Speaking recently in New York, Jamaica’s Tourism Minister, Edmund Bartlett, could not have been clearer. Tourism, he said, as presently structured in the Caribbean needs to change if it is to deliver greater economic value, increase growth and better support for those who work in the industry.
Addressing a Caribbean Tourism Organisation (CTO) Council of Tourism Ministers meeting, he told colleagues that the region’s thinking must change if it is to capture the benefits of the 4-5 per cent annual growth forecast for tourism globally over the next few years.
To extract the maximum value, he stressed, would require the region to think in new ways about the industry’s future development, its offering, and the changing global market demand especially among millennials. The Caribbean, he suggested, needed to develop a multi-dimensional collaborative response to ensure sustainability and the retention of value within the region.
“As a region we need to recognise the indispensability of the tourism industry to economic development in the region and act to consolidate and increase shares of the global market,” he said.
Minister Bartlett’s call to rethink the Caribbean tourism model is long overdue. In an industry that tends to sit back in times of plenty and reap the rewards, his remarks suggest that at least Jamaica and a few thoughtful souls elsewhere in the industry recognise that the structural changes taking place globally in tourism raise questions about the long term social and economic value the industry brings.
Tourism is increasingly a price-based commodity, benefitting mainly those who own its ‘hardware’: hotels, the airlines and cruise ships, and the industry’s multifaceted marketing operations that determine its supply. Economic globalisation is leading this part of the industry towards consolidation, resulting in a sector increasingly dominated by a very few powerful brands, and the homogenisation of the product within specific price categories. The consequence is that before long what is on offer in the Caribbean and elsewhere will become hard to differentiate with the owners of the ‘hardware’ offering similar experiences in all warm-water destinations, whether they be in the Maldives, Fiji, Barbados or the Dominican Republic.
This suggests that the unless the Caribbean – the owner, as it were, of the ‘software,’ – can successfully differentiate itself, it will find it increasingly difficult to grow the value, own or retain its share of the global market.
Up to now the response of Governments to capturing value has largely been to stimulate the supply side of the industry and by extension the number of visitor arrivals. This has involved encouraging ever larger foreign investments in up-scale resorts – Baha Mar in the Bahamas is a good example – incentivising new airlift to open new source markets, finding new ways to encourage cruise ships calls, and through the provision of extensive marketing support. It is an approach Governments have been able to justify because it enables them to tax an ever-larger numbers of arriving visitors.
Unfortunately, it is a strategy that has done little to address the pitiably low level of retention of the tourism dollar within the Caribbean economy.
Recent research indicates that of each tourism dollar spent within the region just US$0.15 cents at the low end and US$0.40 cents at the high end remains, meaning that tourism consumption by visitors continues to vastly outpace local production, with host countries failing to absorb and benefit from the domestic demand it could create.
This cannot be right. Tourism in the Caribbean should be harnessed in such a way that it becomes less about numbers and more about delivering lasting nation-wide social and economic growth. That is to say, be of greater benefit to the small and medium-size businesses and individuals who make up 80% of the industry in the region; result in genuine human resource development; enable many more Caribbean people to graduate to management positions; and be encouraged to promote an authentic national identity in all that it offers to visitors.
Thankfully Minister Bartlett and several of the regions more thoughtful industry professionals now recognise that if the region is unable any longer to control the hardware, the supply side of the industry, its future emphasis must be on securing control the supply side or the software.
It is a form of economic nationalism that recognises that in the face of globalisation, small nations need to retain and find ways of leveraging their identity to the long-term value of their own people.
In practical terms this means the region must now work to determine how to obtain the maximum social benefit from the sector, and capture more of the tourism dollar though much greater economic integration. It suggests that tourism must find ways to ensure that Caribbean’s cultural uniqueness is infused into all that is offered to visitors.
David Jessop is a consultant to the Caribbean Council and can be contacted at email@example.com
Previous columns can be found at www.caribbean-council.org
13th June 2018
The views and opinions expressed in the Business of Tourism are those of the author and do not necessarily reflect those of The Caribbean Council.