Where is Tourism in the Caribbean headed?

Can small Caribbean destinations capture more of the sunbound?

Op/Ed by Alan Barry Ginn

First, we need to understand the beginnings of tourism in the Caribbean. The underpinnings began with Bermuda, being closer to London than the Caribbean but importantly, nearer to North American ports. From early in the British occupation of Bermuda, a strong military presence led to the birth of steamship services. This brought about increased movement of people to and from Britain, as well as North America.

Over time, more and more people began to spend time there. Starting in about the mid 1800s, Barbados and Jamaica began to be seen as destinations where the tropical climate imparted health benefits. These became, and still are, major destinations for British tourists. The strong links to the metropolitan power was, and still is, a major driver of tourism to the region.1

Starting in the late 1800s, Americans "reached the Caribbean in large numbers for the first time by advent of the US- owned United Fruit Company. This produce company used dual-purpose "banana boat cruises," delivering tourists to the islands on the way out, and bringing bananas from Central and South American plantations to the States on the return voyage".2

In the 1950s, The Bahamas and Cuba became major destinations because of proximity to the United States, After 'La Revolución', virtually all of the activity in Cuba shifted to The Bahamas. Also important because of their position of direct American ownership (and investment) were Puerto Rico and the US Virgin Islands, by virtue of ability to travel there without needing a passport.

After the advent of the passenger jet, in the early 1960s, more and more people began to travel to the region. The destinations favoured were those with good airports and in close proximity to American source markets. Over time, these places developed on the basis of the 'all-inclusive' model, which meant travel for families was more accessible because of lower prices. The leader was Jamaica but others soon followed, especially the Dominican Republic. Cuba continues to develop, despite the blockade from the United States with Canadian, European and other Latin American visitors being the main markets.

In effect, the inertia from the early history has driven large development and still does to this day. It is partly geography, in the closeness to American markets, but is also associated with colonialism. The point is that these places already have an unassailable lead in the market. They have established brand awareness, location advantage, developed infrastructure, more available rooms, more sales channels, more marketing money and more people.

This point is not lost on locals: "I find it difficult to believe that North American tourists will travel all the way to Tobago just for the “Sandals experience.” They can get that more cheaply/conveniently closer to home, in Jamaica (the home of Sandals) for instance. ... A Tobago Sandals is unlikely to prosper if it depends mainly on North American arrivals. It might have a chance if we invest some effort into exploring/wooing the South American market. People who want the Sandals experience will, most likely, choose the closest or most convenient one".3

Essentially, there are two Caribbeans when it comes to discussing tourism. One is the more developed model, as demonstrated mainly in the northern destinations: The Bahamas, Cuba, Jamaica, Dominican Republic, Puerto Rico and also in the US Virgin Islands. The 'all-inclusive' style of accommodation is dominant. This historical dominance also includes Barbados by virtue of the long standing link to wealthy British tourists.

The 'other' Caribbean entails mostly the Lesser Antilles and Trinidad & Tobago. These islands were later in entering the tourism industry. Despite efforts to mimic the established destinations, tourism is 'different' here, partly drawing on the small island cachet. Looking at countries such as Dominica and Tobago, these places have adopted a mantle of 'untouched' in order to attract visitors looking for a more intimate or authentic experience.

These other countries have followed in the footsteps of the major destinations. However because of a variety of problems they have met varying levels of success. Competitive forces, weaker infrastructure and attracting investments historically being the most difficult barriers to overcome. As well, many governments had been late to enter the game.

The Caribbean is characterized as "the most tourism dependent region in the world".4

Most destinations define 'dependence on tourism' in terms of the proportion of their economy which tourism comprises. The thinking is, a 'tourism dependent' economy derives a large proportion of income, foreign exchange, and so on from supplying tourism facilities such as hotels, resorts, airports, etc. Since tourism is the key industry in most Caribbean countries, there is a heavy 'dependency' on visitors.

Dependency theory also explains that a country with a high 'dependence on tourism' has a high level of reliance on foreign investment along with the sourcing of tourists from metropolitan countries. Caribbean nations, while striving for governmental, social and cultural in-dependence, are therefore still economically dependent, at least to some extent, on a colonializing power.

This ongoing dependence renders a situation in which very little of the foreign exchange, profit and revenue that tourism brings actually stays in the country, otherwise known as a high level of leakage from the economy. For practical purposes, the visitor never left their home country, or rather, about 70 - 80% of the money they spend either never left or is almost instantly repatriated upon check-in.

In turn, if the tourism industry falters or fails the consequences for the country are potentially disastrous. In other words, if visitors don't arrive on local shores the outcomes are negative impacts from this dependency. This risk is augmented when the economies delivering the visitors are controlled by a small number of tour operators so that any change in these companies marketing strategy can have a big impact on the host destinations. It is a self-feeding loop of dependence—foreign control—leakage—dependence, and so on.

With a level of leakage and economic dependence that is endemic to the Caribbean, the disparity between the high level of spending by foreigners in the 'all-inclusives' and the relative pay check for the average worker is stark. Caribbean people do understand that there is not much trickle-down that ends up in their pockets.

David Jessop, on the Jamaica’s Tourism Minister's comments at a recent conference, states that:

"In the case of almost all of the Caribbean, and despite its middle- or high-income economic status, most nations have seen income inequality accelerate. Put bluntly, the incomes of the poor relative to the rich have not increased as a result of surging tourist arrivals.
The challenge this poses to government and the industry as a whole is that it requires both the public and private sectors to substantially revise the view that all tourism, accelerating arrival numbers and perpetual growth are good for all, and that the taxation and economic inputs that foreign visitors and investors provide will always have a positive economic outcome for society as a whole.
Minister Bartlett’s words suggest that that at least one person in a position of influence has understood the need to realign the industry’s objectives with those of citizens, that the value of Caribbean tourism as presently structured will peak and may soon reach a turning point, and that the industry in the national interest requires new thinking".5

As a consequence, Caribbean governments must come to grips with the dead-end of giving concessions to businesses when there's no tangible economic benefit to their citizens, the so called 'race to the bottom'.

"The managing director of the International Monetary Fund (IMF) speaking at a recent high-level Caribbean forum in Jamaica was very blunt is presenting the effects of the crisis of leadership without imagination. Christine Lagarde stated: “This is something that is prevalent in the Caribbean – not only in the Caribbean – but there are also other places that, essentially, race to the bottom. The problem with the race to the bottom – offering the best possible tax deal, at the lowest possible rate, over the longest possible time – is that everybody ends up at the bottom, and the capacity to generate revenues and growth is impeded for all of them.”
If an analysis is done on the value of concessions given to the tourism sector in Saint Lucia, that sum may reach over $1.0 billion. Yet with that investment by the government of Saint Lucia, we are still in a poor economic state. We cannot solve our problems with the same thinking that created them".6

Cruise tourism

A third 'Caribbean' may be the one which the cruise industry has adopted as the basis for a bustling cruise tourism industry. It is important to separate this type of tourism, however, because the visitor the cruise ship delivers is highly transient, usually only on a short daylight visit, involving shopping or maybe an island tour. These visitors are 'cruisers' primarily and will probably never return for a longer stay. Many cruisers don't even leave the ship while in port.

In recent years, the sheer volume of visitors arriving in the Caribbean by cruise ship is eclipsing visitors arriving by air. And although large numbers of cruisers disembark, it is well known that the cruise ship visitor spends far less than a stay-over visitor. This makes sense because most of a cruise visitors needs are provided for before arrival to or after departure from any port of call (and also during the visit, for that matter). This might be described as the Caribbean tourism 'loss-leader', similar to methods used to attract customers to retail shops with the goal of triggering other purchases.

In reality, there is little need for this visitor to spend money. The passenger's attitude is simply that the 'all-inclusive' cruise has been paid for and there is nothing s/he needs to buy. The key word is 'need' — but the focus of destinations is on 'wants' and there's not much that cruise visitors 'want' that they're willing to pay very much extra to buy (or carry home). This drives down the opportunity for local suppliers both in terms of what they can offer and the price they should be able to get, when they do have something worthwhile.

Possibly, an exception is the 'island tour' delivered by a host of local taxi and tour companies. The arrival of a cruise ship is eagerly anticipated by these companies and most of them support the government's efforts to bring in cruise visits. The downside is that many tours are presold by the cruise line before arrival, so this cuts in to the available market for the local drivers, and again puts downward pressure on the price they can attain.

The problems of leakage, meagre returns to local people and lack of environmental concern have already been discussed extensively by authors such as Polly Pattullo in her landmark book: Last Resorts in 1996.

Caribbean islands cling to the "hope" that the cruise visitor will become a stay-over visitor and this seems to be the conventional thinking. If you're a cruise line, you would continue to promote this as a key attraction for destinations. Getting islands to pay for expensive infrastructure is good, not least for cruise lines. Importantly, the cruise line holds onto its option to return — or not to return — at their sole discretion, and whim. This ups the ante, as well as increases the pressure on destinations to conform to industry demands. It would appear not to be a stable (or equitable) return on expensive investments. Fortunately for destinations, the advantage may well be an overall improved look and feel for all visitors. Destinations need to find other ways to capitalize on these investments.

As well, growth in cruising has been faster than tourism in general.7,8 Despite current problems, the volume of cruise visitors is likely to continue to increase, at least for the foreseeable future. Further, it is also well known that most cruisers are repeat cruisers. Well, if you were a satisfied cruise visitor, and most are, why would you want to change? Therefore, the likelyhood of converting this visitor is slim, at best. Destinations cannot solve this problem because to cruise lines, it is not a problem. Maybe the meagre return to the local economy from this visitor has a pay-off but its really hard to see where it is. Cruise lines are far and away the biggest benefactor, that is not in much doubt.

What is available for smaller destinations to break this 'cruise/all-inclusive' dependency pattern, or at least turn it to their own advantage?

Differentiate and diversify: Don't try to be the same as the main destinations, it is not possible. The 'price conscious consumer' is not the only game in town.

Consider that the 'price conscious consumer' is the least likely to spend any additional money beyond the all-inclusive fare and is the least likely to deliver any additional benefits to local economies. This level of tourism also has the highest proportion of leakage in that most of the visitor's spend is in businesses controlled by foreign interests: airlines, all-inclusive resorts, cruise lines —along with the shops controlled by these groups. The low-end all-inclusive resort and cruise lines are already heavily promoting to this customer so it is expensive to try to compete in this market while the potential benefit is relatively limited. Marketing questionnaires and surveys might be designed to determine who this 'price conscious consumer' is, with the intent to target promotional expenditures away from this class and towards higher value potential visitors.

The first thing to come to grips with is that the customer is choosing the cruise/'all-inclusive' product because, to many, it is a superior product. In the competitive marketplace, the customer is attracted to products that offer value for money, and 'all-inclusive' certainly delivers. The strongest appeal is to the 'price-conscious consumer' so destinations marketing to this group will have a difficult task to compete. Certain higher value visitors are also drawn to this travel style, hence the popularity of luxury cruises.

Next, take a look at the geographic reality. The established tourism centres are all in the northern Caribbean. This means shorter, cheaper flights from most North American markets. What would attract a visitor to board a plane with a longer, more expensive flight? The answer is: be better because the being the same is not enough.

Next, check out the competition. Lesser known Caribbean locations represent a tiny fraction of world tourism arrivals. In order to directly compete against the inertia of built destinations, established markets, geography, cheaper flights, and so on requires expenditures that are unlikely to deliver proportional returns.9

It is nearly impossible to think about a Caribbean destination without invoking a sun-sea-sand image as the backdrop. Fortunately, this blend still has strong appeal to all segments of the visitor marketplace and always will have, for obvious reasons. Toss in coconut palms, lazy tropical breezes, exotic lifestyles or local foods and beverages and the appeal becomes nearly irresistible.

Some have even tried to mix in other "s's" with sun-sea-and-sand — often followed by a '?': sangria (Spain), spiritual (Spain), sound (Caribbean), splendour (Anguilla) and sex. Other possible s's may be: safe, secluded, seductive, sensual, sightseeing, sports, surgery and sustainable. The objective is to bring an even deeper attraction as well as to include other human needs.

In addition, each unique Caribbean nation, along with valuable human resources, has other natural resources apart from sun-sea-sand. So the exploitation of any marketing potential, without doubt, must include these attributes as key marketing strengths. What is the destination known for? Play up strengths by developing the niche or specialty that is already present. Emphasize core attributes. Always bear in mind that delivery of tourism services is a people-to-people enterprise. Indeed, Caribbean destinations have learned very well how to utilize resources — human, geographic, climate — to their best advantage.

Many of the resorts in the Caribbean have been in existence longer than anywhere else in the world: The Crane Beach, Rose Hall or The Hermitage, as examples. It is really Caribbean hoteliers, promoters, business owners who have made this happen, consistently over several decades. These "places" continue to attract visitors from all over the world and from all tourist segments. So — while the Caribbean is "the most tourism dependent region in the world", it can also be stated that the Caribbean is also one of the 'most successful' or 'most desirable' or 'most experienced' — tourism regions in the world. The Caribbean, as a 'place', is consistently near top of mind for travellers, the question is: are the other 'P's' up to the task?10

The way to see this is that destinations are literally in competition with the 'all-inclusives', and the 'all-inclusives' are winning because they possess superior planning, marketing and negotiating skills. The thing is not to criticise the 'all-inclusives' for doing a very effective job of what they set out to do; instead, the solution is to offer at least as competitive a product but do it in a way that broadens the appeal to a wider range of potential visitors. The outcome of which is to benefit all visitors, cruise as well as stay-over.

For example, ports of call might negotiate with cruise lines to offer longer stays, such as overnight.11 This may benefit local entertainment — night clubs, shows, local entertainers. Cruise lines may also benefit by a new, more diverse product offer.

As well, cruise lines might offer a stay-over option for passengers, similar to a Eurail, Amtrak or CanRail pass. This has logistical complications but it may be a way, particularly for smaller cruise ships to offer a different category of product than the larger ships.

Small ship cruises appeal to a different type of visitor and have a benefit being able to dock in smaller, less popular ports. The small ship cruiser, possessing a more culturally aware profile, also has a higher potential to spend money in destinations and interact with local people. Importantly, smaller ships require smaller docking facilities so it may be possible to spend much less on the infrastructure that large ships require.

Destinations may require 'all-inclusive resorts' to promote local entertainers or exclude one evening from the packaged offer so that visitors are encouraged to frequent other local eateries at least once during their stay.

The best option is for Caribbean islands to up the ante by improving products and services. This may, in turn, allow a slightly higher price and would definitely attract a better class of visitor. This requires solid, long-term commitments from governments, vocational schools, service providers and literally anyone who faces the visitor during their stay.

It would also advantage most of them to pool resources and to co-market as has already been done.12 For Caribbean nationals, problems with inter-island travel continue, frustrating the related economic developments.13 However, opening linkages and services will bring substantial benefits, fostering innovation, business opportunities and closer ties. International travellers will be attracted to better fluidity of movement to explore nearby places.

Supplying the "best available" choice. The modern service provider's mindset has evolved from the notion that 'service' is 'servitude'.

A 'way of providing' is the best available, that is, until a better way is found. In other words, the service should not be supplied in its present form if a better way is known to exist. The prevailing attitude must be: "I'm going to do the best I can" and "I'm always on the lookout for a better way". Cruise lines have a choice to dock or not to dock. In the same way, tour operators also have a choice to fly, or not to fly — anywhere — and they will fly where the opportunity consistently delivers the best return for them, and for their customers. It is fundamentally important to realize that a 'place' is also in competition with other tourist regions and there's plenty on offer. Indeed, the Caribbean is truly special — however the real 'dependency' is on appropriate delivery skills so that this special character does not disappear.

Unfortunately, some workers may be tempted to resist because they don't agree. There may be an underlying attitude in which it is accepted practice to do less and offer less because the individual does not like their manager, or their customer, or their job. This individual may see themselves is a relationship of 'servitude' and not 'service'. But, if you're the visitor, you are certainly entitled to expect to be treated at least fairly and politely, regardless of any underlying issues. If you're a visitor, and you are not treated well, what are the chances you will return? I think most people will see the negative potential that this generates. Visitors are aware that there are other choices of places to travel to, so a less than congenial attitude alone may cancel any promotional efforts the destination is undertaking. If you're 'depending' on a better outcome from tourist arrivals, this is not the way to deliver it.

Tourism, especially mainstream tourism, as it is currently being offered tends to be superficial. The primary group that benefits are the MNCs that supply the tours: the rooms, food and beverage and air transport services. There is little left in this offering for local service providers, workers and destinations. Not even the tourists themselves gain a lasting benefit from this 'all-inclusive' product. This may keep the public temporarily satisfied but they're always wanting more. This is also not a viable long-term outcome.

Tourism needs more than this. The future of tourism must be guided towards delivering benefits to more participants, if it will remain a key industry and development base for 'other-world' destinations. It must be able to do this while delivering profit to providers, income to local people, and lasting benefits to visitors — and be able to do all this on a base of fewer visitors, who, at the same time, are willing to pay a little more for the privilege of setting foot in places away from their homes, without wrecking its ability to continue to attract. Sheer growth in numbers is not a sustainable path — air arrivals, hotel occupancies, and so on. Growth in visitors who derive benefit, and residents who also derive benefit, from a deeper interaction is the more sustainable path. This challenges the conventional approach of growth at any cost. It also challenges destinations and service providers to deliver an outstanding experience.

"High volume vs. high value tourism: The type of tourism significantly determines whether or not it creates good jobs, contributes to local livelihood, protects the environment, and so forth. Traditionally, success in tourism has been measured by sheer numbers: tourism ministries typically measure success based on more arrivals, more hotel rooms, and more investments, foreign or domestic. At CREST, we have come to understand that arrival numbers and occupancy rates say little about the actual costs and benefits of tourism. Put succinctly, we have come to understand that there are significant differences between high volume and high value tourism".14

The idea is to create the attitude and approach that Caribbean people have the most to offer when it comes to selling high quality tourism. Its not going to work to try to appeal to 'mass-markets'. It is not possible to compete by selling only on price — there will always be pressure to move to the lowest price to attract the 'price-conscious consumer'. This is not sustainable and needs to be resisted as much as can be done in order to shift the emphasis to better quality.

The challenge will be in how to upgrade the product offering, how to project the perception of upgraded product and then how to attract tourists who are willing to pay a little more for this better product. This visitor is interested in interacting more with the destination and local people and is more willing to stay longer and spend extra money on meals, activities, souvenirs, and so on. This visitor does not see their 'spend' as a cost but rather as a way to deepen the experience and to bring it home. As well, this visitor is more likely to return, again and again.

The goal is to increase revenue by increasing stay-over visitor numbers alone and to do it in a way that visitors will actually appreciate. Focussing on 'satisfaction' both for visitors and for residents will deliver the best outcome.

Many Caribbean destinations are already on this path.

The Caribbean Brand — "Always Refreshing"

Issues for Caribbean tourism: Countries and service providers / suppliers

Increasing volumes of visitors over the mid to long term is potentially a negative factor for several reasons:

Aside: Protection of biodiversity is a fundamental goal of sustainable tourism

The knowledge base for this important goal is well established. The education of the principles is even included in Caribbean Examinations Council (CXC) post-secondary curriculum.

When new developments are planned, or when visitors (and residents) are using resources it behooves them to take care not to wreck these resources.

Yet, time and again the governments themselves, for reasons of job creation or pressure from developers, are willing to overlook the protection guidelines and policies in order for development to proceed. It is very possible for the developments to dead-end or become or white elephants, even before the first shovel goes into the ground. Proper siting and planning would prevent many slow motion disasters.

This happens even when these countries have their own environmental and sustainable practices policies firmly in place. Prone to flooding and sea inundation from storms, Buccament Bay in St Vincent is an example of a resort development that should never have been allowed.

Here is another example:

With serious question from local stakeholders, the proposed development of the Sandals/Beaches resort in Tobago was to proceed on close to 600 acres in the Buccoo Reef, Bon Accord Lagoon area.

Even after assurances had been publicly stated: "“No Man’s Land”, the secluded beach bay bordering the world famous Buccoo Reef in west Tobago, will always remain a public site" and “Anything that we do is going to be balanced development, development that will benefit Tobago and the country, and development that is not going to undermine the environment or the integrity of the island,”"15

The said 'Buccoo Reef, Bon Accord Lagoon' is protected by Ramsar Convention to which Trinidad and Tobago has been a signatory since 1993.16

Further, Trinidad and Tobago has had a sustainable tourism policy in place since at least 2010.17

And ... "This Policy was preceded and informed by the Tourism Master Plan (1995), the Three-Year Rolling Plan (2002-2004) and the Comprehensive Economic Development Plan for Tobago (2005). The Trinidad and Tobago Social and Economic Policy Framework (2002-2008)" (pg 1)

Further, discussions about the development, between the T&T government and Sandals Resorts International had reached the 'memorandum of understanding' stage even before any public consultations had been undertaken.

It appears that the announcement of the project going ahead, although intented to deliver 'jobs', was premature given the opposition. But it is also clear that negotiations were secret and the disclosure of real facts was kept under wraps. It took a 'Freedom of Information' query by Afra Raymond to reveal the important, but hidden, details.18

It was not even determined that such a resort would be marketable because no feasibility study was ever done. See: Why Sandals success where Hilton failed? (see: note 3)

With claims about public support, the project was cancelled but if the people of Tobago had any input into the planning stages, it is doubtful that it would have even gotten that far.

It is very likely that this development would have had serious detrimental environmental and social consequences down the road, perhaps in five or ten years and the people of Tobago would be on the hook for the costs, not unlike what occurred with the Tobago Hilton.

So, while the potential for some short term, low wage jobs may be real, the longer term costs (and impacts) are a drag on development and cannot be disregarded.


Related reading

Beyond Sun Sand and Sea: The Emergent Tourism Programme in the Turks and Caicos Islands by Catherine M. Cameron and John B. Gatewood, 2008 (PDF)
For emergent tourist destinations, the older more developed islands can serve as a model of what not to do.

Beyond Tourism: The Future of the Services Industry in the Caribbean by Daniel P. Erickson and Joyce Lawrence, The Centre for International Governance Innovation (CIGI), 2008 (PDF)
This essay assesses the future prospects for the Caribbean to create a thriving service-based economy and offers ideas to help the region to both build on and transcend its reliance on tourism to carve a more profitable and sustainable niche in the global economy.

All Inclusive OR the Real Costa Rica? (local copy)
Are you trying to determine whether or not to go to a Costa Rica all inclusive resort? If so, you certainly are not alone. If you are reading this article it is likely that similar to many travelers, you are under the assumption that staying at an all inclusive resort is the best way to travel.

Jamaica's Tourism: Sun, sea and sand to cultural heritage, Copeland A. Stupart, Robert Shipley, 2012 (PDF)
Abstract Traditionally, Jamaica has been seen and promoted as a sun, sea and sand, winter get-away with foreign-owned, multinational corporations (MNCs) having a controlling interest. Coupled with this, the policies adopted by the state to encourage tourism infrastructural development protected the interests of the MNCs and were seen by many Jamaicans as not being in the best interest of their country. As a result, high levels of resentment existed and at times boiled into open conflict between tourists and the Jamaican working class who viewed tourists as "confused white people." While efforts were made to promote Jamaica's tourism internationally, little was done to promote its benefits locally. Now, Jamaica's tourism industry is at a watershed for even the innovative, largely indigenous and successful "all-inclusive" concept has failed to market Jamaica other than as a sun, sea and sand destination.
If Jamaica is to participate actively in global tourism and continue to make its presence felt in the tourism marketplace of the 21st century, indigenous and 'authentic' cultural heritage has to become a part of the tourism product. Also, the tourism industry has to continue to develop avenues through which the Jamaican working class can participate and derive meaningful benefits.

Valuing and protecting biodiversity in the Caribbean, UNEP, 2017
The Caribbean is a biodiversity hotspot. It has over 11,000 plant species, about 72 of which are found only in this region. Its diverse animal species include many exotic fish and birds.
The world benefits from this biodiversity, so when these species are exploited for commercial use - for example in the manufacture of pharmaceuticals - source countries need to be compensated.