The Dec. 2016 Quarterly Statistical Review is available to CTO government members at their site. Please email Sharon Coward ([email protected]) for access if you are a government member and require a login. Please contact Paula Harris ([email protected]) if you would like to purchase the review.
Caribbean Tourism Industry Performance Report 2016
Presented by Hugh Riley, Secretary General
Thursday 9 February, 2017
Caribbean tourism continues to break new ground, surpassing 29 million arrivals for the first time in our history, and once again we have grown faster than the global average.
Despite political uncertainties, security and economic challenges in our main source markets, tourist arrivals to the Caribbean increased by 4.2 per cent in 2016, better than the 3.9 per cent overall, internationally.
Encouragingly, we welcomed over one million more visitors last year than in 2015, to reach 29.3 million, continuing our proud record of growth for the seventh straight year.
In addition, cruise passenger arrivals grew by an estimated 1.3 per cent, to approximately 26.3 million.
The United States continued to be our primary long-stay market, increasing by three-and-a-half per cent and providing just about half of all arrivals. But while figures from the U.S National Travel & Tourism Office for the month of November showed that the Caribbean’s share of the U.S outbound market was second only to Europe, the growth rate was the slowest among all regions.
For the Caribbean it was from Europe where we saw the strongest growth. Despite terrorist attacks in some countries, the Brexit referendum in the UK and bumpy economic outcomes across continental Europe, Caribbean arrivals from UK/Europe climbed by over 11 per cent, to reach 5.6 million, with the UK registering a growth of over four per cent, and Germany up by more than eight per cent.
The strong European performance was evident in the healthy increases of between 6 per cent and 16.8 per cent in each month, compared to the corresponding months in 2015.
The vexing issues of costly and fragmented intra-Caribbean travel were still in place last year. However, travel within the region increased for the second straight year, a clear sign of the interest by Caribbean people in taking vacations to their neighbouring countries.
Conversely, Canada, a strong and reliable market for us during the challenging recession years, was uncharacteristically feeble last year, recording a drop of nearly 3.5 per cent when compared to 2015.
No doubt, we are proud of our region’s performance in 2016 – the result of the combined efforts of our member countries, the CTO and our partners, who planned and executed a number of attractive and excellent programmes and activities to attract visitors and have them talking and writing and sharing images about the Caribbean.
Our Year of Romance, for example, received broad participation despite the threat of Zika, and our social media campaigns in support of the year reached over 20 million people.
Still, we had our shortfalls; our region did not break the 30 million arrivals barrier we had hoped for; but at 29.3 million there is still reason to celebrate.
Among the countries reporting increases, growth was uneven, ranging from flat, to as high as 19 per cent; while about one-fifth of the countries reported declines.
Our hotel partners also experienced negative results when compared to 2015. These are important metrics which require particular attention. While it is critically important to monitor the numbers of visitors we welcome to our shores, knowing where they stay, how long they stay, what they spend and what contribution they make to the overall economy are all vital data points.
According to Smith Travel Research, all hotel indicators were down, with the exception of the number of available rooms, which grew by just over one per cent. We’ll share more details on that, in the presentation which follows.
In conclusion, no doubt, 2016 will be remembered as another successful year for the Caribbean’s main foreign exchange earner, with new record levels of visitor expenditure, tourist- and cruise-passenger arrivals.
But the year will also be remembered as a challenging one for the hotel sector which continues to be under pressure.
In the months ahead, we expect that tourist arrivals to the region will grow at a slower rate; between 2.5 per cent and 3.5 per cent in 2017. We also project increases of between 1.5 per cent and 2.5 per cent in cruise passenger arrivals. So all things being equal we’re expecting growth in 2017, but it will not be robust.
I will now ask our Acting Director of Research, Ryan Skeete to dissect the numbers and give us his analysis.
CTO State of the Industry Report 2016 – Dissecting the Numbers
Presented By Ryan Skeete, Director of Research & IT (ag)
I am going to discuss, in greater detail, the Caribbean tourism performance in 2016 and what to expect in 2017.
2016 marked another record setting year as for the first time in our history we received over 29 million arrivals. This is also the 7th consecutive year of growth and our estimated 4.2% increase in tourism trips is the 3rd consecutive year above the global growth rate.
Moreover, the average annual growth rate over the last 7 years slightly exceeded the average annual global growth rate of international trips. The performance in 2016 was primarily supported by sustained economic growth in the US, our main source market, and relatively low oil prices.
Following an increase in the Caribbean market share of global visits in 2015, rising by 0.1 percentage points, it remained steady at 2.4% in 2016.
Nevertheless, negative events such as a weak Canadian dollar and the most active hurricane season since 2012, especially in October, no doubt contributed to preventing our region from reaching the coveted target of 30 million arrivals.
Among the destinations, tourist arrivals showed uneven growth. Of the 28 destinations reporting data for varying periods between January and December, 22 recorded increases ranging from quite modest to a robust 17.5% (the Turks & Caicos Islands), while the remaining six destinations experienced declines. Besides Turks and Caicos Islands, 4 countries, Belize, Cuba, Guyana, and Bermuda reported double digit growth rates.
The contributing factors to these performances included greater air access from the source markets to the region and the realization of significant investments to enhance infrastructure (airport redevelopment) and product (hotels).
With the exception of the Dutch Caribbean (-5.6%), the major Caribbean sub-regions reported healthy growth.
The Other Caribbean countries’ market, which accounts for almost half of all arrivals to the region, recorded the fastest growth rate (7.4%) in 2016.
The Commonwealth Caribbean and French Caribbean grew by 4.1% and 4.2%, respectively.
A further look into the performance of our major source markets reveals that demand for Caribbean vacations rose in all of them, except Canada, which fell by 3.4%. A weak currency and sluggish first half economic output contributed to the decline in Canadian trips to the Caribbean. More than 70% of the reporting destinations reported decreases in arrivals from this market. Consequently, Canadian market share fell to 11.3%.
There were over 14.6 million U.S. visits to the region, 3.5% more than the previous year. This performance was attributed to solid economic growth, low unemployment rate and high consumer confidence in the US.
In particular, seven destinations recorded double digit increases within their reporting periods. This group includes Belize, the Turks & Caicos Islands, Bermuda, Antigua & Barbuda, Barbados, Grenada and Montserrat, while declines were recorded in six destinations.
Arrivals from the European market totalled 5.6 million and improved by an estimated 11.4%, the strongest growth among the main markets, in spite of terrorist attacks in some countries, the Brexit referendum and mixed economic outcomes across continental Europe. In total, 72% of the reporting destinations registered increases in arrivals from this market. The top performing destinations, which registered double-digit increases, were the Turks & Caicos Islands, St. Maarten, Guyana and Anguilla.
Caribbean intra-regional travel broke another record in 2016, as arrivals rose by 3.6% to register just over 1.7 million trips, the second consecutive year of growth. Robust double-digit growth was experienced in Guyana, St. Vincent & the Grenadines and the Turks & Caicos Islands.
The region received about 11% fewer tourist arrivals from South America in 2016 compared to 2015.
The improvement in arrivals to the Caribbean was not reflected in improved hotel performance. According to Smith Travel Research, the primary revenue metrics were slightly down.
The average daily rate (ADR) fell by less than a dollar to US$ 201.50 and revenue per available room contracted by 2.6% to US$ 134.48 while occupancy fell by 1.6 percentage points to 66.7%. This outcome reflects the rise of the sharing economy and additional hotel room stock.
However, it is important to note that the hotel revenue indicators are still above the performances recorded between 2012 and 2014.
2016 was also a record breaking year for Caribbean cruising, as, cruise passenger arrivals to the region grew by about 1.3% to reach 26.3 million, in line with expectations at the beginning of 2016.
Larger ships, port enhancements and new destinations on the Caribbean cruise itineraries helped to increase the attractiveness of Caribbean cruise holidays.
Overall, only 48% of the reporting destinations registered growth with the best performances occurring in the Dominican Republic, the British Virgin Islands and Grenada, which all grew by double digits, while Belize became the eighth destination to record over one million cruise passenger visits this year.
In total, the Caribbean received 33.7% of all cruise deployments in 2016.
Consistent with increases in stay-over and cruise visits, total visitor expenditure is estimated to have increased by approximately 3.5% to reach US$35.5 billion.
2016 saw the election of a new Republican Administration in the United States and the success of a referendum which mandates that the United Kingdom withdraw from the European Union. Both these events raise the level of global uncertainty, which could impact the performance of tourism in 2017 and beyond.
Cuba was the destination that offered the greatest growth potential. However, at the end of 2016, several US-based airlines, citing reduced demand, announced they were cutting some of the promised capacity for 2017 to the destination.
Altogether, we expect that tourist arrivals to the region will grow at a slower rate of between 2.5 and 3.5% in 2017.
Further expansion of the cruise industry is expected in 2017, as 26 new vessels with a combined capacity of over 30 thousand passengers are expected to sail from the shipyards. The anticipated rise in cruise passenger arrivals to the region is projected to be between 1.5% and 2.5%.
 Aruba, Bonaire, Curacao, Saba, St Eustatius, St Maarten.
 Cancun, Cozumel, Cuba, Dom Republic, Haiti, Suriname
 OECS + Bahamas, Barbados, Belize, Bermuda, Cayman Islands, Guyana, Jamaica, Trinidad & Tobago, Turks & Caicos Islands.
 Guadeloupe and Martinique
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