Printer Friendly

TOURISM SECTOR UPDATE.

Long one of the three pillars of the national economy (along with bauxite and agriculture), Jamaican tourism continues to grow despite serious challenges, reports the U.S. Embassy-Kingston in a recent report, excerpts of which follow:

Violent crime and environmental degradation have not dampened the robust sector. However, budgetary constraints that limit Government marketing support and stiff competition from new destinations threaten to erode demand. Despite overall increases in the numbers of visitor arrivals, increasing hotel and room capacity has led to declining occupancy rates;

Tourists coming to Jamaica have changed over time as well, as a few wealthy socialites gave way to throngs of Spring Break revelers. In response, both public and private sectors are trying to improve the Jamaica's tourism competitiveness and to address weaknesses. Export opportunities abound in consumer and capital goods for the hospitality industry. Significant potential for development of new tourist spots still exists;

Jamaica's tourist profile

During the past decade the Caribbean enjoyed a 5.5% average annual growth rate in tourist arrivals, higher than the 4.2% global average. Jamaican performance fell between the two, with tourist arrivals (overnight stopovers and cruise ship passengers) increasing by 4.8% annually over the past ten years. In 1999, Jamaica was the fifth most popular tourist destination in the Caribbean. The number of stopover visitors (who stay at least one night) increased by 2% in 1999 to 1,248,397 while cruise ship passengers increased by 13.5% to 764,341 over 1998. During the period Jan-Sept. 2000, stopover visits increased by 6% to 1,020,539;

Stopovers by destination: U.S. visitors dominate the Jamaican market. In 1999, 70% of the stopovers to Jamaica came from the U.S., 16.7% from Europe, 8% from Canada, 3% from the Caribbean, and 0.7% from Japan. Stopover arrivals from the U.S. grew at an average rate of 3.8% annually over the last five years. The geographical distribution of U.S. visitors to Jamaica in 1999 was: Northeast-Midwest: Connecticut 21,112; Illinois 53,899; Delaware 4,542; Indiana 13,481; Maine 1,598; Iowa 5,673; Maryland 29,367; Kansas 4,597; Massachusetts 23,287; Kentucky 4,974; New Hampshire 2,944; Michigan 29,865; New Jersey 51,364; Minnesota 13,867; New York 158,069; Missouri 17,204; Pennsylvania 43,912; Nebraska 3,142; Rhode Island 2,425; North Dakota 733; Vermont 1,338; Ohio 19,852; Virginia 17,323; South Dakota 853; Washington DC 4,737; Wisconsin 23,399; West Virginia 1,276. Totals: 363,294 and 191,539. South (Miami) and West: Alabama 7,145; Alaska 253; Arkansas 2,647; Arizona 3,677; Florida 118,617; California 40,452; Georgia 36,463; Colorado 5,864; Louisiana 7,408; Hawaii 172; Mississippi 2,746; Idaho 1,018; N. Carolina 16,432; Montana 527; Oklahoma 4,116; Nevada 1,837; Puerto Rico 1,570; New Mexico 926; S. Carolina 7,213; Oregon 2,270; Tennessee 11,103; Utah 1,182; Texas 37,064; Washington 4,100; Wyoming 384. Totals: 252,524 and 62,662. Total stopover arrivals by U.S. residents: 870,019;

Age distribution: About 31% of stopover arrivals, are between 35-49, 27% between 25-34, 13% under 18, 11% between 18-24 and 4% over 64;

Duration of stay: According to the Jamaica Tourist Board (JTB), the average length of stay peaked in 1996 at 11.1 nights. Since then, the average has declined to 10.3 nights in 1999. Among foreign visitors, the average length of stay was highest from the U.K. (18.1 nights). This was followed by continental Europe (13.3 nights), Canada (12.4 nights), the Caribbean (11.6 nights), Latin America (8.8 nights), and the U.S. (8.5 nights). Proximity to the U.S., income and cultural "habit" may be responsible for the short lengths of stay among American tourists in Jamaica;

Seasonality: The winter season, from mid-December to mid-April, is generally the best tourist season for Jamaica. However, the seasonality of Jamaica's tourism is less and less pronounced. Attractive packages, incentives and entertainment programs for summer period have made "off-season" travel more popular. Jamaica's Reggae Sunsplash festival, carnival, golf tournaments, a kite festival, and an Ocho Rios jazz festival draw tourists outside the December to April "high season";

Accommodations, occupancy levels

Hotels: Jamaica has a variety of hotel establishments. In 1999 the island boasted 48 all-inclusive resorts with 8,903 rooms and 145 non all-inclusive hotels with 6,532 rooms. of these 193 hotels, 61.7% have less than 50 rooms, 16.6% between 51-100 rooms, 10.4% between 101-200 rooms and 11.4% over 200 rooms. Negril has the highest concentration of hotels (27.5%), followed by Montego Bay (26.9%), Ocho Rios (21.2%, Kingston (10.9%), Port Antonio (7.8%) and 5.7% in the south coast. However, in terms of room capacity, Montego Bay has the largest share followed by Ocho Rios, Negril, Kingston, Mandeville and the south coast, and Port Antonio;

New resorts are opening all over the island. The family-oriented FDR Pebbles (96 rooms) on the north coast and the exclusive Ritz Carlton Hotel (430 rooms) in Rose Hall (Montego Bay) commenced operation in March and August 2000, respectively. Emerald View Resort (14 rooms) in Montego Bay is expected to open soon. Other major projects expected to come on stream in 2001 include: Hotel Riu Tropical Bay (380 rooms) in Negril, Robins Bay Beach (71 rooms) in Ocho Rios, and Sea Spa Resort (20 rooms) in Ocho Rios;

Hotel room occupancy in 1999 was 57%, an indication of excess capacity. However, bookings for the 2000-2001 tourist season indicate much higher occupancy rates. Occupancy levels also differ by region. Negril registered the largest occupancy levels (62.1% based on their respective capacity) followed by Montego Bay and Ocho Rios (59.5% each), Kingston (44%), Mandeville and south coast (37.5%) and Port Antonio (23.4%);

Other accommodations include 316 guest houses with 2,444 rooms, 1,214 resort villas (private homes and vacation houses rented out when the occupant is not using them) with room capacity of 3,760, and 457 apartments with room capacity of 1,428. Moondance Villa in Ocho Rios (10 rooms) and Palm Hill Villa in south coast are scheduled to open within weeks. Mais Oui Villa (5 rooms) in Ocho Rios, Parrottee Villas (24 rooms) on the south coast and Sandwood Villas (16 rooms) and Golden Shores Resort (15 rooms) in Port Antonio are scheduled to start operation later in 2001. Although official figures are not available on occupancy levels for this category, observers hint there may be excess capacity and expressed great concern over stiff competition from larger hotels and resorts;

Airlines: Air Jamaica, the national carrier, has its hub in Montego Bay. It is quickly becoming a dominant airline in the region. Air Jamaica has become the de facto national carrier for Barbados and several Eastern Caribbean states. It serves several U.S. cities too. attempts to jump-start passenger open skies talks with the Jamaicans have broken down over Air Jamaica's position that intra-regional flights should be treated as cabotage;

Other major scheduled airlines serving Jamaica include: Air Canada, Air Europe, A.L.M., American, British Airways, BWIA, Cayman Airlines, Copa, Condor, Cubana, Delta, LTU, Martin Air, Miami Air, Northwest, Sky King, Tropical, Transworld Airways, and U.S. Airways. Most airlines fly exclusively to Montego Bay with tourist traffic. In addition, chartered flights (numbering over 85 in 1999) serve Jamaica frequently. In an effort to tap into increased demand for travel to and from fast growing tourist destinations, small domestic carrier Air Jamaica Express (with capacity of 39 seats per flight) operates six days a week to Havana and five days a week to Turks & Caicos islands;

Cruise tourism: Given potable water supplies and refueling and other port infrastructure, Jamaica is ideally suited as a cruise ship destination. During the period Jan- Sept. 2000, cruise passengers increased by 21.3% to 664,747. Some local observers argue, however, that given visitor harassment, crime, the limited number of tourist attractions and a "head tax" on each debarking passenger, Jamaica risks losing its appeal as a cruise destination;

After suffering an unfortunate heavy handed police search of passengers suspected of carrying drugs in late 1999, one cruise ship captain who had docked his vessel in Port Antonio (the first such arrival in years) vowed never to take his ship back to Jamaica. Major cruise line Carnival announced it was suspending its Crown Princess' weekly trips to Montego Bay in April 2001; it has replaced the Jamaica stop with port calls in Panama. Other cruise lines that continue to serve Jamaica include: Royal Caribbean, Commodore, Dolphin, Celebrity/Fantasy, Princess, Regal, Norwegian, and Mediterranea Cruise Line;

Changing face of Jamaican tourism

Once the playground of the rich and famous, Jamaica hosted exclusive clientele who wanted a quiet place to get away. John and Jacqueline Kennedy honeymooned here. Ian Fleming and Errol Flynn vacationed here. The tourist sector in Montego Bay and Port Antonio thrived on this kind of visitor during the 1950s and 60s. Eventually, word of Jamaica's charms got out. The number of tourists increased. Cruise ships made more frequent stops. There was a democratization of Jamaican tourism in the 60s and 70s. Major investment in hotels and related tourism infrastructure followed. Jamaica began hunting greater numbers of less exclusive tourists. It was quite successful;

When political violence rocked the island in the late 1970s, tourism suffered. Tour operators began selling packages that did not mention Jamaica. Locals tell of tourists, booked on vacation packages to Negril in the 1970s and 80s who thought they were going to a separate island. Jamaica began relying on "all-inclusive" tourism in the 1980s. These resorts are self-contained entities that provide all accommodations, food, entertainment, and amusements. Guests never need to leave the confines of these secure compounds. All-inclusives have been such a success that Jamaican resort chains have begun investing in similar facilities in other parts of the Caribbean;

Aging tourism infrastructure and loss of novelty meant Jamaica was forced to seek lower and lower end tourism through the 1990s. Students on Spring Break and young European backpackers on tight budgets made up a larger percentage of Jamaican tourists. While numbers of arrivals and stopovers continued to climb, the amount of money spent per person per night fell. Only in the late 1990s did exclusive tourism begin to rebound, both in the all-inclusive model and in new, non-all inclusive but expensive and exclusive resorts. Villa complexes that cater to a new generation of rich and famous dot the island. This latest development seems to be the future for Jamaican tourism in the short run;

Minister of Tourism and Sport Portia Miller-Simpson has a different vision for tourism in the long run. She wants to integrate the Jamaican people and their culture with traditional tourism. She wants all Jamaicans to embrace the idea of welcoming tourists into their country and community and to contribute to a national Jamaican experience beyond beaches and rum-based drinks. Mindful of environmental degradation, she advocates nature-friendly eco-tourism. Innovative initiatives such as a Marine Park and Entertainment Center in Ocho Rios and an historical heritage tourism center in the old pirate capital Port Royal also figure into Miller-Simpson's scheme;

Environment

A deteriorating natural environment threatens Jamaica's reputation as the "land of sun, sand and sea." Over 80% of the coral reefs of Negril and Montego Bay are reported to be dying. Many beaches are threatened with wave erosion. Some areas reportedly have lost as much as 300 feet of beach over the last two years. Water quality in Ocho Rios and important attractions such as Dunns River Falls is poor. Deforestation is becoming a major problem in the Blue Mountains and cockpit country. Poor sewage and solid waste disposal practices and lax enforcement of regulations contribute to the environmental degradation. Budgetary constraints often have been cited as the cause for inconsistent implementation of effective programs;

The Government of Jamaica has now started seriously looking into these problems and has begun planning for implementation of sanitary landfills and related activities with the assistance of the Inter-American Development Bank. In 1999, the Green Globe Program was initiated under the Environmental Audit for Sustainable Tourism (EAST) program. Environmental audits (with support from USAID) are now being carried out on hotel properties and attractions in an effort to improve the tourism product. Some groups are promoting alternative tourism packages that draw visitors away from heavily traveled beach areas, such as mountain biking and hiking in the Blue Mountains or historic and cultural tourism to Maroon areas or remote colonial "great houses";

Economic impact

Earnings: Tourism is Jamaica's largest foreign exchange earning industry. Gross foreign exchange earnings doubled in a decade to US$1.2 billion (1999). When compared with the Caribbean, Jamaica ranked seventh in tourism receipts after Cancun, Dominican Republic, Puerto Rico, Bahamas, Cuba, and Venezuela. In 1999, average expenditure per stopover visitor per night amounted to US$99. Of this total, 59.2% was spent on accommodation, 10.9% on shopping, 9.7% on entertainment, 6.3% on food and beverage, 5.9% on transportation, and 8% on miscellaneous items. Average expenditure per person among cruise passengers amounted to US$80. Tourism employees' income provides greater purchasing power for Jamaican households and bolsters Government tax revenues;

Employment: According to the JTB, in 1999 30,325 people were directly employed in the accommodation sector. An additional 35,000 people are estimated to be employed in tourism-related activities including restaurants, night clubs, tour operators, attractions, car rentals, taxi operators, duty-free shops, crafts and other retail stores, sports and recreation facilities, airports, sea ports, related government employment, builders, technicians, and miscellaneous services. Indirect beneficiaries include those in the agricultural, manufacturing (t-shirts, souvenirs), and entertainment, sectors. It appears more employment is created in these indirectly related sectors than direct employment in tourism. Overall, visitor expenditure supports an estimated 65,000 to 75,000 direct job opportunities, constituting about 8% of the total employed workforce;

Government revenue: In 1999, receipts from the head tax on cruise ship passengers amounted to US$11.5 million. Based on per capita expenditure of stopovers and cruise ship passengers, an estimated US$28 million was generated through general consumption tax (a VAT-like sales tax). In addition, the Government earned an estimated J$1.7 billion through travel tax. Based on the above information, direct effect of tourism accounted for 4.4% of Government's tax revenue. Indirect and induced effect of income generated there contribute additional revenue for the Government from other sectors;

Fiscal incentives: the Government offers incentives to investors through the Hotel Incentives Act (HIA), the Resort Cottages Incentives Act, and concessionary financing through local Ex-Im Bank and National Development Bank;

(a) Hotel Incentives Act (HIA): The owner, tenant or operator of an approved hotel enterprise (by Jamaica Promotions - JAMPRO) is entitled to income and dividend tax relief for up to ten years. The owner may also receive an exemption from import duties for constructing or expanding hotels. To be eligible for benefits, hotels must have at least ten rooms and facilities for other activities. This was recently extended to those less than ten rooms. Exemption from general consumption tax is also granted under the modernization of industry program for refurbishing activities. Income tax relief is granted for 15 years to hotels that meet certain qualifications: they must have 350 or more rooms, facilities for holding conferences, be operated by a qualified general manager and maintain adequate security;

(b) The Resort Cottages Incentives Act: This act allows for income and dividend tax relief and the duty free importation of articles required to construct and equip resort cottages for a period of up to seven years;

OPIC: The U.S. Overseas Private Investment Corp. (OPIC) offers a broad range of project financing, investment insurance and other investor services to U.S. investors. OPIC was instrumental in bringing Ritz Carlton's new Rose Hall facility to fruition;

Weaknesses

Although the sector's performance has improved over the last decade, the rate of growth (arrivals, expenditure and occupancy) has been slow, particularly over the last few years. The main factors influencing the lower levels of growth are:

- competition from established and newly-emergent destinations;

- negative media reports on harassment, crime and violence;

- weak road and transportation infrastructure in some resort areas such as Port Antonio;

- Inadequate budget for advertising and promotion;

- Lack of adequate attractive areas for relaxation and entertainment outside the main resort towns of Montego Bay, Ocho Rios and Negril;

- Poor public services in the resort towns;

- Poor development of nature, health, heritage and cultural products;

- Low presence of large international hotel chains including those specializing in gambling, meetings/conventions;

- Room numbers growing faster than visitor numbers, resulting in a high and growing proportion of room stock in small hotels;

- Over reliance on the U.S. market;

- Relatively high costs.

While North American arrivals continue to grow, European tourism flows are shrinking. German arrivals dropped 50% in 2000 (from 40,000 to 20,000 in the first three quarters). Several European charter flight companies have scaled down or ended service to Jamaica. Local observers blame the weak euro, but European tour operators say the fall in European arrivals began before the euro's slide. European tourists are opting for cheaper Caribbean destinations such as Cuba and the Dominican Republic;

Crime is a problem that cannot be ignored. A recent Pricewaterhousecoopers study showed crime and harassment are the number one concerns of hoteliers in Jamaica. Recent Government efforts to curb crime have been ineffective. The private sector has taken up the issue. Through its various chambers and groups, Jamaican businesses hope to turn the tide on rampant crime on the island;

Business opportunities

Jamaica is an import-oriented and -dependent economy. Almost all raw material, consumer and capital goods are imported. In 1999, total imports amounted to US$2.9 billion. About 50% of total imports come from the U.S. Almost all items except for some food, beverages and some construction material used by the hotel industry is imported. Considering the size of the market, there is good opportunity for exporters wishing to serve the hotel industry. The Government is currently in the process of upgrading all solid waste sites in Jamaica with funding from IDB. The Government is also seeking assistance from IDB for the development of south coast as a tourist destination; Companies seeking further business information on the above listed projects are encouraged to contact: The Planning Institute of Jamaica, 10-16 Grenada Way, Kingston 5, Jamaica. Tel: 876 906 4463/64. Email: doccen@mail.colis.com. Fax: 876 9064465;

There is an ambitious US$150 million plan to develop Port Royal (near Kingston) as a multi-media interactive, historical tourism destination. The project, based on Port Royal's historic ties to pirates and 17th century Caribbean colonialism, will include entertainment venues, modern accommodations, a retail center and eco-tourism. A new cruise ship pier and major historical reclamation activities at colonial sites are planned. The responsible agency has been seeking investors for several years. Some observers are skeptical the vision will ever be realized. Development of Port royal as a tourist destination would offer opportunities for architects, engineers, and exporters of various consumer and capital goods items. Details: Mr. Robert Stevens, Port Royal Development Co. Ltd., 110 Old Hope Road, Kingston 6, Jamaica. Tel: 9784166

Prospects

Tourism will continue to be a mainstay of the Jamaican economy. Tourism officials recognize the challenges facing the industry and are making concerted efforts through environmental management programs, security and anti-harassment programs, promotion of community based tourism, development of infrastructure in order to make Jamaica a favored destination. Neighboring Caribbean islands are fiercely competitive. Cheaper and more exotic, Cuba and the Dominican Republic are already luring many European tourists away from Jamaica;

Investment incentives should bring new, modern facilities to the island. Future plans for development of Port Royal facilities and other projects supported by creative non-traditional strategies including eco-tourism, heritage tourism, and sports tourism augur well for the future of Jamaica's tourism. However, the success and sustainability of tourism in Jamaica will depend largely on the ability of both public and private sector to develop a strategic plan and well-coordinated approach to deliver a high quality and diverse product along with strong support services.
COPYRIGHT 2001 Caribbean Update, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Caribbean Update
Geographic Code:5JAMA
Date:Apr 1, 2001
Words:3389
Previous Article:CALENDAR.
Next Article:PRIVATIZATION IN JAMAICA.
Topics:


Related Articles
Kenya's bold campaign.
Everything You Always Wanted to Know About Tourism in Utah [*].
TOURISM "A HIGH PRIORITY.".
Attracting Americans.
Experts laud impressive growth of KSA tourism and travel sector.
Elaf Group unveils new privileges to spice up summer 2008.
Experts laud impressive growth of KSA tourism and travel sector.
Elaf Group unveils new privileges to spice up summer 2008.

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters |