Caribbean: Things are bad, the future is uncertain, time to act is now


SAN JUAN, Puerto Rico — The Caribbean is unique in many ways. Its more than 7,000 islands, islets, reefs and cays boast a level of natural beauty that surpasses much of the world, while playing host to hundreds of distinct cultures, each with its own customs, characters and culinary bounty.

But within the context of gross domestic product, the Caribbean is unique for a less enviable reason: It relies extensively on travel to fuel its economy.

“The Caribbean is uniquely dependent on tourism,” said Robert Crandall, former chairman and CEO of AMR Corporation during the opening keynote session of the 14th annual Caribbean Hotel & Tourism Investment Conference. “Of the 10 countries in the world most dependent on travel and tourism, seven are in the Caribbean.”

When the travel and tourism industries are booming, that dependency isn’t so bad. But throw in 20-plus months of discouraging bust, and the region’s hotel industry has been left reeling.

There’s never been a greater need to take action, Crandall told the more than 300 attendees at the Puerto Rico Convention Center. Not only are things bad now, but the future is uncertain: The Caribbean’s feeder markets (e.g. the United States, Canada and some Eurozone members) are facing high unemployment, a slowdown in stimulus spending and incredible public debt.

Furthermore, consolidation in the airline industry makes an increase in desperately needed airlift unlikely.

“You need to do all you can to strengthen your value proposition since travel and tourism is the lifeblood of your economies,” Crandall said. “You need to do everything you can to make a visit to the Caribbean as outstanding as it can be.”

Here are some of his suggestions to help get started:

1. Come together.

The most important step to bolster the Caribbean’s tourism and hotel industries is for the various governments to form a united front and take action, Crandall said.

“Because of both ignorance and bias, many public officials are unaware of the economic benefits of the increase of tourism and how its impact filters down to every level of the community,” he said.

Instead, there needs to be a concerted action to educate officials. Every country should be provided with economic briefing tools to explain the importance of travel to every leader or member of every department within every government. Only by doing so will this knowledge bleed into actionable public policy.

Crandall offered some examples of areas that should be improved through public policy:

Immigration: The Caribbean needs to make a collective effort to improve the friendliness of immigration and border officials, minimize the amount of time spent in the process and the number of forms that need to be filled out. Visitors should feel welcomed, not shut out.

Internet connectivity: Every destination that hopes to attract tourism needs to come to grips with the reality that we live in a connected world. Strong Internet connectivity isn’t a value add; it’s a must.

Public services: There is a minimal level of public services that tourists expect. Streets should be safe and free of garbage.

2. Promote a regional brand.

While the unique characteristics of every island within the Caribbean are important, the region’s separate parties cannot afford to compete against one another. Instead, they should band together to form a united marketing campaign, one that promotes their collective bounties as a world-class destination, Crandall said.

3. Stop taxing your own exports.

Travel and tourism often are not recognized as export products, but they should be, Crandall said.

“You derive revenues from abroad in exchange for a domestic product or service,” he said. “That’s the definition of an export.”

In most cases, exports are encouraged, not taxed. But in the Caribbean, governments tax the tourism product heavily, therefore reducing the amount of the product tourists are willing to buy. That needs to stop, or at least be alleviated, Crandall said.