CARIBBEAN: Tourism Industry Under Threat

Tourism industry under threat
Web Posted - Thu Mar 13 2003

CARIBBEAN tourism is bracing for international conflict and its associated 
hardship, as the Bush administration presses for war with Iraq. 
Considering this region’s dependence on the outside world for tourists, oil 
and other trade, and the lingering hangover from the economic fallout of the 
attacks of 9/11, most commentators believe that Caribbean economies will 
suffer significantly if the looming war becomes a reality. 

“The context is already a bad one,” Anthony Gonzalves, director of the 
Institute of International Relations at the University of the West Indies, 
recently commented. “If you impose a war on the current situation, you’ll see 
how much worse it can get.” 

Caribbean governments are attempting to cushion the anticipated fallout by 
seeking price guarantees on oil and developing plans to boost travel 
promotion, but their ability to cushion the impact may be limited. 

“No one believes this war would be good for business,” said Jean Holder, 
secretary-general of the Caribbean Tourism Organisation. “We pray that it 
doesn’t break out.” 

This region is, however, accustomed to buffeting by outside forces. Tourism 
has yet to recover fully from the terrorist attacks in the United States, 
whilst he flow of oil from Venezuela remains uncertain. 

The European Community is phasing out preferential prices for bananas and 
sugar. The offshore banking and insurance industry remain under pressure from 
international organisations. 

Tourism, however, has the most to lose, as a US attack on Iraq would strike 
directly at the Caribbean’s largest industry. As many as 20 million visitors 
– more than half of them from the United States – pump billions of dollars 
into the region annually. That trade, which employs as much as three-quarters 
of the workforce on some islands, is still recovering from a ten per cent 
drop in arrivals since September 11, 2001. 

“If there’s a war, people don’t go on holidays,” Edward Carrington, 
secretary-general of the Caribbean Community, said last month. 

During the 1991 Persian Gulf War, tourist visits to some islands fell by as 
much as 30 per cent. Simon Suarez, president of the Caribbean Hotel 
Association, said a similar experience now would be “a terrific blow.” 

“There are quite clear signs of recovery, but that could come to a sudden 
stop if this war actually goes and if it lasts a long time,” said Suarez, an 
executive with Coral Hotels and Resorts in the Dominican Republic. 

“The long-term effect will be that there will be a gap in the growth 
pattern.” 

Holder said the impact might not be as negative as feared. In 1991, some 
American vacationers who would otherwise have gone overseas to Europe, 
visited the Caribbean instead. After the war, the region recovered more 
quickly than other parts of the world. 

Still, Holder said, any additional decline would further burden the 
struggling airline industry. United and US Airways already have declared 
bankruptcy, and analysts have speculated American Airlines – the leading 
carrier to the Caribbean – could follow suit. 

Reliance on fuel imports makes the Caribbean vulnerable to oil price hikes. 
The recent reduction in flow from Venezuela during the general strike against 
the government of President Hugo Chavez, sparked walkouts by transportation 
workers in Guyana and Haiti, and raised consumer prices on several islands. 

Oil-producing Trinidad and Tobago already told its neighbours it would not be 
able to hold prices to a “pre-Iraq war” level, should hostilities commence. 

The nation imports half the petroleum it refines, and so is also vulnerable 
to world price fluctuations. 

“Our willingness to empathise is not supported by the realities of our own 
situation,” Prime Minister Patrick Manning said. 

War plans are affecting the US territories in another way. In Puerto Rico and 
the US Virgin Islands, thousands of Army reservists and National Guardsmen 
are answering the call to service; in the case of Puerto Rico, those numbers 
are the largest in island history. While troops train with weapons and gas 
masks, the government has opened several family- support centres. 

At the governmental level, the region’s leaders – with the exception of 
Cuba’s Fidel Castro – have sounded a more measured ambivalence. 

In a communiqué last month, the heads of the Caribbean Community bloc of 15 
nations called on the United States to exercise restraint while urging Iraq 
to co-operate fully with weapons inspectors. 

“These islands are economically dependent on the United States,” said Ralph 
Premdas, a professor of public policy at the University of the West Indies. 
“I don’t think you’re going to find any place except for Cuba officially 
coming out against the war.” 

Instead, leaders are preparing contingency plans. In Puerto Rico, for 
example, the government has pre-purchased ten million barrels of petroleum at 
a fixed price, and invested in hedges – insurance to protect against 
fluctuations in fuel prices – for 2.7 million barrels more. The US 
commonwealth has set aside $3.5 million for additional tourist promotion. 

The Caribbean Hotel Association has advised members on public relations 
messages – promoting, for example, perceptions of the region as safe and 
affordable – while urging them to establish more flexible cancellation 
policies for travellers stranded by events. 


SOURCE: Barbados Advocate