By Darren Joseph
April 03, 2012
By any measure, tourism remains the biggest industry in the Caribbean region. The UK is a key source market for visitors and many jobs depend on arrivals to the region remaining strong. But the challenges are many as tough economic conditions, taxation and incentives for Brits to stay at home are hard to ignore.
Despite the optimistic economic outlook outlined in the Chancellors March 21 budget speech, Trevor Greetham, a fund manager at the UK’s biggest ISA manager, Fidelity, said that the UK had little hope of emulating the impressive recovery currently on course in the US unless the Government relented on austerity measures.
“America is experiencing a growing housing market, improved car sales and more job creation. We should be striving to create these conditions here, but austerity is keeping growth weak in the UK,” he said.
Greetham’s sentiments are consistent with those expressed by other players in the UK’s financial services sector. It is against this background that Chancellor of the Exchequer George Osborne delivered a further blow to those of us who depend on the travel and tourism sector. The dreaded Air Passenger Duty (APD) tax rates on travel will increase by double inflation from today.
It was also announced that APD rates will further increase from April 1, 2013 with the Chancellor expecting to collect £2.7bn in 2011-12, rising to £3.9bn by 2016-17. So at a time when consumers are feeling the pinch in their wallets, taxes will drive up the cost of travel.
As if that was not enough, a £5m advertising campaign was launched in March. A series of TV adverts and a discount scheme hopes to encourage people to take a staycation this year of the Diamond Jubilee and Summer Olympics. It is being led by VisitEngland with the support of the tourist boards of Scotland, Wales and Northern Ireland. Jeremy Hunt, secretary of state for culture, media, sport and the Olympics, explained that, “This is the first time we’ve had a national domestic tourism marketing campaign.” He went on to say that “it is completely measurable—we will know how many nights are booked as a result of this campaign.”
Hunt concludes by saying that “…as an industry and as a Government, we will know whether this type of campaign works and what the return on investment is.” Caribbean countries as well as the Caribbean Tourism Organisation (CTO) have long been lobbying London to revise the APD with Grenada’s Tourism Minister Peter David describing the measure as not only negative but discriminatory.
Discriminatory; as flights from the UK to the Caribbean are taxed at the same level as flights from the UK to the United States. In fact, one can argue that there is an inherent bias towards destinations located west, of East coast US destinations, over Caribbean islands. This is because travellers incur a higher APD charge for direct flights to the Caribbean, despite the fact that these US destinations are further away.
In February the Jamaican Tourism Board (JTB) reported an 8 per cent decline in Jamaican arrivals in the May 2011 to January 2012 period, compared to the previous year. Tourism Minister Dr Wykeham McNeill attributed part of the decline to the APD and has stepped up its marketing in the UK. Specifically, the JTB will begin advertising on UK television “for the first time in many years”.
Already, a very high profile Virgin broadband advertising campaign featuring Usain Bolt is boosting Jamaica’s profile in the UK. His presence at the London 2012 Olympics will hopefully boost the profile of Jamaica as well.
Trinidad and Tobago will of course be setting up a Trinidad and Tobago Village during the Olympic period, to highlight all aspects of Trinidad and Tobago culture. There will be fashion, music, food, theatre, film, art, workshops, as well as business exposure. From July 22 to August 25, the Tricycle Theatre in Kilburn, London will be a mini T&T. I for one look forward to visiting this Village and hope that it ties well into a comprehensive destination promotion strategy.
Speaking of which, I am wondering whether the plans announced in the March 2011 press release (TDC Web site) for Jamaica and Trinidad and Tobago to work together to promote the Caribbean region during the 2012 London Olympics is still on the agenda? To hear that our region is working together is a most beautiful melody.
My name is Derren Joseph and I love my country and I love my region. Despite our current challenges, I continue to have the audacity of hope that we will all enjoy a brighter tomorrow. Read more on derrenjoseph.blogspot.com
Not sure where you’re getting your information from, but as a US citizen I can guarantee you there is no economic recovery going on in this country. The housing market continues to contract, foreclosures are still at an alarmingly high rate, unemployment has barely budged, and car sales are still flat. The UK should stick with its austerity measures because they are part of a long-term solution. In the US we keep spending money we don’t have and we’re falling deeper into the abyss.
Matt,
Information re the improving US economy is readily available from numerous sources:
The BEA confirms that the US Economy grew at 3% over the 3rd quarter of 2011.
The US Labour Department report this Friday is expected to show job growth above 200k for the 4th consecutive month, for the 1st time since 1999.
The WSJ reports that US Total car sales were up over 12% in 2011.
Many would argue that the long term solution to cutting unemployment and deficits is to grow the economy which requires investment, as opposed to the current UK strategy of cutting your way to growth.
You are entitled to disagree, however to deny that the US economy is recovering faster than the UK economy (where growth is flat and unemployment is rising) is a position unsupported by any verifiable evidence.
http://www.bea.gov/newsreleases/glance.htm
http://www.reuters.com/article/2012/04/03/us-usa-economy-jobs-idUSBRE83212A20120403
http://online.wsj.com/mdc/public/page/2_3022-autosales.html
I would have to agree with Matt. There are economic indicators that would normally reflect an improving economy, but the United States has never faced this sort of dilema before which makes it difficult at best to rely on most information out there. For example, just last week Leows and Home Depot stocks where up, but construction of new homes was flat. New unemployment claims have been this low since 2006, but many more are either no longer looking for jobs and or making less now than what they where six years ago.
Nations that need to grow thier tourism markets by attracting U.S. travelers should focus more on how U.S. Citizens feel about thier economy rather than rely on business propaganda.
The United States is exporting Jobs and importing labor. They (the U.S. governement) are spending money that they don’t have and have been downgraded. They are not thinking about will happen if they keep spending. Well families are to an extent and thats why it’s hard to see a family on vacation outside of the U.S. when the same amount of money and a fraction of the effeort can be spent on improving ones personal condition at home.
“By any measure, tourism remains the biggest industry in the Caribbean region”
The above statement, if true, must surely be a cause for concern to Caribbean leaders singly and collectively. The disadvantage, as an ex once put it, of being an option to someone whom you consider to be an imperative must be blatantly obvious. Surely the need for the region to diversify away from Tourism must be even more urgent than Trinidad and Tobago’s need to diversify away from oil and gas.
Singapore is a fairly cohesive city state blessed with being situated in a strategic maritime choke point. But beyond those benefits, it has no better resources than the Caribbean, except perhaps a more disciplined and productive work force!