Caribbean Tourism: Move Over “Recovery,” Hello “Growth”

As is becoming commonplace in the travel industry as we head into the final months of 2022, many companies, agencies and beyond are telling us they are beyond the “recovery” phase and are now geared towards “growth.” The same goes for the Caribbean, Travel Agent learned this week.

Ahead of the 40th edition of Caribbean Hotel & Tourism Association (CHTA) Caribbean Travel Marketplace (to be held October 4-5) in San Juan, Puerto Rico, many industry stakeholders attended the Caribbean Travel Forum on Monday, October 3. Held at the Caribe Hilton, the event focused on the business of tourism in the Caribbean; it included conversations about air connectivity and multi-destination marketing, sustainability, technology innovations, labor market constraints and taxation, among other. The forum began with “The State of the Regional Industry” address by CHTA President Nicola Madden-Greig, who shared insight and data into how the region has bounced back from the COVID pandemic and its goals moving forward.

When it comes to the positives, Madden-Greig reported that the tourism sector grew by 36.6 percent over 2021, in terms of GDP ($39.3 billion; 9.1 percent of the total economy for the region). Although that number remains below 2019’s levels ($61.5 billion; 13.9 percent of the GDP), the numbers are heading in the right direction following the pandemic. To note: In 2021, the region added 311,000 new jobs (an increase of 15.2 percent from 2020).

“For the last two and a half years, it has been a struggle, and we’ve gone through the recovery and we are moving towards growth,” Madden-Greig said.

She added that, according to the World Travel & Tourism Council (WTTC), the baseline scenario for the Caribbean is an average annual growth rate of 5.5 over the next decade—more than double the global average of 2.4 percent. That would create 960,000 new jobs by 2032. “Scenario 2” would see the Caribbean achieve a 6.7 percent growth rate, which would result in a GDP for the region of $96.6 billion (up from $50.5 in 2022). As for employment, this route would create 1.34 million new jobs.

“Those are not numbers to play with—those are significant numbers,” she said. “The Caribbean, ladies and gentlemen, is indeed special.”

According to data by ForwardKeys, the Caribbean was the only region globally to outperform 2019 summer levels (June through August) this year (+2 percent). Nowhere else was in the black. Globally, the average for summer air arrivals was -31 percent. The most resilient countries in the Caribbean based on international arrivals compared to 2019 were:

  • United States Virgin Islands (+36 percent)
  • St. Maarten (+16 percent)
  • Martinique (+13 percent)
  • Turks and Caicos (+11 percent)
  • Guadeloupe (+9 percent)

Looking at Q3 of 2022, those numbers are still looking pretty good. The Caribbean was up 3 percent over 2019 levels—again, the only region globally to be up over pre-pandemic levels. Global international arrivals were down 39 percent. Turning towards the end of the year, the Q4 outlook is “even rosier,” as the region expects to be up 15 percent compared to 2019 level.

As for the average passenger profile, it does look very similar to pre-COVID. The average passengers per booking is three people (same as previous), the average length of stay is 10 days (also the same) and the average lead time is 77 days (up five from pre-pandemic). “We’re not only recovering in terms of our numbers, but we have recovered in terms of our patterns, as well,” Madden-Greig said.

The question, though: Is this borrowed traffic? As in, while other destinations remain(ed) closed, did the Caribbean benefit from opening up, even with various sets of travel restrictions on a country-by-country basis? If you ask Madden-Greig, she would say, ‘no.’ If you look at the Q4 numbers, Caribbean tourism is up 15 percent (up from +3 percent in Q3, both compared to 2019). But it's not the only region that's improving. The Americas moved from -24 percent in Q3 to -15 percent in Q4, Europe from -31 to -25 percent, Africa and the Middle East from -19 to -1 percent, and Asia Pacific from -72 to -58 percent. All regions are recovering; if the Caribbean had only seen the improvement from "borrowed" travelers, the region would be in decline as the others gained.

“With everything that we have done in terms of upgrading our rooms, our attractions or destinations in general, the Caribbean is coming out as the destination of choice,” she said. “But we must ensure that it continues to be the destination of choice into 2023 and beyond.”

Driving the strong performance has been travel from the United States and Canada, which makes up 73 percent of all overseas arrivals to the Caribbean. For Q4, travel from the U.S. and Canada is up 19 percent compared to 2019. Curacao (+68 percent), the Dominican Republic (+58 percent) and the U.S.V.I (+34 percent) are seeing the largest increase of travelers from the U.S. mainland in Q4 2022.

It’s also good to know that premium cabin classes are leading the recovery. Versus pre-pandemic levels, premium classes are up 27 percent, while economy is up just 1 percent. (The U.S. (+32 percent vs. 2019) ranks fifth on the list of fastest growing origin markets for premium class arrivals.) What this means, according to Madden-Greig is the Caribbean is seeing a luxury traveler who is willing to visit the destination and it “must be able to match the products and services … to continue to attract this segment and bring more value to our organizations, to our nationals and to our bottom line.”

As for the hotel pipeline, the region has 158 properties in 20 countries coming on board in the next few years, accounting for 30,165 rooms. “The Caribbean is definitely in the spotlight,” added Madden-Greig.

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