Edmund Bartlett, GUEST COLUMNIST
The following is first of two sections of a presentation made by Edmund Bartlett, opposition spokesperson for tourism and travel service development and former minister of tourism, to the 30th Conference of the Institute of Chartered Accountants of the Caribbean in Antigua last weekend.
A key element of a successful tourism industry is the ability to recognise and deal with change across a wide range of behavioural, environmental and technological factors and the way they interact. The coming decade and a half should see major shifts in the leisure and tourism environment, reflecting changing consumer values, political forces, environmental changes and the explosive growth of information technology. No aspect of the industry will remain untouched.
The challenge for tourism stakeholders, in both the private and public sectors, is to account for these changes proactively and to achieve and maintain competitive advantage for their organisations.
According to the World Travel and Tourism Council, globally, travel and tourism is one of the world's largest industries, accounting for nine per cent of global GDP. This is more than the automotive industry, which accounts for 8.5 per cent, and only slightly less than the banking sector, which accounts for 11 per cent.
More significantly, while the last 10 years have seen strong global growth, helped by a rising share of the fast-developing high-tech industry, as well as rapid growth in service sectors such as banking and global finance, the next 10 years are forecast to see a slower performance from these sectors. Continued growth in travel and tourism will, therefore, result in an increase in the sector's relative share of GDP. In short, travel and tourism will become more important to the global economy over the next decade.
Only in discussing reliable trend forecasts will the tourism industry be able to avoid bad decisions. For the purposes of this discussion, we will focus on the megatrends - social, economic, political, technological and environmental issues - which affect the industry.
Both destination and enterprise management take place in a remote environment dominated by global trends, largely beyond the control of management, but must nonetheless set the context for the development of strategy to achieve competitive advantage over rivals.
By 2020, the world economy is projected to be about 80 per cent larger than it was in 2000, and average per-capita income will be roughly 50 per cent higher. Most countries around the world, both developed and developing, will benefit from gains in the world economy.
If the Caribbean is to benefit from this expansion, what is required?
The region must find ways to grow our economies by improving the linkages between tourism and other sectors to reduce the leakages which now exist. The approach must address small, medium and large enterprises, as well as those seeking employment.
Pork production here is a solid example. In addition to being at a relatively low quality, Jamaica's pork production has been on a cyclical decline. The number of pigs slaughtered each year has tapered off. In the absence of adequate local supplies, local processors have had to turn to importing pork cuts from Canada. It is estimated that some 60 per cent of pork legs, 79 per cent of bellies and 70 per cent of the ribs used by local pork processors are imported.
This, despite the fact that 23 million visitors come to the Caribbean each year and in the main have bacon and sausages for breakfast.
The time seems right for the agriculture and tourism sectors across the region to get together and assess the demand for pork products and make a plan to invest in the business in order to benefit. Canadian farmers are on it!
If we are serious about improving the lives of the average citizen in our countries and facilitating the improvement of businesses that employ people, what are we doing to make this happen?
The concept paper on a strategic plan on tourism services in the CARICOM Single Market and Economy, prepared by Cecil A. Miller in 2009, recognised many of the political issues which need to be addressed if tourism is to be successful in the region. Among the critical issues Mr Miller lists are:
The need for dependable, affordable intraregional transportation.
The need to provide quality accommodation at affordable prices.
The need to work together when approaching the cruise lines as the region is not benefiting as it should.
These are issues that must be resolved at the regional level. It is, therefore, necessary for stakeholders across the region, in the private and public sectors, to collaborate.
Efforts to remove barriers to international travel, by means of the ongoing liberalisation of transport and other forms of deregulation, must continue.
If we are serious about bringing professionals together to do business in the region, issues related to the right of establishment have to be addressed.
Airlift is a case in point. The truth is, in the absence of affordable, reliable airlift within the region, international and regional tourism is hampered.
For instance, in the fall of 2008, American Airlines gave notice to all its destinations in the Caribbean that owing to high fuel cost, the carrier was forced to cut routes. International tourism was severely hampered because America is a major source market and has coast-to-coast penetration into the American markets, and the ability to connect with international flights from South America, United Kingdom, the Far East, and continental Europe.
Further, a 2006 World Bank Report on this subject suggested that:
The Caribbean is falling behind worldwide tourism growth, largely because of poor airlift and high fares.
Liberalisation and fair competition in the market are essential.
State-owned airlines must operate commercially.
That the Caribbean should adopt 'public-service obligation' routes, where countries wanting commercially unviable routes would subsidise them directly through contracts after a tender process - removing the burden on airlines and the states that own them.
The region is yet to come up with a response.
There is need for a regional carrier supported by regional governments, because commercially, it may not be as competitive as the legacy carriers that serve the area. Revenue and seat support are needed.
If we are serious about improving the lives of the average citizen in our countries, and facilitating the improvement of airlift that we all agree facilitates arrivals and results in the employment of people, what are we doing to make this happen?
The social factors likely to influence tourism and travel in the coming years can be divided into three subcategories:
Unprecedented social and demographic shifts are having profound effects on virtually every social institution. These variables include:
Population and ageing.
Changing social structures.
Aspirations and expectations.
Values and lifestyles.
Changing work patterns.
These changes will affect who will come and what services they will require of us.
Visitors will also be affected by the realities of the social realities in our countries and our cultures. For example, issues of crime and violence, especially associated with the illegal drug trade, have the potential to severely affect both the image of the region and demand for travel to the Caribbean. On the other hand, our unique cultures and traditions in handicraft offer important business opportunities.
Craft development is a case in point. Jamaica's tourism has traditionally been complemented by a thriving craft industry that has provided livelihoods for thousands of Jamaicans, strengthened inter-industry linkages, and added value to the local tourism product.
In recent decades, however, the craft industry has declined not only in terms of product quality, but also its economic contribution and its role in tourism. Indeed, we are the only region in the world without a very substantial craft-development programme. We don't even have a UNESCO programme! Our craft traders are selling items from Asia to our visitors!
If we are serious about improving the lives of the average citizen in our countries and facilitating the improvement of craft development that we all agree provides employment, what are we doing to make this happen?
PART TWO NEXT WEEK.
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