CARIBBEAN TOURISM POLICY WORKSHOP: "Strategic Objectives of the Caribbean in Tourism Development"

CARIBBEAN TOURISM POLICY WORKSHOP
Foreign and Commonwealth Office of the United Kingdom
 
"Strategic Objectives of the Caribbean in Tourism Development"
Introductory Remarks by Simón B. Suárez, President, Caribbean Hotel 
Association
 
The Honorable Bill Rammell, Minister in charge of relations of the United 
Kingdom with the Caribbean; the Honorable Manzoor Nadir, Minister of Trade, 
Industry and Commerce of Guyana; the Honorable Obediah Wilchcombe, Minister 
of Tourism of the Bahamas and Chairman of the Caribbean Tourism Organization; 
Ministers of Government; colleagues and friends,
 
On behalf of the Caribbean Hotel Association (CHA), the 800 odd hotel 
members, 750 allied members and 35 National Hotel Associations in the Greater 
Caribbean that we represent, we are honored to have been invited to be a part 
of this policy workshop on tourism.  We understand this to be the first 
workshop of its kind mounted by any EU government and we compliment the 
organizers for bringing together so many stakeholders from both private and 
public sectors to discuss this critical aspect of the Caribbean's economic 
future and stability.   
 
We hope to be able to demonstrate, along with our public sector partners, the 
immediate and future economic importance of tourism as, in many cases, the 
only means of achieving the necessary economic growth for the continued 
existence and future prosperity of the region.   The Caribbean Hotel 
Association will persist in representing its ability and willingness to act 
as a responsible partner for the sustainable development of tourism, the most 
important industry for the majority of Caribbean economies.  The assistance 
and decided co-operation of the Government of the United Kingdom and the 
European Commission will be critical to help us protect our tourism 
environment, to encourage our efforts in the development of the region's 
human resources and to attract investment to the region.  These are areas of 
development where CHA has been active and effective, either through the 
Caribbean Alliance for Sustainable Tourism (CAST), the Caribbean 
Credentialing program or through the annual investment conference, which has 
now attracted the interest of Proinvest, the EU's investment promotion agency 
under the Cotonou Agreement.
 
Our regional marketing initiatives, albeit modest, are evidence of our 
commitment to play a leading role in ensuring sustainability and prosperity 
for tourism and the communities of the Caribbean and its people. 
 
The opportunities for achieving this challenge are great, but will require 
the concerted effort of all parties  - governments, the private sector and 
international donors - to work together in a responsible and coordinated 
manner.  The very future of tourism depends on us making this a reality. We 
need to ensure that, as with sugar and bananas in the past, tourism is at the 
top of every political agenda in the future when it comes to discussions 
between Governments and multilateral agencies. 
 
We recognize that from a donor and public policy perspective, working with 
tourism is not an easy proposition. The sector's diversity and relatively 
high level of foreign ownership complicates tourism planning at the national 
and regional levels, as well as donor interventions in support of sustainable 
tourism development. Tourism's crosscutting nature also means that trade 
negotiations in a whole range of goods and services sectors will have an 
impact on the industry. But the sectors complexity should not mean that our 
industry is relegated to the bottom of the policy agenda just because it is 
viewed as being "too difficult". Tourism cannot be ignored. The industry's 
impact on the lives and welfare of so many Caribbean citizens is far too 
great for that. The opportunities for our trading partners outside of the 
Caribbean are also a reason to proactively develop tourism.  
 
This seminar's background paper reminds us of the fundamental importance of 
tourism for the Region and for the various economies within it.   The travel 
& tourism sector contributes more to the GDP of the Caribbean than the 
industry contributes proportionally to any other country or region of the 
world
 
The industry is currently expected to increase in the next decade at an 
annualized rate of 5.5% in total travel and tourism demand.  This should take 
the region from a total demand of US$ 34.6 billion to US$ 78.4 billion.  
Direct and indirect employment generated by the industry should grow at 4.7% 
per annum and take us from 1.8 million jobs in 2003 to 2.9 million jobs over 
the next decade.  This is the potential growth of our industry as projected 
by the World Travel and Tourism Council.  It is incumbent upon us with the 
invaluable help from our friends and partners across the Atlantic, to achieve 
this potential.
 
Whilst these figures may seem impressive, the Caribbean tourism sector has 
severe challenges. CHA welcomes the increased engagement of the United 
Kingdom and the European Commission in searching for viable solutions to the 
various challenges we face.  
 
Allow me to highlight some of these challenges from a private sector 
perspective. The high cost of utilities, operating costs, airlift and 
attracting investment, challenge the very survival of the Caribbean Tourism 
product in an increasingly competitive global tourism market place. 
 
It is no secret that many Caribbean destinations are now regarded as high 
cost destinations. As the President of the Caribbean Development Bank (CDB) 
recently stated, "To put it starkly, CARICOM destinations are pricing 
themselves out of the market". CHA proposes that government and the private 
sector - with the support of our partners here  - must urgently look at ways 
of reducing the utility costs for the regional tourism sector. 
 
Creating a climate that provides an acceptable return on investment is also 
critical to the future of Caribbean tourism. A fresh look at how the industry 
is taxed would be a necessary part of the equation.  CHA therefore would like 
to propose a major review of tourism taxation in the Caribbean, particularly 
to take account of our industry's competitiveness compared to other 
destinations and to cruise tourism.  This review must be based on the 
principle that tourism services are an export industry.
 
Another element that undermines return on investment in the region is the 
inadequate availability of capital resources.  CHA is on record in proposing 
the establishment of a Tourism Investment Fund to harness the capital 
resources of the region, lower the costs of funds for development projects 
and act as a conduit for extra-regional resources.  We would like that our 
European partners to join us in analyzing the feasibility of this venture and 
in launching the Fund if it is to be found a feasible endeavour.
 
The issue of cruise tourism and its relationship to land based tourism is 
also of significance. While the recent stellar growth of cruise tourism in 
the Caribbean is welcome, CHA does not believe that this should be at the 
expense of the land-based tourism sector. We therefore fully support the 
current efforts of Caribbean governments to impose a regional and uniform 
US$20 head tax on arriving cruise passengers. This will go some way to 
addressing the competitive imbalance that exists between the cruise and 
land-based tourism sectors.  It is CHA's position that the funds generated 
should be directed to the regional marketing campaign that all destinations 
and all players, will benefit from.  The application of this uniform levy 
must be coupled with measures to improve the integration of the cruise 
industry through a regional cruise policy.
 
Of particular significance to our association is the very survival of the 
small indigenous tourism sector.  Over 65% of our members operate small 
hotels and businesses that find it increasingly difficult to operate in the 
current climate of mergers and vertical integration. It seems that the 
business strategy of the ever-decreasing number of international tour 
operators is to control through ownership of every element of the tourism 
product distribution chain, from the means to market the product in Europe, 
the airline, the hotel in the destination and also the local ancillary 
services. The danger of this is that tourism becomes a closed shop with 
limited participation of Caribbean companies in the tourism experience. To 
respond to this, CHA's smaller members need help in the enhancement of their 
product and its marketing, and in how they can more effectively manage their 
businesses. There are many others who are not affiliated to any national or 
regional entity and therefore have difficulty in expressing their views in a 
coordinated way.  Control of un competitive market practices in the countries 
of origin is also necessary, to diminish this effect 
 
We understand the many responsibilities that Caribbean governments face in 
balancing the books and responding to the many challenges they face in 
serving the social and economic needs that face them. We do however; on 
occasions wonder why it is that so little attention is paid to the many 
opportunities that a vibrant and successful tourism industry could bring.  
Perhaps our industry has not done a very good job in communicating its 
importance and its relevance; perhaps it is the lack of credible and valid 
research to back our arguments.  Greater recognition and understanding by all 
constituents of the economic impact of tourism would be a critical first step 
in indicating its true value as the economic engine of growth and 
sustainability for the majority of Caribbean economies.  CHA, with the 
support of its industry partners is currently working with the World Travel & 
Tourism Council (WTTC) to complete an economic impact study individually and 
collectively on 27 Caribbean countries.  We believe this effort will 
contribute to the necessary recognition of the industry.  The enhancement of 
our capacity to generate more in depth   research primarily focused on 
improving the competitiveness of the sector is a high priority goal for us.  
This enhanced capability, along with the immensely valuable research 
undertaken by CTO will help us all to better understand the tourism sector 
and to make the necessary decisions in ensuring a successful and sustainable 
industry.
 
In spite of the fact that for the greater majority of Caribbean economies, 
tourism is the engine that drives them and is the major provider of jobs, the 
economic importance of tourism has been underestimated in terms of the 
important linkages that can be exploited with other economic sectors that are 
facing challenges within the region.  One of the ways to begin addressing 
this fault is by establishing throughout the Caribbean the WTTC developed 
system of Tourism Satellite Accounting.
 
Whilst we do our best to make sense of the complexities and importance of 
bilateral and multilateral trade negotiations, we hope that the introduction 
of a CARICOM single market in 2005 will help Caribbean businesses to offer 
more competitive and efficient goods and services to the Caribbean tourism 
sector. , This will be an important step.   The enhanced recognition of 
tourism within the scope of trade negotiations will lead or region to 
establish a more clearly articulated definition of tourism.
 
It is difficult in a short introduction, to represent all views and issues, 
and my colleagues will elaborate on other matters as we move forward.
 
Once again, my colleagues in the private sector and I thank the Government of 
the United Kingdom for the opportunity to take part in this most important 
meeting and assure you of our commitment to work with all parties to position 
tourism as a vibrant, successful and sustainable industry which will create 
jobs, wealth and prosperity for all Caribbean communities.
                      
6 November 2003