Who Pays To Promote The Caribbean?

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 By David Jessop

CaribWorldNews, LONDON, England, Weds. Feb. 3, 2010: Who pays to promote the Caribbean as a destination that tourists should visit?

Is it governments through general taxation, or is it the hoteliers and those in the private sector who benefit from the industry`s success? Alternatively, should it be the visitors that pay, through increases in already high tourism taxes, or those that carry them to the region; the airlines and the cruise ship companies?

The issue is a complex one. Governments already incentivise financially airlines to provide services and seats into the Caribbean, and support cruise ship companies in other ways. For their part, hoteliers fund the marketing efforts of tour operators who promote their properties, while the tourist has to meet the cost of a wide range of environmental, ticket and other taxes at the point of departure. In all cases, governments, hoteliers and visitors are close to reaching the limit of their ability to pay.

Nevertheless, finding the funds to promote the region and individual destinations has become of critical economic importance because of the now central role that tourism plays in almost every nation in the region.

Since early 2008, tourism arrivals in the majority of Caribbean nation have been declining due to the severity of the global recession. The effect has been evident in job losses, low season closures, falling profits and declining government tax revenues.

While there are weak signs of economic recovery in most visitor supplier nations, the World Travel and Tourism Council (WTTC) is forecasting continuing uncertainties for global travel and future low levels of tourism growth (they estimate 0.3 per cent in 2010).

This is particularly alarming when seen in the light of the industry`s overall economic role in the region. According to the WTTC: travel and tourism`s contribution to the Caribbean GDP in 2009 was US$39.9bn or 14.5 per cent ; some 2m workers are directly employed in the industry making it the largest employer outside the public sector; and the industry generates revenue equivalent to 18.6 per cent of total Caribbean exports and 22 per cent of total investment.

Moreover, while there are variations by island and by hotel, the occupancy levels in the region have fallen by between 5 and 15 per cent and the average daily rate charged is down by between 10 and 20 per cent. Industry sources suggest that while most hoteliers and operators in the sector survived the cash generating winter season and continued to pay their suppliers on time, some have not been able to build up a buffer for the leaner summer season, leading to a concern that a wave of financial difficulties could affect the industry in 2010.

Despite widespread acknowledgement of these problems and a recognition of the need to promote the region, it now appears that neither Governments nor the industry have the wherewithal to invest more in marketing and image building to increase visitor arrivals.

As a consequence, the Caribbean Hotel and Tourism Association (CHTA) has been proposing that Governments support a regional marketing fund through a US$10 air and cruise ticket tax levied on all visitors and then divided between a national and regional fund. This they argue would reflect Caricom commitments since 2001 to establish a regional tourism marketing fund, and should be dedicated to supporting tourism sustainability.

The idea of such a tax has caused a spirited industry debate between those who believe that any further charges on visitors would be near suicidal; those who point to the inequity between stay over visitors arriving by air who are penalised by taxes while those who arrive by cruise ship pay little or no tax at all; and those who are sceptical about Governments` ability to meet their commitments or deliver effectively what is required. The debate also illuminates the differences between those seeking national solutions and those who see value in marketing the region as a whole.

What all seem agreed on is the necessity of a marketing fund, if not on the means to raise the money and deliver a programme.

For its part CHTA, which initiated the public debate through the comments of its President, Enrique de Marchena, has noted that it welcomes alternative suggestions.

This is good as the issue deserves a much wider debate involving Caribbean academics, citizens and workers in the industry who benefit directly or indirectly from the income derived nationally and regionally from tourism.

At face value the issue is about a tax on foreigners, enhancing regional competitiveness, and who should pay, but it is also about whether there is the political will to deliver a regional solution and why there is an absence of trust that tax dollars will be spent effectively.

More broadly it touches on the growing global interest in nation branding which, in the absence of differentiation of nations by ideology or policy, is coming to be seen as the best way to enhance political, economic and commercial objectives.

In outline the concept, which goes far beyond tourism destination marketing, is to develop a multi-faceted campaign that seeks to integrate the values and ethos of a nation or region into a `brand` that supports economic growth and identity at both a domestic and global level. In this way, it is suggested, the ability of a nation or region to compete for investment, tourism, consumer respect, media attention and international engagement can be enhanced while actively supporting both the hard and soft power a nation or region wishes to deploy.

Finding a solution as to who pays for a strategy that will increase visitor arrivals in the region is challenging.  However, even if there is no answer it might usefully encourage a much wider debate on how the people of the region and the nations within in it see themselves and how they wish to project all that is unique and special about the Caribbean in the wider world.

David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.org. Previous columns can be found at www.caribbean-council.org.

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