CDB study recommends strategies to enhance economic impact of tourism industry
The tourism industry is changing, and Caribbean countries must adapt in order to make the most of the emerging economic development opportunities. “Tourism Industry Reform, Strategies for Enhanced Economic Impact”, a study by the Caribbean Development Bank (CDB) and released today, puts forward recommendations and strategies to enhance the economic impact of tourism in the Bank’s Borrowing Member Countries (BMCs).
Dr. Wm. Warren Smith, President, CDB, noted “Tourism is the engine of growth and a major foreign exchange earner in many Caribbean countries. During the last two decades, we have witnessed a distinct shift in the profile of visitors to the Caribbean and as a result, in the industry’s structure. These changes in the industry have signalled a need for policy-makers and key industry players to rethink their strategies for improving the competitiveness and safeguarding the medium to long-term development prospects of the industry in this Region.”
Dr. Justin Ram, Director of Economics, CDB, said that the study is significant, as it provides much-needed empirical analysis focused on the economic impact of the industry. “This research provides the opportunity for broader, critical, evidence-based policy-making in the tourism industry where business strategies have clearly evolved over the decades. These strategies are continuing to evolve, forcing the need for more frequent and timely analysis on which to base changes in policy and strategy so as to maximise economic impacts,” he said.
The study characterises the causal relationship between tourism activity and GDP growth in the Region, drawing on data from each of the BMCs between 1989 and 2014. Two major trends that are particularly significant were identified in the evolution of the tourism industry.
First, there has been a slowdown in the growth rate for long-stay tourism arrivals in BMCs, with an average rate of 2.5 percent, compared to 4.5 percent globally. Second, there has been a dramatic increase in the number of cruise arrivals in the BMCs, with the number of cruise visitors more than tripling over the period under review. This is noteworthy, as the impact of tourism on GDP growth varies significantly by arrival type.
Five broad recommendations are presented for consideration by regional stakeholders:
- Leveraging tourism as a tool for economic development, diversification and stimulating growth and linkages in other sectors such as agriculture and creative industries;
- Organising the tourism industry through coordination among stakeholders;
- Conversion of more cruise ship visitors to long stay visitors ;
- Exploring further opportunities for regional collaboration; and
- Preparing for the tourism industry of the future by staying aware of new trends and adapting accordingly, such as the shared economy and greater use of technology through the entire visitor experience and tourism value chain
The study was presented during a seminar at CDB’s 47th Annual Meeting of the Board of Governors, which is being held in the Turks and Caicos Island and ends today. Panellists included: Honourable Edmund Bartlett, Minister of Tourism, Government of Jamaica; Stacy Cox, Executive Director, Turks and Caicos Hotel and Tourism Association; Hugh Riley, Secretary General and Chief Executive Officer, Caribbean Tourism Organisation; and Dr. Amos Peters, Economist, CDB.