Jamaica tourism facing uncertain times amidst crumbling global economy

Sections of the recently released World Economic Outlook Report of the International Monetary Fund (IMF) read ominously:

“The global economy is in a dangerous new phase. Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing … . At the same time, the handover from public to private demand in the US economy stalled, the euro area encountered major financial turbulence, global markets suffered a major sell-off of risky assets, and there are growing signs of spillovers to the real economy. The structural problems facing the crisis-hit advanced economies have proven even more intractable than expected, and the process of devising and implementing reforms even more complicated. The outlook for these economies is thus for a continuing, but weak and bumpy, expansion.”

This is not good news for Jamaica. The shaky economies of our major trading partners to our north, the lingering effects of a devastating global economic crisis, an inherently and structurally weak economy and deep-seated social problems all converge to put serious doubt on our economic prospects.

It is amazing, though, that despite the overwhelming challenges, the Jamaican economy has managed to stabilise with the necessary macroeconomic indicators for growth and development looking increasingly better. And to this day, good news abounds from various sectors of the economy.

TOURISM BOOM

The tourism sector is by far the most impressive. Over the last two weeks we have seen a flurry of positive news emanating from the sector. Amazingly, despite the inherited challenges, the global economic crisis, oil crisis, the Dudus West Kingston saga, and persistent image challenges, the industry, though not devoid of problems, has seen commendable growth rates that far outpace countries throughout the region. It certainly speaks to expert leadership by Minister of Tourism Edmund Bartlett and effective management from the Jamaica Tourist Board.

Probably the biggest news story of the week was buried by the happenings of the People’s National Party annual conference, particularly the yet-to-be-detailed and now highly doubtful populist Jamaica Emergency Employment Programme (JEEP) announced by PNP President Portia Simpson Miller.

The minister of tourism announced, amid the entire political clamour, that for the first eight months of 2011, Jamaica has grossed almost US$1.5 billion in record earnings, representing a 3.4 per cent increase. Added to that is 2.1 million tourists visiting the island up to August 31, representing a 5.7 per cent increase in visitor arrivals which includes a whopping 13.6 per cent increase in cruise arrivals. Director of Tourism John Lynch pointed out separately that they have secured 1.05 million airlift seats into the island for the upcoming winter tourist season which begins December 15. All reported on but lost in the sensational political clamour.

Jamaica may be a naturally popular brand with many positives, but it has just as many negatives. To market this destination requires exceptional marketing and public-relations efforts, coupled with clear-minded vision and leadership. That aggressive marketing and leadership from the government end is done with limited financial resources.

Fortunately, Jamaica has maintained moderately good visibility and has sought to keep its product dynamic as best as it possibly can. This may, in part, explain Jamaica’s hotel and resort bookings success with an eight per cent increase in revenues and average daily rate rise by 12 per cent as pointed out by Expedia, the very popular and world’s largest online travel company. Dynamism in the use of the World Wide Web and its surging social media certainly factor and, thankfully, can certainly save money that we simply don’t have as a country to pour into huge advertising campaigns that still have immense value.

DIVERSIFY NOW

With the bleak outlook for the economies of the United States and Europe that combined account for well over 80 per cent of tourist arrivals, there is now a need to diversify our product and reach out to new and emerging markets. Aggressive moves then to access the Latin American market represent a major step in the right direction. The IMF report was clear as to where growth will remain reasonably strong and where there may be major challenges in South America and the Caribbean.

Any delay in moving to quickly diversify our tourism market will only hurt us. The IMF warning to the Caribbean and Central America countries was clear: “A sharper slowdown in advanced economies, notably the United States, would dampen growth, particularly in economies dependent on trade, tourism spending, and remittances.” With Jamaica’s two largest earners of foreign exchange being tourism and remittance, we find ourselves in a dubious position.

The minister of tourism and his team appears to have long gone around the curve. In May, the Jamaican Government and, more specifically, Edmund Bartlett, headed a team to South America with the ultimate aim of boosting seat support between Jamaica and the continent. Already 10,000 new airline seats, mainly from Brazil, Chile and Colombia, have been secured.

At the Jamaica Product Exchange, the largest ever, there was a strong turnout of representatives from new markets such as Brazil, Ecuador, Colombia, Chile and Costa Rica. This is tied in with Copa Airlines’ – a huge Latin American carrier – new non-stop service between Panama City and Montego Bay that will open up the tourist markets from several South and Central American countries. This will eliminate the usual connection through Miami or other major American cities to get to Jamaica. By doing this, one more of several hurdles is cleared as transit visas and other hassles turn away potential visitors.

The potential for Jamaica to attract travellers from South America is impeded, though, by bureaucratic visa woes that the Government has commendably sought to address expeditiously, while seeking to balance, as best as possible, national security and immigration concerns. Additionally, our fiscal constraints and high-risk averseness continue to impede our enormous potential.

Many still argue that the tourist industry only benefits a few. This is untrue. If the industry was to have collapsed overnight, it would spell doom for Jamaica. There is, however, a need to spread the benefits of tourism to people throughout Jamaica. We have seen the effort of tourism stakeholders, Government and others to further develop community tourism and strengthen linkages with agriculture, manufacturing and other areas. We cannot negate the fact, though, that tourism’s contribution to the economy is far more than the general consumption tax or direct taxes it generates. After all, the foreign exchange it brings in, the more than 280,000 direct and indirect employees, and the demand for goods and services remain highly beneficial.

Author Delano Seiveright is president of Generation 2000, the young-professional affiliate of the Jamaica Labour Party.

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