce CTO’s operational expenditure, giving it greater capacity to focus on
the functions that Minister Fedee and others involved have identified. It is a
change that is much needed.

It is no secret
that CTO has struggled to ensure that its funding arrived on time, that some
key governments preferred to limit their engagement to the areas where they
felt the organization added value, and that it has at times has been
disinclined to engage in a constructive relationship with its private sector
counterpart.

In an emailed
statement, Mr. Fedee said that in future the public sector institution which
groups Caribbean tourism ministers and some corporate interests, would have to
reinvent and reposition itself “as a pillar upon which tourism advancement can
rest.”

This he suggested
would require CTO to refocus on marketing the Caribbean as a single brand,
in-depth research, a more uniform approach to policy formulation and product
development, and on tourism as a tool for sustainable development.

For
complex historic reasons, CTO has a role that is unusual, mixing politics,
policy development, functional objectives from statistics collection and
analysis, to activities that cross over with those of the private sector.

It has previously
done good work on marketing, made strenuous efforts in Washington lobbying
Congress and multilateral institutions, succeeded in its activities in London
on the UK’s Air Passenger Duty, engaged with the European Commission, and been
involved in a positive way with many other initiatives including at times
industry-critical dialogue with external commercial partners.

However, all
institutions need to adapt and refocus.

CTO’s proposed
restructuring offers the opportunity for Caribbean governments and the industry
to consider what they want delivered by tourism’s various component entities
and how at a policy level an effective, stronger, coordinated voice might be
achieved on key issues.

Minister Fedee’s
announcement comes at a time when the industry and consumer demand is changing
and there is a growing understanding of the broader role the sector might play
in Caribbean social and economic development. CTO’s restructuring also occurs
just as international financial institutions and development partners such as
the European Union are prepared to support responses involving sectoral
initiatives.

While CTO is an
institution of CARICOM and the Prime Minister of the Bahamas is the quasi
Cabinet member for the sector, many find it inexplicable that Caribbean Heads
appear to dedicate so little time to discussing the state of Caribbean tourism
or its potential to drive growth and change.

This suggests that
there is much more to be done jointly by Tourism Ministers to move forward the
sector’s priority policy concerns.

As CTO
rationalises its core objectives, it has a unique opportunity to strengthen its
role as the political voice of the industry that now dominates most Caribbean
economies: one that creates on average 40% of the Caribbean’s GDP, earnt the
region US$62bn in 2018, employs about one in 11 of the region’s citizens, and
has the capacity to transfer to the region a significant part of the disposable
income of travelers from more economically advanced nations.

As recent
developments indicate, the industry is not short of problems that require
joined up solutions whether they relate to the high cost of energy, security,
airlift or sargassum.

Statistics suggest
that despite the Caribbean continuing to experience buoyant visitor arrivals
numbers, the industry in the region may not, this year, experience a
commensurate overall rise in earnings, and could begin to suffer if as some
international financial institutions forecast, changing US trade policy results
in a global economic slowdown.

According to the
industry analysts STR (formerly known as Smith Travel Research) this year
Caribbean hotels have experienced a decline in available room (RevPAR), a key
industry measure of profitability, and a fall in occupancy rates, possibly
signaling longer-term economic problems.

STR said that
while hoteliers continued to increase the average daily rate (ADR) charged,
this was not enough to drive RevPAR and thus profitability upwards. It forecast
that 2019 will end with a 1.1% increase in ADR and a 0.3% rise in RevPAR over
2018, but a slight decrease in hotel occupancy of minus 0.8%.

This is the type
of data which CTO needs to do more to develop and apply to regional tourism
policy if weaknesses are to be addressed and tourism is to become a sustainable
force for economic development.

A revitalized CTO
could also support a serious debate about future growth: one that does not
avoid difficult questions relating to longer term strategies on cruise tourism,
aviation taxation, chain hotels, changing consumer requirements and who pays
and benefits from the cost of marketing.

Well considered,
change in in CTO could be a force for regional good, especially if its research
and future actions encourage all Caribbean ministers and Prime Minister to
respond more positively when tourism touches their portfolio.

Minister Fedee and his fellow tourism ministers will have done the region and its external partners a great service if a renewed CTO working closely with its private sector counterparts can share and deliver a new public a vision of tourism’s future role.  
David- Jessop

EDITOR’S NOTE: David Jessop is a consultant to the Caribbean Council and can be contacted at david.jessop@caribbean-council.org. Previous columns can be found at www.caribbean-council.org.

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