Public Disclosure Authorized

Report No. 566a

Caribbean Regional Study Volume Vla: Tourism -b V. O

Latin America and the Caribbean Region

Not for Public Use

Public Disclosure Authorized

Public Disclosure Authorized

Public Disclosure Authorized

June 9, 1975

Document of the International Bank for Reconstruction and Development International Development Association This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.

CuRENUi EQUIVALENT1

Exchange Rates Effective May, 1974

US$1.00

=

2.00 BDS$

(Barbados)

=

1.71 B$

(Belize)

=

2.18 G$

(Guyana)

= 0.91 J$ =

2.00 TT$

(Trinidad & Tobago)

=

2.00 EC$

(Eastern Caribbean-

o.50 US$ 0

1 BDS$

Note:

1

(Jamaica)

1 B$

=

0.58 US$

1 G$

=

0.46 US$

1 J$

=

1.10 US$

1 TT$

=

0.50 US$

1 EC$

=

0.50 US$

As of July 15. 1974. the currencies of Barbados, Belize, Eastern Caribbean, Guyana and Trinidad and Jamaica maintains Tnbago were linked with sterling. a parity relationship with the US$.

Avticritn

nr%mLn-rL

Grenadaj Mnntserrat; St. Kitts-Nevis-

Anguilla, St. Lucia, and St. Vincent.

TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS

.

. ..........................

THE EVOLUTION OF TOURISM IN THE CARIBBEAN

I.

...............

REGION ................

II.

.....................................

......

.

8

;......... * ...

THE CHARACTERISTICS OF SUPPLY IN CARICOM ................................ ISLANDS ....*...........

V.

.......... ...........

23

THE FUTURE GROWTH OF AND CONSTRAINTS ON SUPPLY ................

..

.........

29

THE COSTS AND BENEFITS OF TOURISM .............

41

AND DEMAND VII.

14

SEASONALITY AND THE PRICE COMPETITIVENESS OF CARICOM TOURISM ...........

VI.

6

THE CHARACTERISTICS OF DEMAND IN CARICOM ISLANDS

IV.

1

THE RELATIONSHIP OF DEMAND TO SUPPLY IN THE CARIBBEAN

III.

*...

i-v

.#..

.*.... .

APPENDICES 1. 2.

3.

4.

Proposal for Study of Hotels' Operating and Financial Data

1-15

An apnlication of Linear Programming to the Analysis of Barbados

1-10

Draft Physical Plan - Tourism Sector, Barbados (prepared bv the Tnwn and Country Planning Office. Barbados)

1-14

Notes on Future Growth of Demand in the LDCs

1-4

STATISTICTAL

APPEDTIY

SUMMARY AND CONCLUSIONS

1. In the absence of a fundamental political and eco. rel in the CARICOM islands, tourism can be expected to play a central role in their mediu.. and. long-t e r m. economic grow *th. The.e LLCarbe sl.ands ,ve a strong comparative advantage in resort tourism, although some are better L-

.LAJWU

L11

ULII

u.L

L

L.LLL:

L

UIII.LL

.

vJLy

.

UIUbL

.L

Ldllu

LIdVt

capacity for expansion so that physical constraints on the growth of the tourism sector a

a central sector in

svel

years off.

TherefLore, tour'sm will continue tob

the growth of these economies.

stagnation or ph'Lasi.Lg out oUJ tourismU 'Ls a

The implication of a

sharp decline

in per capita incolues

and living standards. There is likely to be an excess supply of tourism facilities for the 2. next year or two. Mnany islands nave expanded accommodation to a ievel tnat exceeds current and short term projections of demand. Demand over the next few years is particularly hard to forecast due to declining real incomes in Europe and North America and the collapse of the conglomerate of which the Leeward Islands Air Transport Service, Halcyon Hotels and charter operations in the islands were a part. Thus the short to medium term market perspective is uncertain largely because of factors outside the islands' control. Therefore, islands should not further expand their tourism facilities but rather formulate plans for orderly and productive future growth in the sector. 3. The greatest single need is to improve the linkages between the tourism sector and the rest of the economy. Local agriculture and light industry ought to be organized to supply the requirements of the hotels and guest houses. Products which might be candidates for such activity are furniture, fittings, small equipment, uniforms, linens and especially foodstuffs. In certain cases it might be advantageous to locate production of these inputs on one island which would supply the tourism industry of neighboring islands. The development of these linkages entails coordination between islands so as to capture economies of scale by allocating production activity and standardizing hotel design and service where practical. Emphasis needs to be placed on a Common Agricultural Policy so as to integrate the efforts of islands possessing greater agricultural resources with those having greater resort assets and to gain economies of large scale in agricultural research and extension programs. 4. Many of the islands have neglected the protection of their natural environment and their fragile ecological systems, and if they do not move soon to protect their natural beauty, the opportunity may be lost. The islands' scarcest nonreplenishable asset is land. So as to avoid the overexpansion of the supply of accommodation and the destruction of the physical environment, as has occurred in Miami and some other resort centers, a physical survey is urgently needed in every island. This ought to include an analysis of physical growth constraints leading to a quantification of the scale and type of investment required. One of the most useful exercises currently under way in the CARICOM community is the UNDP Physical Plan for the

The objectives of this program which began in 1972, upon completion islands. of a long-term physical development plan for Barbados, are as follows: (i) (ii)

(iii)

the appointment of a physical planning team in each island; the provision of a training course with headquarters in St. Lucia to provide counterpart staff; the nreparation of a long-range physical plan for each island.

To date the main mnpediment to the imnlementation of the UNDP physical plan has been the lack of counterpart staff in the various islands with the resources requir-ed to collect and collate the data necessary for the formulaThe importance of the UNDP program cannot be overemphasized tion of the plan. if the islands are to keep their greatest natural rAoriire, their natural beauty. In addition to planning for the future use of physical resources, 5. the governments of the islands must be prepared to coordinate and direct the activities of the private and the public sector so as to ensure the growth of a healthy tourism sector and provide for the mnxim.um. benefito to the The questions that must be faced include: islands' economy over time. (i) (ii)

the provision of infrastructure to complement tourism growth; the expansion of accommodations so as to have the correct

combinationl of 'luxury andu %Cl4ass A hotels, guest houses and small hotels, large convention style hotels and self-catering units; (iii)

(iv)

the reconciliation of the incom-patibility between the scarcity of local capital and of local entrepreneurship and the current market trend toward group travel and bulk marketing which dictates larger units; the selection of a growth strategy for tourism that will satisfy the islands' needs for employment and dignity.

The solutions to these problems will vary from island to island but, particularly in the LDCs, will require increased emphasis on planning for the Some recommendations tourism sector at the governmental and regional level. are: which might be incorporated (i)

(ii)

concessionary government financing to facilities that involved acceptable levels of local ownership, participation and linkage to other sectors; for the small hotel owners provision of training and services such as the "Inns of Jamaica" program (i.e., as subsidized booking, promotion and marketing program);

-

(iii)

(iv)

iii

-

the development of a regional effort to promote and coordinate groun and nackage travel and tn dirprt this demnnd towa-rd small hotels which meet acceptable standards: construction of a "cluster of small hotels" or a "holiday village" as proposed by the CDB and others to economize on infrastructure needs without sacrificing the personal service to the tourist or increased linkages to the local economy inherent in a smaller hotel.

These recommendations presuppose a reorganization of government administration and increased public sector financing of tourism. At present only Barbados has raised tourism to the ministerial level. 6. To the extent that tensions between tourist and residents act as a constraint Ont LLLC- rgrowth ofl the SecCtUor, further 1 ancatlyXSis ofL th11i bUUJ ecL is warranted. Differences between islanders and visitors with regard to socioeconom.ic class, racial or linguistic background, or culturally acceptable dress and behavior traits can be a source of friction. A study looking ilntO tihe existence, incidence and basis ior such tensions wouid seem to be in order. This might lead to recommendations to provide some guidelines for hotel and tourism sector employees and/or arriving tourists so as to reduce the potential for misunderstanding and unintended offense. The negative social impact of tourism development can be further minimized by policies which aim to more equitably and widely distribute the economic gains of tourism to the local community, secure the broadest possible participation in the sector and eliminate discrimination against local residents in resort facilities. it is important that qualified local personnel be prepared to assume positions of responsibility and to further this goal management training needs to be expanded and coordinated on a regional basis. The University of the West Indies might be the appropriate agency to undertake the study of resident-visitor relations and to establish a program to train W4est Indian hotel managers and executives. Given the region's, and particularly the LDCs', dependence on tourism for economic growth plus the revealed preference for employment in tourism by the unskilled as a preferred way of life to agriculture, migration or unemployment, it is imperative thiat tourism become an effective tool for development. 7. The creation of a comprehensive data base to support analysis and the adequate staffing of statistical institutions are vital if tourism is to properly contribute to the economic development of the islands. So as to avoid duplication of effort and conserve skilled manpower, this work should be organized at the regional level. This will also ensure comparability between the islands. A good starting point would be the regional adoption of the Barbados Statistical Survey's annual Bednights Survey which is a source of information on capacity, utilization, seasonality, type of tourist and expenditure patterns. The use of a standard entry and departure card would be an important first step in improving statistics about number of arrivals, country of origin, length of stay, etc. Information on the state of hotel finances, the nature of their purchases and their profitability is urgently required. The hotelier's reluctance to part with information considered confidential could be overcome by obtaining anonymous returns, as is done by international accounting firms.

-

iv

-

The key institutional change that would advance the tourist sector 8. of the CARICOM countries is the establishment of a regional tourist board. The greatet hbenefits from Qich a regional crordinating body are likely to accrue to the Windward and Leeward Islands, as the MDCs are better able to Polic4es natinnal carle. internalize most of the possible economies on which need to be formulated on a regional level include: (i)

the establishment of linkages between the demands of the tourist sector arnd the supply potential of agriculltuare,

14-vest-ock an-d

fishing, manufacturing, handicrafts and some of the service snd sectorS of thesera (4i

(iii) (iv)

lann the4deeopet1fphsca use of scarce tourism assets;

mechan4-..

the institution of training programs at several levels; the preparation of appropriate incentive systems and innovative mix, as W1UL.± --ll as -vlr,o ensure theprojects vu.Lumel, of. LI ciuc I~jL~~ -proper i, i ~ so ~as to accommodation expansion; UZI

(v)

to allocate thue

C12

the coordination of marketing activity so as to expand demand for tourism in the region as a whl0e;

(vi)

(vii)

(viii)

the supervision of the regions tourism estaDlishments so as to maintain quality control; the creation of the machinery necessary to develop a comprehensive data basis so as to make possible substantive analysis of problems and rational formulation of policies. the support of a regional transportation system that will meet the needs of a growing tourism sector.

It is through the regional development of the tourism sector of the CARICOMI countries, particularly the LDCs, that the objectives of high economic returns to local factors of production and socially acceptable goals can be achieved. Joint coordination, negotiation and representation would make the islands more effective, acting as a unit rather than as an assortment of Associated and Independent States with conflicting interests. 9. The external lending agencies should encourage the regional integration of tourism by channeling external assistance through the CDB and requiring planning for new growth on a region wide basis. CARICOM countries have received a variety of technical assis:ance in tourism from the ODA, CIDA, CDC and the OAS. The IDB and CDB have financed small additions to accommodation and the ILO is to undertake a tourism training project for the region. External agencies could provide seed money and manpower to begin the data collection and analysis necessary for policy formulation and to set up a body for the regional coordination of tourism. This could be followed up with technical assistance channeled through the CDB and the regional tourism

- v body.

This4

techrica,,l assisetance Tnigh't

-

focusQ rn schil

inttarc as t-he regional

coordination of tourism promotion, marketing, reservations systems, small h-otel .managem.ent, agr4icultural

di4-versifi4c-4on

4 for trisma dA.ndn,

1ocal

design and manufacture of hotel equipment, furnishings and furniture, architectural plans of small ho.0Gtel" clusters,

alleviate programs t- Co

SoC4al

and

cultural difficulties arising from the growth of tourism, and a physical plan for th'e is'landus. Amconsiderab.le expansion iLn the m-anpower devoted to touristm is needed within the CDB and in the new regional tourism body if there is to De effective regional p'lanIil'lg

andLu

coordinatior.

of

thLe

tourLsru

Lf'e.L

The

future of tourism in the CARICOM Community especially in the LDC's, depends very much on its management at a nationaal and regional level. There seems no question that the stronger the regional cooperation, the greater will be the benefits to the individual LDC islands. This study recognizes that tourism in such islands as Jamaica and iO. Barbados has already achieved considerable development. Their several accomplishments are cited in the text of the report. Most of the report, however, addresses itself to the needs of LDC's.

I. THE EVOLUTION OF TOURISM IN THE CARIBBEAN REGION The Caribbean is dotted with 40 or more islands and island chains 1. ranging in size from Cuba to Montserrat, mainly lying within an area 1,700 miles long and 700 miles wide, between 10 and 22° of latitude north. 1/ Tne year-round temperature ranges from 650 to a maximum of 89° farenheit, with relatively slight seasonal differences. The tropical heat is tempered by the trade winds from the north east. With certain exceptions, such as Dominica, rain is sporadic and does not cause seasonal fluctuations in tourism. The beauty of the Caribbean's resort assets is outstanding and the topography of islands only a short distance from each other is very varied. The region's turbulent history has spawned a unique mosaic of cultures, races, languages, religions, music, food, architecture and social mores. These factors plus proximity to North America, historic ties to Europe and a strengthening of the relationship with Latin America have propelled the Caribbean into becoming a major tourist destination. When boat travel was the norm, Europeans wintered in private homes 2. and staid guest houses in the Caribbean - their long sojourn justified by the length of the journey. In the immediate post-war period, North American predilection for the motor car tended to restrict travel demand for the Caribbean, particularly given competing assets and climate on both the south east and west coasts of the USA. In the mid-fifties, however, the jet set be8an to predominate and the Caribbean's era of glamour began. 2/ The image which the region projected, particularly during the northern hemisphere's severe winter, was of a tourist paradise, comprising ultra-luxurious hotels, in which an elite group of guests lazed on secluded, golden beaches, snorkeled amid coral reefs, sailed in turquoise seas and danced under starlit, tropical skies. Until the early 1960's Caribbean tourism was very much the prerogative of the rich and hotels were built accordingly. The exclusiveness of the resorts was protected by very high prices in winter. Price competitiveness was less of a factor than the quality and seasonal scarcity of the assets. Since summer demand from international tourists faced many substitutes, hoteliers chose to make their profits in winter and close in summer. 3/ Furthermore both 1/

The Caribbean has many definitions. The latitudinal definition excludes the more northern Bahamas as well as Bermuda, which shares many of the Caribbean islands' characteristics and with which it competes. Throughout this study both Bermuda and the Bahamas are defined as part of the Caribbean while Cuba, which does not at present compete for international tourism, is excluded.

2/

Jamaica in the CARICOM group was the first and main beneficiary of North American luxury tourism demand.

3/

Reputedly winter profits were high; but also a high premium was purportedly attached by owner/managers to leisure.

buyers and sellers thought ot the Caribbean as being "too hot" in summer, even though year-round temperatures do not vary greatly in most islands. 1/ Jamaica's North Coast was developed largely by Jamaicans but, in general, in the non-US territories, foreign investors played a predominant role. 3. The first islands to become tourist destinations were those with a developed infrastructure base, with traditional ties to a metropolis, and, in the north, those within easy boat and later plane reach of the USA. Thus, Cuba above all others and, to a lesser extent, New Providence in the Bahamas in the north and Antigua and Barbados in the east, established a tourist industry. The redistribution of US tourist demand in the early 1960's caused by the closure of Cuba to US tourists, mainly benefited the nearby Bahamas, Jamaica, and Puerto Rico but also diversified that demand and spurred other islands to compete for it. The era of economic growth in industrialized countries in the 1960's, the greater discretionary income available in these societies, the expansion and relative cheapness of air travel and the positive income and price elasticities of demand for holidays, quickened the pace of tourism development in the Caribbean, as it did the world over. As the volume of tourists grew, so new areas opened up. Curacao and Aruba evolved from cruise destinations into resorts per se. As once exclusive areas became better known, so the luxury tourists discovered new hideaways and the tourists' routes extended progressively further south and to less developed islands. 2/ 4. In the later 1960's a sustained tourism boom was forecast because of the imminent introduction of wide-bodies iets. which were expected to stimulate group travel and to reduce air fares. Economic growth in Europe and North America. the main tourist surnlier markets- was exnected to continue; while exchange controls were relegated to history. The Caribbean was particularlv favored by President Johnson's 1968 halancae-of-navments message; in which he requested US citizens to confine their travel to the Western Hemisnhprp.

Thiq

-oniiinrtinn nf P-Yant-z i4ndrurc

a fast rate of

grnothr

of

aorpe'mmo-

dation in the Caribbean, which was further stimulated by liberal investment incentives offered by many yoverniavents. The predominant trends were to a larger, chain-managed hotels and to self-catering accommodation and condominia. 4 Simultaneously, charter onprat ins from. r-anAd

4ivncrasA 4in p

a

ty

Charters also began from Europe, as did group travel from the USA, to points in the C4azibean.

Promot4on and4 marketing efforfts in the Caribbean suprted

these trends and were aimed at attracting: (i) more off-season tourism (mainly by offering discounts on IlULt:

X

pL

LI.D

/

(l)group pleasure travel arnd incentiv

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& CLLU LL1L~L

LVt:

n eL1U

o'erto LUV1VCM_L.VLUL

ru 6LVUU

travel, and 1/

A possible explanation is that in the past many hotels were without airconditioning and uncooled heat may be psychologically acceptable to a prospective tourist in winter, but not in summer.

2/

St. Vincent and the Grenadines have recently provided a haven for tourists escaping from growing mass tourism elsewhere.

- 3 (iii)

a greater diversification in the geographic origin and income levels of tourists, i.e., Europe and South America and the middle-income market.

However, the growth of tourism demand has not yet matched expectations in the Caribbean. 5. The failure to attract a larger inflow of tourists in the post1968 period, has several explanations. The new wide-bodied aircraft were con;.-ntrated on the North Atlantic routes, where excess capacity led to a a price war. The highly diversified rate structure that evolved effectively undercut the Caribbean's price advantage in scheduled air fares from North America. Given the generally high cost of accommodation, food, internal transportation etc. in the Caribbean, once the air fare advantage was eliminated, the cost of the total holiday package became less competitive than ever in comparison with Europe, which is the world's prime tourist area. As a further consequence North America became a stronger competitor for European tourism demand. Summer tourism was affected more adversely than winter tourism. 1/ European demand for Caribbean tourism has often been determined by: the existence of special cabotage fares; currency realignments and internal inflation rates which have altered purchasing powers for Caribbean tourism; foreign investments, which have induced a mix of business and vacation travel; and the decisions of tour wholesalers taken in an international context, about the marketability of a Caribbean vacation. Exchange rates, internal inflation and special excursion fares have also affected demand from other areas. Because such factors are not constant, demand from these areas has fluctuated rather than grown in recent years. 6.

Regression analysis has tended to show a close correlation between

income growth in the USA and arowth of ITS travel to the Garihhean whIeh

explains the slow-down in tourism demand in 1970. However, some aberrations not attributable to economic factors have occurred. Amnng the intangibles, the tarnishing of an image is important. In the past tourist accommodation tended to be located on a rihore site and nriren restrirted de-nQities. Now as tourist explore further afield they find that not all sands are golden, not all islands are squrrounided bhv cnral

reefs or

xtensive heaches, and,

even, not all hotels in all islands are near a beach. Individualistic small hotels and guest houses are inrreasinglv ovnrshad.nwoed hv larger 1/

Demand for summer tourism to the Caribbean faces many substitutes including alternative destinations and saving. Furthermore, the climate in countries of tourist origin encourages domestic tourism and/or domestic recreation activities, some of which may induce consumption of luxury durables, e.g., a yacht, a caravan, a home swimming pool, etc., which in turn reduce discretionary income available and sometimes the time or inclination for a holiday.

accommodation, which generally does not offer the intimate, sophisticated pampering of the exclusive, traditional hotels on which the Caribbean built its image. For many and often complex reasons, the quality of service has deteriorated in several islands. The islanders are not alone in being pleasanter and more attentive in hotels where relations with management are close, rather than in the somewhat impersonal atmosphere of a chain managed hotel with its more structured hierarchy. Where the investor's response to cheaper, group travel has initiated a trend away from self-contained. enclave hotels and, at an extreme, has generated self-catering accommodation, tourists have begun to demand restaurant and entertainment facilities outside the hotels, as well as more "things to do" and these are often not available as they would be in Miami or Blackpool. Often, therefore, visitor expectations have been disappointed, travel has not been repeated and word of mouth publicity has been adverse. 7. The greater mobility characteristic of summer tourists and visitors to non-luxury establishments, has increasingly brought the tourist into closer contact with the local population, whose attitude has recently become an important ingredient in the tourism product. Isolated incidents of social unrest and the more frequent incidents of crime and violence in tourist areas in a variety of islands, have received considerable publicity in the US Press, whose readers can seldom distinguish between islands 1/ and whose image of the Caribbean is consequently that of constant upheaval. Furthermore, the desirabilitv or effectiveness of conventional tourism as a develonment tool has been increasingly and openly queried in the islands. Effectiveness is queried belncas of the high imnort cnntent in tourist exnpnditures and in the capi tal investments necessarv to induce these. The desirability of tourism is queried by some sociologists, politicians and nationalists whn regard tonurism (i) as a revival of plantation history where black slave waited on white master 2/ and

(i44)

as

creatingan

dendenc

on

an

ovternal

metrnnopliC.

The

lifxQtfila

of some visitors - particularly when on vacation - has grated on the cultural and

re4ligious

tr-aditjions of mar.y

rs

Fornomicts are

c'ra

'onernved

about

the distribution of benefits from tourism and environmentalists about the threat

to1- the island

f-ragil

-1-4-lFlcl

-,tnrn-

LTocl

r--idents, more

simply, weigh the financial benefits against the extent to which tourists monopolize or croWA local resort assets,-H---sopn

-a

transort f0-414O-acils

and push up local prices. Often this debate has permeated the consciousness 0of potential and actual t-ravellers anA maAe them feel ''ur.welcom.e''. Rvai ly a recent Louis Harris poll indicated that the prime concern of US tourists travelling abroad was flor their physicall safety.

1/

Anecdotes abound about the geographic ignorance of visitors and even of members of the travel trade about the Caribbean.

A typical classic is

the Texas promotor who tried to cancel a very large convention in the Bahamas out of fear of a recurrence of the New Year's Eve strike of hotel workers - which had occurred in Barbados a month earlier. 2/

As an intellectual rationalization, the argument has appeal, but it is exnressed almost exclusively by the intelliaentsia; who do not normally depend for their living on working as a waiter.

- 5 -

8. Any generalization immediately underlines the many expectations. The CARICOM members of the Eastern Caribbean chain and the LDCs specifically. are almost as different among themselves as they are from the rest of the Caribbean. Their tourist assets are as diverse as their resource endowment, their physical size and their stage of development. Jamaica's tourism sector often shares more of the characteristics of the Rahnmas- Puerto Rico and the US Virgin Islands than of the Eastern Caribbean. The distinctive features of CARTCnM touriqm and the growth of demand dnis lnn1vin these is1landC ar discussed in subsequent chapters. Most of the data are collected in 1973 and uintdatetd by field workl in anrlu 1974. Evtery attempt c hpbeen rnnae to incorporate and evaluate the effects of more recent events, but the Energy Crisis hasause

_Jor price -.- n,--e

-nd ger.erating.

intuitsple

nkt

n

has led to considerable re-routing of aircraft and even reduction in services. Urncertairnties have been heightenred by t dmis the Court Line conglomerate which largely controlled air travel within CARICO0 (through the LIAT operation) U.K. ar.d l:eld -ubsant-ial1 htel1 inetns in the sold c.-M rte r sfrom the1CARICOM group. To the extent possible, the report incorporates these *UWALtLUe situat-on its so.,.ewhat volatile. Aevelopmer.ts. Y.owever, tUh Therefore the growth rates projected in the demand analysis may now be

rather

optiAmistic ar.d attlr.bl

only_ inas,,

a

one

iepro.

The

longer term conclusions and those unrelated to a time frame remain unchanged Lyrecent ever,ts.

-6-

AA..

VTA

ILII.

LAIOHFSUPP1LJ 1%j

.V

IA

,

1TEfI

CAf1R1IBBEtN

9. The following table illustrates the size and growth of supply and demand between 1966 and 1972 in the Caribbean as a whole since developments in the tourism sector in the CARICOM group should be analyzed within the larger regional framework of which it is an integral part.

Table 1:

Tourism Demand and Supply 1966-72

Tourist Arrivals Hotels and Guest Houses Thousands Number of beds Caribbean CAKICUt LDC Caribbean CAKICUM LDC 1966

2,850

% share

1968

100

3,650

472

107

62,500

14,500

3,700

16.5

4.0

100

23.0

6.0

Cottages and Apartments Number of beds Caribbean CARICOM LDC n/a

n/a

n/a

-

-

-

606

140

75,000

18,600

4,100

13,000

3,559

440

% share

100

16.5

4.0

100

25.0

5.5

100

27.5

3.5

1972 % share

4,900 100

945 19.0

213 4.5

102,000 100

30,000 30.0

7,800 7.5

28,000 100

8,712 31.0

1,400 5.0

21

25

34

Percent Average Annual Growth Rates 1966-68

14

13

14

10

13

5

1968-72

8

12

11

8

13

18

1966-72

10

12

12

9

13

13

Note:

(a) The 1966 data are based on scattered information and heroic assumptions to fill in the gap; to a somewhat lesser extent gaps exist for 1968 and to a much lesser extent for 1972. The main weakness in the data are the estimates for the US Virgin Islands; ,total air arrivals of 742,000 have been used in 1972 which may overestimate tourist arrivals by air but also takes no account of non-cruise sea arrivals. (b) Definitional problems exist in classifying cottages and apartments, since these often form part of a hotel complex.

Sources:

Multiple but mainly: Tourism Supply Study - Caribbean Region. A A study carried out in 1973 for the World Bank by the Shankland Cox Partnership and an annex to this report.

-7-

10. a nAd

Without self-catering accommodation, the growth of tourism demand tI1ha 1..t oJf

II Wot el

and

gue

longer 1966-1972 period.

recent

grow-Wh.1 of A. S./W LCIL ii14.

supp'ly. OjJf..Ly

*

is

.upply

a.os.

fecl

balace

in

thI

Diversification has apparently accelerated the I1/ A striking feature of th-e above analys's 4s that I. tJ..Lt L UC LO 4.L -L~ LL~ CLOL..

COS.S~A.C

JALL

h1. JJV

O

CARICOM's share in total supply, is now considerably larger than its share of'

tourLi s t a rrlvL

tLVo

'LhIe

CaribbeLL

n)-CLL,

spILtCe

a

f

Cster

growthLLI

of

UCIIIdLLU

i

the CARICOM community than in the Caribbean as a whole in the 1968-1972 period. VOviously, in the Caribbean as a -whole ndLLUII[ L11t LJUs lI patLLILUadr, investors over-reacted to a fast growth in demand and a slower supply growth il the 1966-68 period.

./W

The

grwt 6.hW..a

of self

cing

aLcco

tnith

of data on condominia, which are less important for the CARICOM group thar.

for .CerLtain islar.ds ir

th.e

rest of the Caribbean, .as such

US Virgin Islands, the Bahamas and Puerto Rico.

thbe

- 8 -

III.

THE CHARACTERISTICS OF DEMAND FOR CARICOM TOURISM

The Volume and Growth of Demand 11. The following table shows the volume and growth of tourist arrivals annually to the Caribbean, CARICOM and the LDCs, during the 1968-1972 period, as well as the market shares of CARICOM and the LDCs. 1/

Table 2:

Tourist Arrivals in the Caribbean

CARIBBEAN Tourist Growth Arrivals Rate Number Percent Thousands

CARICOM Tourist Market Growth Arrivals Share Rate Number Percent Percent

Tourist Arrivals Number

LDCs Market Share Percent

Growth Rate Percent

1968

3,650

-

605,931

16.4

-

140,116

3.8

-

1969

4,400

-

665,079

15.0

9.8

159,340

3.6

13.7

1970

4,300

neg.

739,673

17.3

11.2

177,244

4.1

11.2

1971

4,600

7.0

850,679

18.6

15.0

190,951

4.2

7.7

1972

4,950

8.0

945,350

19.0

11.1

212,564

4.3

11.3

The CARICOM countries have increased their share of Caribbean tourism between 1969 and 1972. Currently the 20% market share of the ten CARICOM islands, compares with the 60% combined share of the Bahamas, Puerto Rico and the US Virgin Islands in total Caribbean tourism. Fluctuations in the growth of arrivals were less severe for CARICOM members in the 1968 - 1972 period than fnr the Caribbean an a whole. Onlv Jamaica amone CARICOM members shares the high dependence of the Bahamas, Bermuda, Puerto Rico and the US Virgin Tslqnds on IUS demand.

12. The following tahle shows the relative shares of each island in total CARICOM arrivals and the average annual growth rate in tourist arrivals to each island betwee ! and 1972.

1/

Tables in the Statistical Appendix Supplement the data in this and ote

r

chapL LI-J

ter

.

- 9 -

Table 3:

Shares in CARICOM Arrivals and Rates of Growth 1968 and 1972 Tourist Arrivals Number 1968 1972

Percent Average Annual Growth Rate 1968-1972

Percent share of CARICOM arrivals 1972 1968 7.6 1.6 4.0 1.3 1.7 4.5 1.8

55,838 9,977 23,164 7,125 9,297 22,653 12,472

72,328 14,737 37,933 12,529 16,245 42,399 16,902

6.7 10.2 13.0 15.2 13.5 17.0 11.4

9.2 1.6 3.8 1.2 1.6 3.7 2.1

TOTAL LDCs

141,026

213,073

10.6

23.2

22.5

Jamaica Barbados Trinidad and Tobago

258,460 115,695 91,660

407,806 210,430 114,550

12.1 16.0 5.7

42.6 19.1 15.1

43.1 22.2 12.1

TOTAL MDCs TOTAL CARICOM

465,815 606,841

732,786 945,859

12.0 11.6

76.8 100.0

77.5 100.0

Antigua Dominica Grenada Montserrat St.Kitts/Nevis St.Lucia St.Vincent

Note:

Statistics showing annual visitor arrivals and rates of growth are shown in Table 1 in the Statistical Appendix.

The CARICOM group has experienced bouyant growth of demand between 1968 and 1972, and, with the exception of 1969, the annual growth of tourist arrivals was consitently and considerably higher than in the rest of the Caribbean. Although this higher growth is partially a function of the much smaller base in most CARICOM islands, Barbados is an outstanding example of high, sustained growth on a 1968 inflow of over 115,000 tourists. Jamaica had a poor year in 1969 but this established tourist destination with 260,000 tourist arrivals (in 1968) has been more successful than competitors in the northern Caribbean. Growth rates in all CARICOM islands except Antigua and Trinidad & Tobago, have been impressive throughout the period. If Antigua, which accounted for 35% of all arrivals to LDC islands in 1972, is abstracted from the LDC group, the average annual growth for the remaining six islands ranges from 10% p.a. to 17% p.a. and averages 13% p.a. in the 1968-1972 period. However, preliminary and partial indicators for 1973 and 1974 suggest that growth rates have declined, sometimes drastically, in common with world wide trends since energy prices increased. Performance has not been equal however nor is the measurement of 13. growth by terminal years revealing. 1/ St. Vincent's tourist inflow has declined in

absolute numbers from 1970-72.

Although average erowth to

St. Kitts/Nevis averaged a healthy 13.5% during the 1968-1972 period, growth 1/

See Table 1, Statistical Appendix.

-

10 -

has declined in recent years. In Grenada, where tourist assets are outstanding, growth has been erratic, as has been the case in Montserrat. Dominica with its limited and specialized tourist attractions, has also experienced erratic growth from a very small base. Jamaica accounts for 43% of CARICOM tourism and Barbados for 22%, or almost exactly the total of all LDC tourist arrivals. Jamaica's predominance is partly a function of proximity to Miami, its relatively higher stage of development and its much larger size. 1/ Barbados' highly developed tourist industry in relation to the LDCs is surprising, since it is considerably smaller in size than St. Lucia and Dominica, for example, and is not particularly favoured by location. Antigua on the other hand, first developed as a tourist destination because of its location at an air traffic cross roads and because of the existence of a US military airport on the island. Barbados is a classic case of an island which developed a tourist industry well before neighbouring islands with roughly similar tourist assets, because of its much better infrastructure base, including a good deep water harbour and an international airport. 14. The reasons for different growth patterns are multiple. The growth constraints that are common to the region are discussed in later sections of this report. A study of the sector in the LDCs is included in Volume II of this report. The special case of Antigua is discussed in a separate annex. Studies of the tourist sector in Jamaica and Barbados have been carried out during the course of IBRD Economic Missions in 1970, 1972 and 1973. 2/ Countries of Tourist Origin 15. In 1972, some 53% of all visitors to CARICOM islands were from the US, 14% were from Canada and some 7% from the U.K., compared with 76% from the USA, 7% from Canada and 3% from the U.K. for the Caribbean as a whole. Without Jamaica, CARICOM would show even less dependence on the US market. Inter-Caribbean demand accounts for over 40% of total tourist arrivals in Dominica, St. Kitts/Nevis, St. Lucia and St. Vincent and for about 20% in Antigua. Grenada, Montserrat. Barbados and Trinidad & Tobago. Moreover demand from within the region has increased at a dynamic rate, exceeded only bv demand from Canada which has been stimulated by charter onerations and has been particularly strong for Barbados, St. Lucia and Grenada. US demand has bepn snpciallv dynamic for St. Vincent where numbers are small. but also for Barbados and Jamaica. Demand from the U.K. has been both dynamic and stubstantia1 in size for St. Lucia and Jamaica; nresumablv because of the expansion of charter operations to these islands. Travel Modes and Patterns 16.

by

Data are not available on the number of islands visited on average tou-ists.

Howeve

,tourists

seem

to

be

main!-y sin-le

desti4n.tion

!on.g-

stay visitors in search of sun, sea and sand relaxation rather than travel 1/

The physical size of islands is shown on Table 21.

2/

An IBRD Economic Mission also wrote a report on the Bahamas in 1974.

-

11

-

ner se. The infreauent exceptions tend to be Europeans exploring the Caribbean for its historic and cultural assets, rather than for its resort assets. Rusinpes

travellers comnrise a small pronortion of foreign tourist arrivals

and are significant in terms of numbers only in Kingston, Port-of-Spain and Bridgetown_ Barbados - many suth travelprs nf cnurse mix business and pleasure. Domestic tourism is generally insignificant and is encouraged by discount prices only in JnmaIca. Nearly all tonp-nupr vis1itnrs tn the Caribbean arrive by air - only about 5% travel by sea. The proportion of nprednminat. charter passengers is gng-II hbutt Qs'heduilepd niv purriere still Group travel on scheduled aircraft has been on the increase since 1968, as 1-

Tni,-tff4nn

a

A

4nriwt-n"4%r&

Pallr4tv

t-ur,gyol

nf

Antm

h:nrlrnnQ

tho

A"Alun1iq

Cruise visitors are of considerable importance in the Caribbean. Cruise ships are e.cluded from several of th T------o- l--- I -p-water harbours, but otherwise visit several islands during any one voyage. The volume of cruise passengers fluctuates -nnually for a number of Often cruise ship passengers become stop-over visitors to a specific destir,

LaJ. t4oLn4*

LatCe

.

years

Y achL"-

-c

-

V

.

_..f..

-

.-JL

.

,k ..

A small number of tourists fly to Antigua from where they sail down the LI astern lar'llean.

.hain.

facilities for yachts. anL7

thLLM

Certail

hotsI-

provide anchorage

-nd sevce

Yacht traffic is particularly important in St. Vincent

Grenadine.s.

Average Length of Stay In most islands, length of stay ranges beLweenL the typical CarLbbeanL 17. averages of 5 to 8 days. 1/ Generally, the farther the point of tourist origin, the longer tne length of stay. On average, length of stay is longer for the MDCs than the LDCs. However, tourists to the LDCs are increasing their stay as they are in Barbados, while Jamaica has experienced a decline from 9 to 8 days between 1968 and 1972. The very short average length of stay shown for St. Lucia in 1972 does not reflect the recent pattern or ionger stay package tourism to that island. The long average length of stay in Grenada and its apparent increase from 7 to I2 Uays, comb'iLed with a ias;

growth of arrivals, is an indicator of the success of Grenada's tourism development.

Montserrat!s exceptionally long stay reflects the high propor-

tion of villas available for tourists. Antigua's very short length of stay comprises destination tourists plus many visitors staying overnight Due en route elsewhere. 2/ Data available for Jamaica and Barbados suggest that . _J ._ _ . _ __ . . . . ^ . .. ~.. . .. ... * . tnan in summer - a inuLing signhtly longer in winter lengthorf stay is generally that can iprobably be generalized for all CARICOM. 1/-

However average length of stay data are subject to many weaknesses.

2/

Because Antigua's airport is at the centre of an international air crossroad.

-

12

-

Tourist Bednights 18. A ranking of CARICOM countries according to bednights 1/ provides a better assessment of the absolute and relative volume of tourism in each island. 2/ Table 4:

Islands

Tourist Bednights 1972 Volume of Bednights Thousands

Percent Share in CARICOM Bednights Arrivals

Jamaica Barbados Trinidad and Tobago Grenada Antigua St. Lucia St. Vincent Montserrat St. Kitts/Nevis Dominica

3,262 1,368 630 455 181 148 135 125 81 59

51 21 10 7 3 2 2 2 1 1

43 22 12 4 8 5 2 1 2 2

TOTAL CARICOM

6,445

100

100

The bednights analysis shows that Jamaica, Barbados, Trinidad and Tobago between them account for about 82% of the tourist bednights spent in the CARICOM group, with over 50% accounted for by Jamaica alone. Thus the seven LDCs account for only 18% of CARICOM bednights, with 7% spent in Grenada and another 3% in Antigua. The very small size of the tourist sector in most LDC islands is now more apparent than ever. Tourist Income Levels 19. Data for 1968 indicate that only 25% of US travellers to the Caribbean earned income of less than US$10,000, 31% earned between US$10,000 and US$14,999 and 44% earned over US$15,000. 3/ A survey of departinR passengers at the airport in Bermuda in 1972 showed that more than 50% of visitors had an annual income of $18.000 or more. A survey in Barbados in

1969/70 4/ indicated the following income means for Canadian and US visitors in winter and summer: 1/

Bednights = tourist arrivals x average iength of stay.

2/

An

3/

Current Economic Position and Prospects of Jamaica, Vol. IV Tourism, June 4, 1971, Table 7, Statistical Appendix.

4/

The Tourist Industry in Barbados, George V. Doxey, Toronto, 1971. details of the survey are provided.

inadequate data base handicans and analysis. be taken into account throughout this report.

Data limitations must

No

- 13 -

Canadian

US$

US

US$

Winter

16,000

22,000

Summer

10,500

13,800

By comparison, the median family income in 1969 in the USA, according to the Bureau of the Census, was US$9,590. Data collected by the Bank of Mexico in a 1969 survey show that 46% of arriving tourists were in higher income brackets but only earned 16% more than US$17,400 per annum. Data on European demand is lacking but European tour operators are known to aim their Caribbean tour packages at higher-income clients. Although demand for Caribbean tourism has undoubtedly become more diversified since 1968, the impression persists that a majority of tourists to the Caribbean are in the higher income brackets and tend to have higher incomes than travellers to most alternative resort areas.

- 14 -

IV.

THE CHARACTERISTICS OF SUPPLY IN CARICOM ISLANDS

Growth of Accommodation 20. The following table compares the growth of different categories of accommodation in the 1968-72 period, island by island. 1/

Table 5:

Percent Average Annual Growth of Ancnnmnodation

and Tourist Arrivals 1968-1972

Arrnmmndation

Island Antigua

5.3

neg.

Dominira

30.7

9-3

Grenada Montserrat St.Kitts/Nevis/Anguilla St. Lucia St. Vincent ATT LDCs Barbados J-jTrinidad and Tobago

18.3 13.7 39.1 11.1 16.1 2.0

15.1 34.2 n.a. n.a. 11.9 14.5 neg. 6.0 1.4

CADT('.M

11.

21.

Tourist

Hotels Guest Houses Apts.Cottages Total

Since

partia'

7.8

Ica -3.6 A

6.2

5.

ev,dA en ce i.nd ic a

4

nro

-a_tes

sl

n.a. nA._ 26.2 6.9 n.a. 32.4 n.a. 28.2 24.4 17.5 n.a.

100

gn.ifl

c ant

Arrivals

5.8

6.7 !0.2 I

19.8

13.0

7.9

15.2

22.7 38.8 16.1 17.8 6.7 14.2 5.6

13.5

!2.5l

11.6

shofrt f1all

17.0

11.4 10.6 16.0 12.1 5.7

in

a

C

Jccuow-

dation prior to 1968, the implication of the comparative growth rates is that therean r_CC exes UL ofuplyovr in1 CtICOM ru,"ber wi I.-.4iL t L is_ ± aIL ~IUYP.Ly V V. U der,and '. Iiii £n1 mos ILiUOL 'tJI Ji LIICiIUCLJ= JL.th &L th LLIe exception of Barbados and possibly Montserrat. While excess supply could be attributed to thi'e very rapiLU

expanii'on ofI apartm.ients and cottages, an unkLr,-UIL o-w..

factor is whether the rate of growth of tourist arrivals would have been achieved.without the adpartme-nts and cottages, i.e., UidU thiese ULVLiLy adlU expand demand, or did these cheaper accommodations poach on a limited market? The question is one that requires further investigation because of its policy implications for the future. Recent Investment Characteristics 22. The following data for Jamaica show the concentration of investment in larger-sized hotels since i967, since wnen tne average number of rooms per hotel has doubled:

1/

More detailed data are shown in Tables 7 - 9 in the Statistical Appendix.

- 15 -

Table 6

1967 Jamaica Hotel Si..z e 1

-

99

14

10AA

- 199

0

-

177

0

over 200 Average Rooms per hotel:

67

1

4959 .

JIJV

50 -

Rooms

Hotels

1

1975 (Forecast) Number of Rooms Hotels

1972 Number of Hotel's Rooms

Number of

1

011

1,679

71

1,348 1 ,7117

952

19

1,268

20

98

12

1 ,7

1

±Jul

I J

I

1,966

14

5,341

'. -

7UV

5

202

87

63

43

01

The growth of accommodation by category of hotel in Barbados is shown below:

Table 7

Category Luxury A Class B Class Guest Houses

Index to 1972 Base 1965=100 Base 1969=100 387 153 115 239

112 106 58 121

However impressions Comparable data are not available for other islands. gained from interviews, suggest that a similar trend to larger and higher category hotels has somewhat changed the characteristics of the supply scene The main exception seems to have been a growth in guest in many islands. houses. At a time of expected tourism growth - and often limited alternative investment options - local capital and entrepreneurship has been more appropriate for guest houses and small hotels than for the larger and more complex units. The same reasons have induced investment in self-catering accommodation where the outlay for cottages is often small and the return on condominia fast enclugh to attract local investment funds. Data collected in Jamaica in 1970 suggested that hotel ownership was 23. 53% local, 39% foreign and 8% joint. However, because foreigners tend to own the larger and the higher-category hotels, the foreign share is likely to be Some 40% of investment in at least 50% on a room or capital investment basis. A survey conducted origin. resort cottages in Jamaica in 1970 was of foreign in Barbados in 1972, 1/ revealed that national ownership advanced with a decline in category of accommodation from 23% of luxury hotels to 100% of guest houses,

1/

Hospitality education in Barbados, C.J. Grocco, CIDA, 1972.

-

16

-

compared with the opposite trend for non-national ownership. Ownership patterns vary greatly within CARICOM. However, foreign ownership predominates at the luxury and larger hotel levels, with the exception of local - and generally government - ownership of a principal and often business-oriented chain hotel, e.g., the Hiltons in Barbados and Trinidad and the Sheraton in Kingston. Ownership of cottages and apartments tends to be mixed. When accommodation is almost wholly locally owned there is a temptation to conclude that this reflects a severe growth constraint, e.g., poor tourist assets, difficult air access, unfavourable local attitudes as might be the case in Dominica. The Financing of Investment 24. The investment and ownership patterns of accommodation reflect the sources and tvDes of financing available to the Caribbean in the recent Dast. The Caribbean Development Bank (CDB) has financed projects in Antigua and Grenada. The Commonwealth Development Corporation (CDC)l/ with Commonwealth Holiday Inns of Canada (CHIC) and an affiliate of Air Canada, owns and manages hotels in Antigua. Grenada, St. Lucia and St. Kitts. Financing of infrastructure, including transport and public utilities directly beneficial to tourism, has been Drovided by the CDB and the CDC and under bilateral assistance programmes with ODA and CIDA. The latter have both financed tourismrelated studies in the area and have Drovided technical assistance particularly for training. The Inter-American Development Bank has made loans tn development hanks in Rarbadois and Jamaica- nart of which are allocated for the tourism sector and quite specifically for small hotels. Governments have invested d4irertlv in hotelQ n for hbusines visit-ors onperated yvrhains uinder management contracts. Commercial banks have generally financed hotels as a norm,l

uirc.es p rosnc4ti4ron

to

c-redt--wo ,rt-hu

hnrrowers

The

loan funds has depended on monetary and credit policies. banbn4r

asysteh

fina,ncdA

oansiderale

nrtion -

nw nof

ayilab-ility

of

The commercial

htol

"ir.av,cmnntr

in

the late 1960's in Barbados, the financial center of Eastern CARICOM. Due to submsequenn Aebt repaym,ent problems and a tight maoney a. -rkt,thvolume of new lending is now drastically reduced. The limited availability of commercial crei. t and develop.neinant- b.-n i.ng in ma-st -lands, -tror.-Iloa.l investors back on their own resources. high

price og local resort

l'and,

4nevitably

Limited managerial skills and the 4induce

ir.v-stm.e-t

in small accom.-

modation units. An alternative investment for local capital has been in condonin.mia whlere quick'. sales of units refuel the own,er's L.maL,. complexes have also attracted local investors since they do not require the -- - -.. JL± _ c -page 1 UA_A JA 1 L9 And 1,u for a IfurtVhe dt IicL L CDC sCr Ibbea s r. wW 1 7 2L,6 -iJUid.ty.

A.r

1/

A

See CDC Caribbean 1972, pages 9 and l0, for further details.

-

17 -

25. However, given the scarcity of public and multilateral funds in the islands, and the competition for commercial bank funds, financing of accommodation has originated mainly from foreign sources. Foreign investment has been induced to the tourist sector by incentive legislation which has allowed duty-free imports during the construction stage and provided tax holidays for the first several years of operation of a hotel. Additional measures in Jamaica have included the euaranteeing of foreign debt and nrefprentinl incentives for convention-sized hotels. In almost all cases, whatever the category of hotel or tvpe of accommodation; nrofit nn rcurrent nnperation

is

only one of a series of motives for hotel investment, which include: eventual profit on rcurrent onperations as a result of inflat-in; expectations of capital appreciation; tax relief either through tax holidays under incentive legislation or a tax write-nff on lnases - particularly where double taxation agreements are in operation; a means of livelihood or official residanrein a pnrticllarly beutifil hnrt of the world; the opportunity to cultivate an interest in people (some hoteliers write books); and in individually7 oed hotels (not as uncom.m..on as i.t m"iht seem), - the psy.hological appeal of manipulating largesse and hospitality as the innkeeper of a particularly -,,cellent

hotel;

.- A

4r in

tf

l

r 1,a .

s

1

i

tion of production, transport or marketing services with the hotel as the eventual outllet. 26.~

~.J.

MThe ef ec Lk%. =L .L.S .A

to be evident.

s of

t e construc+-ion

b-oom

that

a

S.LL

JJIL.

L LCL L..

SPA

L& .

.J.SJL

bega =rL&

ir. 196

,

LU& A YVU

,

ont

nu

%S.SJLLin.1u=

Hotels were often financed at short-term and at market

interest rates. .LLL L . L.~

TnIrvestmer.t.LLV~. L U LA.

proposals and manragem.ent cor.tracts --JjJa.3 L GLU LI.L~U~ L. lS A i..dWCLC wer

a6

reedCC

upon by governments with virtually no screening and uncritical acceptance of the~

viabiU.Li.Lty

SoJ.

LLthe

1JecJ

LS.0

OftLe VA.

roVC1.LLL1t1.

L.

LicLLL[ntive

sLIeriiLes

were

hastily made even more magnanimous in cut-throat competition for the investment cap'LtaEL. ld ±lUl243LPUL. LL4U LIVUbLULS d1UbULUUtgiL to plUll1 UL&Le db profit expectations from tourism became greater than from alternative investments. Physical and economic plans were not available to conLroi the location and type of project being undertaken. The need for related infrastructure, training, sometimes new or strorLger public sector ins;titu;ions, and promotion and marketing etc. was not foreseen. The demands of the tourism sector became translated into demands for imports rather than being canalized into increased local production and import-substitution industries. Fiscal measures to milk the benefits from tourism developments were neglected. Among the LDC's, Antigua, Grenada and St. Lucia fit this Caribbean picture rather more closely than do the others. witnin CARICOM, Jamaica, and to a much lesser extent Barbados, are other examples. Training 27. Obviously, a prime public sector objective in tourism development is job creation. Furthermore, efficient service is a determinant of hotel profitability as well as a vital ingredient in the tourist's impression of 1/

A study carried out by the World Bank suggests that the terms ot lending that would ensure the financial viability of hotel projects differ somewhat from conventional loan terms.

- 18 -

his stay. At present hotel schools exist in Jamaica, Barbados, Trinidad and Tobago and the two latter, in particular have absorbed candidates from other islands. Greater training facilities in hotel schools are obviously necessarvy but at the lower levels of skills, many managers prefer on the iob training, which can be equally effective in creating skills. The rapid expansion of tourist accommodation recently has not been accompanied by a similar expansion in management training. The ILO currently plans hotel training schools at the regional level with headquarters in Antigua to provide training at middle management levels and above. The University of the West Indies faculty of Business Administration is a most appropriate vehicle for creating hotel managers, although often neglected by hotel manager The Univerqityv unlike several in the USA for example, 1/ has not candidates. encouraged hotel training specifically, despite the importance of the tourism sector to the Caribbean.

The alternative to specia1ized hotel management

is the long process of upward promotion in the large hotels, which normally since has, little appeal to the hright st_tudeInt in less dvuelonpd rontinripes training opportunities and promotion are often greater and faster in other i in t-he larger or more luxurious hotels top management occupations. .W.h tends still to be expatriate, some chains are increasingly using West Indians in the4r hotels. The middl-anagement and top-managet.nt gap in many hntelc Regulations for and duration is being filled by expatriates on work permits. time causing time to from 'nd ad these permits vary from island to isarnA of Often only considerable uncertainty to the hotels and the applicants. third-rate candidates apply for a Job in which their future is uncertain after a year. The costs to the hotel are considerable and the effectiveness oL

the appointee liM,,ited by the short

duraton of his contract.

A less

frequent occurrence is the appointment of local people who because of lack of sufficient experience and training are not properly qualified to fill the The adverse consequences of poor management are endless in a hotel job. operation.

However,

th'le continued

absence of

local's from. the higher echelons

of hotel staffing can only prolong the criticism that only menial jobs are reserved for local people. Wage Levels, Land Values and Construction Costs Wage levels in the tourism, sector tend to cor,,pare favorably with 28. those in most other unskilled or semi-skilled occupations. However, the pool of unemployed or underemployed is so large that the imrpact of tourism wages on other activities is likely to be minimal. 2/ References are often made to

1/

e.g., Cornell, Michigan State.

2/

Unquestionably hotel work is more pleasant than cutting sugar cane, so that wage rates per se cannot be held responsible for attracting such or other workers from agriculture. Almost any alternative employment opportunity would have the same effect. Domestic servants may be an exception and maids are undoubtedly becoming more scarce in the Caribbean but like agriculture the hours are long and wages low, with leisure time co…siderably restricted

-

19

-

In fact the observed the low productivity of labour in the Caribbean. employee room ratios do not bear this out completely. A higher employee: room ratio would be normal with luxury hotels heavily equipped with resort facilities such as those in St. Lucia. Otherwise there appears to be no abnormality in the employee: room ratio. 1/ W4hile wage rates in tourism compare favourably with wages for unskilled and semi-skilled in other sectors - particularly when tips are included - wage rates in the CARICOM group tend to be rather low on an international comparative basis. The opposite appears to be true of construction costs, which tend to be considerably above average on a comparative international basis and therefore to a considerable extent dictate the final room price to the tourist. An excellent study of this complex subiect is contained in an annex to the Doxey report for Barbados, which would appear to be applicable to the Region as a whole. 2/ Land in tourist areas, as suggested by Table 21, and as confirmed in field interviews, tends to be among the highest-priced lots in the island. 3/ The land in certain tourist development areas that are controlled by the government, e.g., the Frigate Bay and Rodney Bay areas of St. Kitts and St. Lucia, is considerably below the market value of resort land elsewhere. The exceDtion is Antigua where land values, despite heavy inflation seem unduly if accurate, these nrices nresumablv reflect the staenation in dpnrp-.-ed

the tourist industry.

At the other extreme,

prime land in Grenada has

rpeahpd thp uvrv high leuvls nf the Bahamas and Barbados. With the excention of Jamaica, the CARICOM governments insist upon the provision of public access to honahlnnd.

As

gnPrarliationn,

the rplativplv hioh

cost nf land and

construction indicate a relatively high room cost for all categories of tourist

whic ydknal.mmr..oat, 4c only m nimnllu

cmnTnnQatePd

hv rnlqtHVPlv low

wage rates. Hotel Profitability and Occupancy Rates 29. By 1974, the investment boom had virtually evaporated. Since demand f-llen below rate .hn. has not been as bouyant as expected, hotel oun projected levels. Some hotels in some islands have been forced to close AJt,L . Ui nLfLortunately most own.ers and ,manag e rs regard financial inform-.tion as confidential. Only occasional (and then confidential) studies of hotel finances havbeen carried. out in t1he Region. The subJect of .hotel profitability is too relevant to economic growth and basic planning and marketing decisions to be neglected for much longer. A/ The general impression gained from interviews in the region is that luxury hotels tend to be more profitable thlan tho-se a;l-the

1/

'lower enAd ofL

the

scale.

A study carried out in Barbados

Low productivity of staff may entail higher maintenance and replacement costs ratller

hlan a IiL

employee room

ratio.

2/

"The Impact of Tourism on the Construction Industry in Barbados" by Carson L. Jenkins, Appendix Two, Doxey report, op. cit.

3/

Tne data were compiled by Shankland Cox mainly from interviews.

4/

A auestionnaire suitable for a study of the financial operations of hotels in the Caribbean is reproduced as Appendix 1.

20

-

-

The opera-

indicated that A Class hotels and apartments made losses in 1972. 'U

.ZAJfl "'

SJA

U.

.LL

-V1.J

0

''-,fl,~¼ U,a

b

AfJ&

I..L

t.i.

Ct.

',,Sit

UCflS>..

-

CfS

U. .

J

subsidized by the investors, but in the long term, these probably recoup their .ap-1a losses froru the eventual ind,jbl ca . clU -LL ~ L tZVU L ar.d aiu almlosttLW~ir.eviable L A. L PL .LVAUU.

gains obt,ained ftomn. the 0U L6 L LU L.LL~ gaiJ 0.1

investment. Family run guest houses often fulfil the limited and highly UbeiLn profLU1taL1e their Ow-iL. rs, WithLIUUL lr.esarLLily of relati-ve expeCt-aUitors by true accounting measures. 30. During the past four years or so, the pressure on already high operating costs has beenl upward -whIle the pressure on L-venues has often been in reverse direction. The limited resource base of the islands, shortages of skills, dependence on imports, speculative land prices, structural inefficiencies in the sector (e.g., the absence of local servicing and maintenance facilities for equipment) and of course inflation, has tended to make both hotel construction and operation a high-cost and a rising cost venture. Relatively low payroll costs in relation to revenues are partially offset by the high costs of imported management. At the same time, average room revenues would seem to have been failing despite published hotel rates which do not reflect the reality. Cheaper self-catering accommodation has provided some hotels with stiff competition and they are known to be cutting their rates in a scramble for higher occupancy. Furthermore, the increasing trend to group and charter travel entails discounted rates. Caribbean prices are already high and cannot be raised further to uncompetitive international levels. Most hotels can reduce their operating costs somewhat, though often at the expense of quality of service and maintenance. The newer and larger hotels with their higher fixed costs, have less flexibility in this situation. Older hotels, less burdened by amortization payments, will have greater liquidity with which to survive a squeeze on profits. To a considerable extent, the survival or otherwise of certain hotels depends on the length of the profit squeeze. Since the basis for a calculation of profitability is not available, 31. an analysis of occupancy rates in the CARICOM islands was attempted. These are not generally available either but an estimate of overall utilization of accommodation can be derived. The exercise involves comparing the number of bednights spent in an island in one year with the number of beds on offer in that year. The possibilities of error are legion and the exercise ignores the offsetting effects of domestic tourism and non-utilization of commercial accommodation by foreigners (e.g., among whose alternatives are yachts, tents, private homes). The margin of error is likely to be greatest where non-hotel accommodation is plentiful and often not recorded in supply statistics, e.g., Mlontserrat. In order to make judgements about the relationship between supply and demand, a set of "break-even" 1/ occupancy rates for different types of accommodation were estimated. The rates were based on interviews with hoteliers and on financial data and take into account the age and category mix of recent 1/

Break-even is often somewhat loosely defined, but could be said to mean that average hotel occupancy rate which generates sufficient revenues to cover current operating costs and capital expenditures. The high double room occupancy rate in resort hotels in the Caribbean tends to minimize differences in room and bed occupancy rates.

-

21 -

investments in the CARICOM community. Necessarily tentative "break-even"" rates would seem to be 60% bed occupancy for hotels, 40% for guest houses and 50% for apartments and cottages. These compare with the following calculations of average annual bed occupancy in CARICOM countries in 1968 and 1972. Table 8:

Estimated Occupancy Rates for Tourist Accommodation 1968 and 1972

Antigua Dominica Grenada Montserrat St.Kitts/Nevis St.Lucia St.Vincent

Percent Annual Bed Utilization 1968 1972 32 21 73 36 59 72 58 69 24 24 38 18 38 40

LDCs

40

35

Barbados Jamaica Trinidad and Tobago

36 66 53

48 50 50

MDCs

55

50

CARICOM

52

46

32. This exercise confirms the impression that average occupancy has declined since 1968 and that excess capacity exists in almost all islands except Grenada and, possibly, Montserrat. This generalization hides the possibility of more intensive utilization of certain categories of accommodation, combined with considerable excess capacity in other categories. Those islands in which there is a multiplicity of small units and a number of large, heavily promoted and often vertically integrated hotels, are the ones where wide variations in annual utilization are most likely to occur. Annual averages also conceal the possibility of peak occupancy rates during specific periods. However, data in Table 6 in the Statistical Appendix indicate that excess capacity exists year-round with the exception of one or two months (generally February and/or March) and is much more severe in the LDCs than in the MDCs. The tentative conclusion is that hotel operations were unlikely to be making significant profits for their investors in 1972 and most probably revenues were well below investor expectations. Since demand has weakened somewhat in 1973 and 1974, and inflation is likely to have increased operating costs severely, the profitability of the accommodation sector is likely to have declined even further recently. Currency realignments could of course vary the price of Caribbean tourism for different markets in the future as in the

- 22 -

past.

Furthermore, given their present levels, even higher prices seem likely

rnnlv tn nrndilrp n nnontivp dApmTnd rponnrnco fnr mnct

iclAnicd

- O

n

in 1

rintar

Therefore profits would seem to depend on intensive cost controls and ultimately nfI

highlV

effirient

Tnn"ar.nt

and responasive

public

sector

nnlicies.

V. SEASONALITY AND THE PRICE COMPETITIVENESS OF CARIBBEAN TOURISM There are basically two tourist seasons in the Caribbean: winter, 33. from December 16 - April 15, and summer, i.e., the remaining eight months. Shoulder or mini-peak seasons do exist (e.g., carnival in Trinidad) DUt are not uniform. The price of a hotel room is about 30% lower in summer than in winter in the Caribbean. Seasonal pricing recognizes the different price and income elasticities of demand for Caribbean tourism in winter and summer. 1/ Promotional efforts throughout the Caribbean have concentrated in recent years on attracting lower income summer tourists, e.g., Bahamas Goombay, Barbados Bonanza, etc. Unfortunately, only partial data are available to quantify the results, but statistics showing the seasonal distribution of arrivals indicate that lower prices have expanded demand in summer. The CARICOM countries receive between 36% and 43% of their tourist arrivals in the four winter months. 2/ On the whole the distribution of tourists is remarkably even and seasonality is relatively mild in Caribbean tourism. 3/ 11onthly hotel occupancy rates in 1972 for several CARICOM islands also confirm the lack of significant monthly variations. The particularly low standard deviation in Trinidad and Tobago is due to utilization of hotels by business travellers, which offsets seasonal tourist peaks. The slackest months in the Caribbean are May, October and November, i.e., those immediately before or after a peak season. In Antigua and Jamaica, summer visitors have increased at a faster rate than winter, while in Barbados, in the context of a highly dynamic annual growth rate, winter tourism has grown even faster than summer tourism in recent years. The winter and summer hotel operations have a completely different 34. financial basis. The break-even point in winter is generally considerably lower than in summer, e.g., one typical, traditional, high category hotel gave the mission estimates of a 60% break-even point in winter because of much higher room rates and an 80% break-even in summer.

The 30% seasonal discount 4/

is applied only to the room portion of a Caribbean vacation, i.e., prices to the tourist of all other goods and services remain more or less constant. Since hotels also do not pay less for goods and services used in the summer operation nrice reductions are achieved by stripping operating costs to a minimum,

1/

2/

Given a year-round climate there is no obvious reason for seasonality. However, seasonality is typically dictated by conditions in the country of tourist origin rather than destination, e.g., climate, holiday patterns, etc. Tables 3 and 4 compare tourist arrivals by season in different CARICOM Ls.Lands.

3/

In Yugoslavia for example, which is by no means atypical in the Mediterranean, 57% of total tourist nights in the whole year are concentrated in July and August, while 85% of total tourist nights occur in the four months from June to September.

4/1

Although price differentials are ably handled by hotels in the Caribbean and fully interpret the scarcity of sun, sea and sand in northern climes in winter, hotels seeru to be unfamiliar with more i-ginatiie-and less conventional promotion ploys designed both to attract and extend a tourist's stay, e.g., a seveItLLnight free.

- 24 the e...ployee:room rat4 0 is

reduced; i that i. winrter are 4ncluded i4.the room cost have to be paid for separately (e.g., sports facilities); and certal t0CL .

4c,osmet .4 |_ic.s ... UOUZC LXL.:

&L

o V

..wite _.f l

W .fi tLLC

luur U

torsm

WAZULy

XVJUL

ar LOll' 01

4

a-G >0

4 A_*2_

LUll.Lfl*0LCL

-J

-. *1L LXC

.- AA

i4

-4* L

tLy

4UM

e.g., free drinks, portable room accessories, etc. Food prices decline only b-ecause a so,mewhat .LJ 'lower qual-ity u.f.roea ~ menu .1s served .LLr.9su'M.-b LLOL tion therefore is restructured to reduce variable costs to a minimum. J35WLl0L

Li

35.

A.

.L

U

L

OU.. O=L

OUIULUOL

V=U

.

.LlI

bUtUqL

A summer season was resisted by hotel owners until the chain hotels

wlich

are geareU to a year-round operatiLon mo-vedu

'L

tLUo thLe CarLi.LUbeaL.

AIs

operating costs rose and squeezed winter profits, as both demand and supply expan.deu

and as com-pet'it'on. fUor

trained

stafLfLL increased, the

LMpUrLaUce

OL

the summer season heightened. Some observers fear the region will lose its sophist'cated image and therefore its free-spending wiLnter guests, if its image cheapens. So far, however, traditional hotels appear to have retained their winter demand and frequently seem to be tne most viabie forms of tourist accommodation, i.e., rich tourists take pains to visit the Caribbean only in winter, and the discerning though less wealthy, recognize the greater attractiveness of the accommodation, facilities and service of the discounted luxury hotel over more conventional hotels in summer. 36. However, discussions that concentrate on the inflow of tourists at different times of the year, ignore the more fundamental effects of seasonality. The increased size of the sector, the income it generates and tne heavy economic dependence of the island on tourism, has led to pressure for considerations of social profitability to outweigh hotel profitability. Massive seasonal unemployment 1/ has been avoided by summer operations, not only in the accommodation but in the dependent services sector as well. There is a growing tendency for underemployment of hotel employees to be shared by rotating staff rather than dismissing them. By which means the incomes of most employees are reduced in summer but not totally cut off and the individual hotels increase efficiency by retaining the core of their staff on a year-round basis. 37. Tourists spend between 20% to 50% of their total expenditure outside their accommodation - depending on the type of visitor, category of hotel, inducements to spend outside the accommodation, etc. Therefore summer closure of hotels has a negative impact on income in many production and service units within the economy. The few expenditure surveys carried out in the Caribbean show that winter visitors spend more on average than summer visitors, but also spend a considerably higher proportion of total expenditures within the hotel or on self-catering accommodation. If accommodation expenditures are deducted from total expenditures, an amount onlv 10% lower than that spent by winter visitors appears to be disbursed by summer visitors on food, local transport, souvenirs, entertainment, etc. outside the hotel. The social value of summer tourism therefore is very great. Furthermore, the hotel, i.e., the catalyst for tourism, seems to act as a ioss leader for other sectors linked to tourism, which do not cut their prices in summer. Therefore, the real costs of the summer operation are borne by hotel employees through their reduced summer income and by hotel investors whose summer operations often succeed only in covering operating costs and not in earning profits. 1/

Which has often coincided with the low season - and therefore seasonal unemployment - in agriculture.

-

25 -

The relative success of cheaper summer tourism might suggest that 38. the Caribbean should continue the trend to lower-cost accommodation, but that decision should be based on an assessment of the net benefits to the economy of each category of accommodation, as discussed in later chapters. Present economic uncertainties, however, make price considerations of prime importance for every category of accommodation. At the same time price controls are not applied and few islands even inspect the accommodation for conformity to specific standards which in any case havNe-not yet been defined--for different categories. Therefore there is no policing of standards and the market is left to regulate prices. Any pricing strategy should, however, consider the following: (i) are first class and self-catering accommodation price competitive between different destinations in the Caribbean and with selected destinations elsewhere? (ii) is the price differential between different types of accommodation sufficient to diversify supply and therefore expand demand, or do price overlaps cause competition between different types of accommodation? (iii)

do price differentials between islands reflect different supply -structures and tourism resource endowments, or different cost structures not specifically related to tourism?

Unfortunately, the questions are easier to pose than to answer. Furthermore the price of accommodation is only a part of the total cost of a holiday to a tourist. 39. Given the distance of the CARICOM group from its tourist generating markets, air fares obviously play a large role in the total price. Seasonal discounts on air fares are often not available in summer as they are for hotels. Among the many complex explanations, is that the Caribbean off-season coincides with the peak North Atlantic and North American domestic touirist seasons, so that aircraft can always be deployed elsewhere, instead of operating at reduced fares in an attempt to induce more passengers on the Caribbean routes. Discounts on the normal economy excursion fares are available to certain destinations mainlv Jamaica. i.e.. throueh inclusive tours (IT). but these are generally available in the shoulder rather than the off or peak seasons. Recently, but nrior to the energy crisis; charter operations have been the main means of reducing air fares for European (the U.K. particularly) and Canadian tourists. The net retiowt-{nn in the nrice of the total package to Europeans through hotel discounts is minimized by the heavy weight of the air fare in the total. Therefnre- the Carihbean remains a destination that appeals to a relatively

high income segment of European demand even in summer. 1/ Summer travel however 1/

The relatively low tourist densities and the seclusion of many hotels, compared to many Mediterranean resorts for example, heighten the appeal to higher-income European demand in summer.

- 26 -

now seems to appeal to a wider income segment in North America since the hotel discount considerably reduces the total cost. Demand from Canada particularly, seems to have precipitated a decline in the price of a Caribbean holiday: the summer hotel discounts stimulated air charters from Canada which, in turn, stimulated demand for even cheaper accommodation, e.g., self-catering, thereby considerably reducing the total cost, in real terms, to the tourist. Once constructed, the cheaper accommodation .,rovided stiff competition for the already expanding hotel supply and initiated a price war, to some extent even in winter. 40. In an attempt to establish the price competitiveness of the CARICOM group, the following were compared: (i)

(ii) (iii)

(iv)

comparative costs of tour packages from Toronto and London to the Caribbean and competing destinations. standard air fares from Washington, D.C. to different destinations, the comnarative costs of different tvyes of accommodation within the CARICOM group, i.e., mainly Hilton and Holiday Tnn hotels; althouvh onlv tangentiallv relevant because of the limited number of business visitors to the islands, per diem allowances for travel exnpnse niprooses werp also comnared,

Details of t-he comparisons nre shown on Tables 10-13 in the Sta7isirc2l Appendix. 41. Standard retuirn air fares from North Amrirn nrrnvide- the GarihhPan with a considerable competitive edge over most competing destinations simply becai-uis

tlhy nre hbcedrl on

n per mile- rat-e

Air farec

from tho onct

rcast

of

the USA are considerably lower to Bermuda, The Bahamas and Mexico than to all C.RICOM

countries

except Jamaica.

Obviously,

hIowever,a

the traveller

fl

further south the advantage diminishes. However, an analysis carried out for a, stn,ud of Jamaica in 1970 1I/4-n4-i-A the very wide range of excursion, youth and group rates available for most European destinations. These clearly reduced the overall costs of air travell on thle N,orth T Atlant-4c route well below standard fares and brought them to a very competitive level with Car'.ibLiean Alares despite the latter's greatter pimityo th U.S.A. Sincethe Energy Crisis trans-Atlantic air fares have increased by more than those to

the

C aribbUearn andiU are a.Lso less varied , so thLe

Caribb.eLan hLas pkartly

recuperated its competitive edge based on proximity to the US market. Air Jares to thLe Caribbeanl irom Europe h0-tevter are m0re LostLly. iThe collapse o Court Line, the main charter operator in the CARICOM group provides a set-back

Lo European demand,

although

the

poSSibility reamains15l

operator may take over Court Line's operation.

1/

that

anUther ChUarter

One effect of the Energy Crisis

See Volume IV, Current Economic Positions and Prospects of Jamaica, May 7, 1971.

-

I I

is to make even more uncertain than ever, the introduction of a one-stop ITC operation in thLe u"x. S1iort=-1aul destinations such as the Caribbean - but also the U.S. mainland itself - would be expected to benefit from such an operation, but at present it is strongly opposed by scheduled airlines.

42.

A comparison of package prices reveals that the Caribbean is among the more expensive destinations for Europeans, even with seasonal pricing in summer. An analysis of the comparative costs of Sunflight Tours from Toronto to destinations in the Caribbean, Honolulu, Mexico and the Mediterranean at different times of the year, suggests that price differentials are probably too marginal as between destinations, for price rather than destination preference to be the basis for a decision as to where to spend a holiday. 1/ 43. Analysis of the price of different categories of accommodation in the CARICOM islands suggests that the quantitative increase in price of luxury over A category accommodation is justified by the qualitative improvement in facilities. The price of self-catering accommodation overlaps with A and B category hotels, but the quality of self-catering accommodation also varies widely. Certain areas of the Caribbean (particularly Freeport in The Bahamas and possibly Jamaica) have cut prices drastically on lower category and selfcatering accommodation, but first class accommodation sells for a considerably higher price than in destinations elsewhere. The most spectacular price spread in terms of seasonal differences and variety of accommodation as well as rate structure, is seen in Jamaica and Barbados - though the lower spread seems to be more recent in Jamaica than in Barbados. The very highest hotel prices in the CARICOM group - and very probably in the whole Caribbean - can be paid in Jamaica, i.e., up to US$120 per day, single, full board. At most accommodation levels, Barbados tends to be more expensive than other islands, partly because of a greater number of high quality luxury accommodation units and an established tourist image. However, the constancy of the findings indicates a generally higher cost structure in Barbados than in therest of CARICOM and even the rest of much of the Caribbean. 44. The wide price range for accommodation indicates (i) the variety of accommodation mix, (ii) scant attention to price competitiveness except in the summer season. The price structure reveals a heavy proportion of first class and luxury accommodation - far more than in the world's other major resort area, i.e.'the Mediterranean, and than in most other tourist destinations. Furthermore, some of the world's most expensive and exclusive hotels are in the region, particularly in Jamaica and Barbados. In general, the quality of the resort assets justifies high priced accommodation. 2/ However, very recent 1/

Package prices however appear to De sufficiently attractive, particularly in the off-season, to make inroads into Canada's thriving domestic tourism market.

2/

The room cost in a luxury hotel includes a share in a virtually private beach, the use of recreation facilities that can include golf, tennis, riding, fishing. sailing etc. and sunshine, attentive service and natural beaty for the duration of the stay.

- 28 -

developments are forcing price reductions xX in almost all categories of accommodation, except luxury. With hig.her increases in trans--Atlantic air fares than in those to the Caribbean and witli increasing price, frequency and capacity control of charter operations, the Caribbean is regainiglR its competitive position with North American demand. Furthermore, high rates of inflation in Europe have reduced the dollar's purchasing power, all of whicl has combined to deflect long-haul travellers to shorter-haul destinations. In the Drocess average length of stay in the Caribbean appears to be increasing slightly. At present, therefore, the Caribbean has regained price competitiveness based on prioximity to North America. though in the process has

become even more expensive for Europeans. Very recent experience has shown a greater weakening in demand for summer tourism than for winter tourism.

11

In some cases hotel prices are being held at current levels despite inflation and in others prices are actually being reduced below those of last season.

- 29 VI.

THE FUTURE GROWTH AND CONSTRAINTS ON SUPPLY AND DEMAND

45. The analysis in Section II indicates that the CARICOM Community now appears to have excess accommodation in relation to current levels of demand. Forecasts of the future growth of demand are based on many uncertainties, are generally largely intuitive and almost always partial. UJnfortunately, unlike the producers of primary products, producers of tourism services are unaware of the income and price elasticities for their product 1/ in different markets and are also often unaware of the total number of beds within different accommodation categories that are on offer in any one season. 2/ Given its amorphorus nature, a very real question is the extent to which tourism demand is subject to quantitative measures of future growth in the same way as demand for other commodities. An additional uncertainty now has been created with the current level of world-wide inflation, particularly since there is no significant precedent of severe price and income distortions in the post war period against which to measure tourism behaviour. However, in those parts of the world where there is recession, a slowing down in economic growth, and/or inflation - or perhaps just expectation of these tourism demand is likely to be affected and probably negatively. Whether tourism is now largely regarded as an integral part of consumer expenditures or whether holiday expenditures are part of discretionary income, remains to be observed during the period of uncertainty. 3/ The Market 46. In a market analysis two separate demand forecasts are necessary for the CARICOM group: one for Jamaica and one for the rest of the islands. Jamaica's proximity to and heavy dependence on the USA make its demand characteristics more comnarable to the rest of the northern Caribbean 4/ than to 1/

Tourism has no research organization parallel to the FAO, the Coffee and other Commodity Agreements, and OPEC, but this gap may be filled in part by the new UN agency: the worid Tourism Organization (WTO).

2/

In resnonse to the need for information, the World Bank commissioned a study of the supply of tourism facilities in the Caribbean which is nublished as an annex to this report.

3/

Most probably consumer behavior varies according to income levels, climate and availability of alternative recreation facilities in the point of tourism origin. Whereas the price of a holiday in Spain is one component of the consumer price index in Sweden, for middle to high income earners in the US, vacation expenditures are more likely to form a part of discretionary income divisible between saving or investment and expenditure on luxuries or recreation.

4/

i.e., specifically Puerto Rico, the Bahamas and the US Virgin Islands.

- 30 -

the eastern Caribbean. HIowever, some positive features of the present situation that are common to the whole region can be identified. Winter tourismespecially to luxury hotels (the small, elite, enclave-type) may be the demand segment least affected, since the higher income groups generally have better hedges against inflation and recession, while inflation may redustribute income in favour of already high-income grouns. Demand from individiuals may be stimulated by a decision to switch from the private car to public air transnort- and nrice reactions should nroduee a switch frnm lncg--hbii1 t-n short-haul vacation travel. Furthermore, because of higher increases in air fares nn the North Atlantic rotites thnn on rAii-qoitn the r.qrihhpqn (abouit 40% and 20% respectively to date) the region is beginning to regain its eompetfifi-j ndunntanoe bae n nroximnity, while- tlqchange in the st-rucnture of air fares are more likely to reduce demand on the North Atlantic routes than An thsen ti thi Grib-eann. Tho cnntinutiorn nf excs capacity it.nncom- Ation (plus more self-catering), combined with slow growth of demand in 1973 Anrd 1Q7L - ic inc-as-ing --~e- forcing lnowr nrir-e r---- fnr --nrnommneSit-n, 010 - w.hich which 4s ~is further _ _ . the Caribbean's competitive advantage vis-a-vis other areas. Optimism seems annropri2t-P for t-h- Canadian market, npavrticularly give n the- -41ilence of charter operations there. Related demand, at the bottom end of the tourist srale, i_e_ , fnr lf-enterina nrPnmmodateon ptan particuarl4n winter, should also remain strong. 47. By the same token, common adverse features can also be identified. The Energy Cri-sis has prevent-edadecision from the-US Civil Aeronautics Board (CAB) about the introduction of a one-stop Inclusive Tour Charter (ITC) wVhc"i would sOkmulate short-haul group travel fro tiC -... USA. 1/ Bo conventio. and incentive travel depend on the level of business profits as well as on corpora'Le Lj'IJiaL 'Lax LTere profits to UUCL.L.LLLLc decline and --xe to be raise (as LC1A m.easures. ii~.i~UI.c. FLWcJ .LL.L DLU CLL.u 6a~ LWU~ L a±CX _U ~~ well as loopholes closed), group business travel on which the Caribbean is partly depeniuent couldU ue severeLy afLfectedU. iJgher tranisport costs from Europe are unlikely to be compensated by reduced prices for accommodation and thiLerefUore E,ruLopptean deman[L

is

unlikely

to

charters were initiated a year or so ago.

Fl-UrL

iSh,

as

see.iieu

pUbleU

W-we

Growth of income in Venuzuela and

closer ties between thle Cariubean ar,u LatLin American countrUiSes, may partially offset other declines in growth, but the population sizes and income segments Involved are relatively small. Furthermore, competition for tourism demand is likely to be even greater in the future not only from traditional destinations but also from the new ones that are opening up within the Caribbean itself verv close to North America, i.e., Dominica Republic, Haiti, the Caribbean coast of .iexico and even possibly Central America. Furthermore, Cuba's enormous tourist potential remains a sleeping giant, though lately there are signs of awakening. These areas are without the stigmas attached to traditional Caribbean tourinm destinations, have a greater sulpplv of locally produced inputs needed for the hotel industry and therefore presumably a lowier cost structure. I/

rhartesr nnprntirR hplipve that resort dpqtination within the USA itself may be the areas for which demand is greatest were the one-stop ITC to be introduced. This report ronrpntrntpc An nomnptitorA in other Islands and foreign countries but the State of Florida is also one of the Caribbean's rnmost rtn rmettr

- 31 48. Jamaica 1/ must be concerned about price in relation to nearby competitors and about retaining air capacity to the island. Demand in summer is likely, because of substitutability, to weaken more so than for the winter season and the closure of several hotels on the north coast in September and October 1974 indicates a weakening of demand in the off-season. Purely because of location, Jamaica's main concern must the reopening of Cuba - as a glance at a map shows. Some of the immediate problems of the Eastern Caribbean may be of a short-term duration and result from the collapse of Court Line, the U.K. conglomerate, which operated charters to the Eastern Caribbean from the U.K., had three hotel investments in Antigua and St. Lucia, and, most important for all LDCs, operated the main inter-island air carrier LIAT. 2/ Europe has always played a more important role in tourism demand for the Eastern Caribbean, so increased fuel costs and internal inflation, in the U.K. particularly, are likely to restrict demand on scheduled airlines and, together with Court Line's collapse, severely curtail the growing charter market. The Eastern Caribbean is likely to be less favored than Jamaica by more competitive fares with Europe simply because of its greater distances from North America. The Eastern Caribbean is highly dependent on foreign airlines for air capacity and frequencies. The slow growth of tourism to Barbados in 1973 (7.5%) and until May 1974 3/ (5.5%) reflects these factors, as does the significant decline in numbers of US visitors to Antigua in 1974. Information from St. Lucia indicates a severe decline in hotel occupancy rates in 1974. The Longer Term Market Perspective 49. The above analysis however constitutes a rather short term perspective of the market. A longer term view is that the Caribbean's su1perb resort assets, year-round warm climate, location next to such important generating markets as the USA and Canada combined with income Rrowth and scarcity of beaches in these countries (as well as a rather harsh climate in Canada), ensure the eventual growth of demand for Caribbean tourism. That growth in fact seems likely to meet a physical constraint before it can be satisfied. 4/ Given the relatively small size of the sector in most islands in relation to their physical size, growth constraints from physical resource endowments are unlikely to arise in the 1972-77 period. The physical plan for Barbados estimates that the present number of beds can be expanded by 125% before 1/

In 1973. stop-over visitors to Jamaica erew by 2.6%, their lowest rate in years, and increased by 5.7% to July 1974 compared with the same period last year. hbut growth has slowed since May 1974.

2/

Discussions are in process between regional governments and air carriers about new arrangements for inter-island transport, but as of October 1974 no agreement had been made public.

3/

Latest data available.

4/

This discussion is weakened by Cuba's much larger size and beach capacity relative to the rest of the Caribbean. A reasonable presumption however is that Cuba will tend to appeal to a different type of demand that for the Eastern Caribbean.

- 32 -

physical limitations occur. Table 21 shows that Barbados is one of the smaller islands. By comparison, total accommodation in all seven LDCs is the equivalent of only 75% of Barbados' capacity, so that room for expansion of the sector is still very great. Transport Access 50. The main constraint on growth to the LDCs and to a lesser extent to the MDCs at present is not a fixed, irremovable constraint but is seriolus, i.e., the lack of direct air access to all LDCs islands except Antigua and (partially) St. Lucia from major tourist generating markets. The availability of direct access does not of course guarantee growth. Dominica, for example, has difficult access but also limited resort assets, poor accommodation and temporarily at least, some elements have shown hostility towards tourists. Dominica's relative failure to attract investment capital to its hotel development projects, which are based on careful physical planning, may be due to these factors or to an inadequate airport. However, the Frigate Bay Development Corporation in St. Kitts, an island that also has limited resort assets, began to receive firm investment proposals only after a decision to built a runway suitable for jet aircraft was finally announced. Antigua's early growth can be attributed to its US army-constructed airport. but also to its location at the crossroads of several air traffic flow patterns, which make the island an interchange stop-over as well as a resort destination. However growth of tourist arrivals to Antigua has slowed in recent years, despite the attractiveness bf the resort assets. While limited growth of tourism in St. Vincent and the Grenadines is attributed to poor air access, almost Rauiallv diffietilt air arrp.qs has not nrevpnted tnourism erowth in Grenada. St. Lucia's jet airport is one and a half hour's drive from hotels in the northern section of the island, whose alternative rrss is by a nearby non-jet landing strip, which generally involves the tourist in an overnight stay in either A.nitigua or Barbados. However, tourism growth in St. Lucia has recently become very dynamic. 1/ 51.

The lessons seems very clear. Where air access is difficult but dynamic growth rates can be achieved at the early stages of tourist development but a major expansion of the sector becomes d ,iff4cult. r,, the ote U__ A -uer-ior assets and good air access cannot

resort assets are superior, A. .LA

X

A.UX *

tLL

L.

iLL

tJW~ LLUC

UJL *t-

,

-oy1.&.-

Sl

aoO~..aI~

a

-'-t.

guarantee tourism growth if there are other flaws in the product. most

'Ll-Le FEastern Caribbean oribinates at

tourism to

Since

four to ten hours'

fly-ng

time from the islands, few travellers can accept with resignation a long drive over

[LmountaiLs

at

tIhLth

ndUt .

ofL

-

as

i-r

S.L.

Lucia

and

Dominic.a.

For ,mny

the

idea of spend a night at either end of the trip as a stop-over, is viewed as a 2-day curtailmerit oflthe holiday even if It _s spent in a4.t -her island. Te

1/

Hotel managers in St. Lucia told the Mission that the discomforts of the trip are the only serious complaints by tourists when assessing their holiday. They added that the adverse reaction to the journey is so frequent, that the hotel manager and his staff devote their energies to placating the exhausted and often irate guests on arrival.

- 33 undesirability of the stop-over is compounded when inter-island transport is The problems of LIAT and the many other smaller short-haul unreliable. carriers that operate in the Caribbean (e.g., PRINAIR, WINAIR) are enormous. The frequency of take-off and landing makes the operation very costly. With night flying prohibited in some islands and with difficult landing approaches and climatic problems, plus the attempt to coordinate inter-island transport with international departures and arrivals, scheduling becomes complicated and delays are frequent. Furthermore, the limited availability of spare equipment The main - and in some islands the makes cancellations a frequent occurrence. only - intra-regional carrier for the LDCs (as well as other territories of course) has been LIAT, which when privately owned by Court Line operated at a loss. The service was an essential one but the company was run as a commercial High level staff stated that the technical aspects of the operation enterprise. had greatly improved but that the probabilities of its profitability were minimal without some form of government subsidy. 1/ The dependence of passenger traffic to, from and between the islands on air services, would seem to warrant The a greater participation by governments in the airlines' operations. present system tends to freeze tourist travel patterns to and from Barbados or Antigua and a single LDC. An improved service would greatly encourage tourist mobility between islands. Direct air access depends on (i) the volume of traffic, (ii) adequate 52. i.e., essentially a runway capable of taking jets infrastructure, airport preferably the larger ones - and (iii) the existence of a bilateral agreement between the island and the foreign country to provide a scheduled service. At present, the U.K. negotiates bilateral air agreements on behalf of the Since Associated States, i.e. for all LDC's except, very recently, Grenada. the U.K. represents many varied interpsts; those of the LDCs are not Since all the LDCs except Antigua, depend necessarily paramount at all times. airport in the revion and secondly on another to services scheduled on first they are virtually excluded from airport, that from transport inter-island the decision-making process about air access, which is without exaggeration. the life blood of tourism. 2/ The only LDC to receive charter regularly and directly has been St. Lucia. Charter traffic depends of rourse, on the profitability of the operation to the organizer in the tourist supplier .market, as well as on pre-negotiation between governments- Denendence on an external metropolis is a characteristic common to tourism destinations, but if not exclus4ive to tourism but often an attribute of a service or production

unit in the export sector. Nevertheless, the extreme dependence of the LDCs cotr-asts -with the greater bDargair.ing poe--r of the ___ whih s ehace by their political independence, the size of their tourist and business traffic, their transport infrastructure and their ow.ership of anational airline - though Barbabos has only recently acquired one. 3/ 1/

A subsidy can consist of direct payments or waiving for reduction of certaLn fees, taxes, etc.

2/

Not to mention its importance for all other sectors of economic life.

3/

International Caribbean Airways, a subsidiary of Laker Airways International, has been des'ignated flag=carrier for Barbados on routes to the USA. ICA is not a member of IATA, currently operates three flights a week from Bridgetown to Luxembourg and London.

- 34 53. Islands where airport facilities are inadequate for tourism growth are Grenada, St. Vincent, St. Lucia (the northern end), Dominica and Montserrat. 1/ Where tourist numbers and the size of groups are not large, an improvement in inter-island transport, e.g., between Barbados and Antigua and the LDCs might be an effective substitute for direct air access. Given the present inefficiency of services, such an improvement is a necessity anyway. Only after a careful planning exercise that establishes the future optimum scale of the sector, should a substantial investment in airport infrastructure be undertaken. The volume of traffic may never justify the construction - if the investment is appraised by conventional cost-benefit analysis. 2/ Whether this justification is appropriate, if foreign aid on non-commercial terms can be obtained and if tourism proves to be the island's most viable - or perhaps only - development option, is a subject that seems to warrant analysis in the context of the LDCs. In a related theme, none of the LDCs have good facilities for berthing of cruise ships. However, the current expansion of St. Lucia's port facilities should help to attract more boats. The CDB has annroved IoRna for port improvement in Dominica and St. Vincent and is considering such financing in St. Kitts and Montserrat. The Fastern Caribbean is ideally suited for cruising year round because of the close proximity and variety of the islands. W4ith improved infrastructure facilities as well as more and better hotels and recreational facilities, the prospects for growth of cruise traffic seem rather bright. Furthermore- the nopularitv of flv/rrtiiie holidays has been increasing. Few islands however make specific provisions for cruise visitors in their island facilities. Thouieh the need for better planning for these visitors is evident, an in-depth analysis of their costs and henefits -

- and noliripe

soci21 aR well as finnnrin1

to maximi7e

the net

benefits from cruise traffic need implementation equally urgently. Internal Growth Constraints 54.

The growth of real income in tourist generating markets obviously

escapes rhp cnntrnl of CARTCrVI gouernmPents

Their depnpncaneA

on foreian

airlines and on international air agreements prevents their influencing the p,rile nf t-rave

t

t the

aibea,

and most invt-2ni-lx

o,f

transport capacity

as well. Ilowever, the final product as sold to the tourist depends on numerous factors subject to public -a p4-Arivate -er.- polic4e, -d controls. Some of these influence the price and others the quality of the final product. To a considerable extent the organization and adminstraton of the sec-or an determine the market success of the projects. Given its many facets, tourism cuts

across duifferetL r

ectors,

e.g.,

retal,

transport,

production,

so

that

the creation of a Ministry of Tourism as in Barbados is particularly important, 1/

The international airports in Jamaica (at Mobay and Kingston) are to be expanded with IBRD loan funds; Seawell airport in Barbados has been expanded with CIDA assistance.

2/

The construction costs in Dominica, for example, would include the costs eitner of leveling mountains or reclaiming sea land,

a stuitable site.

in order to obtain

since policies for the sector can be debated at Cabinet and therefore interministerial levels. Jamaica as might be expected, has the appropriate institutions and particularly highly qualified management and staff in both the public and private sectors. A serious weakness in recent years however has been lack of coordination in planning, owing to a division of responsibilities for future development and current management ot the sector, which has led to over expansion of tourist accommodation. 1/ As a broad generalization, most LDC governments have had a laissez55. faire approach to tourism partly because of very recent self-government, of the complexities of managing a tourism sector, of their own lack of expertise, and because of the heavy demands made on governments' limited manpower. In LDCs where foreign investors have brought in technical know-how, i.e., mainly the chains, the private sector has often contributed to improved marketing and promotion techniques for the island as a whole. 2/ However, only if the public sector in each island recognizes the need for controls and for appropriate incentives, i.e., to introduce investment and to induce lower prices of inputs and of the final product, will the sector expand and its quality be maintained or improved. Close cooperation between the public and private sectors is important and was observed in many islands. 56. Promotion is an important tool in tourism development and, with the exception of Jamaica, receives only meagre allocations from other governments. The Government of Jamaica increased the budget for the Tourism Board from US$1.5 million in 1963/64 to US$3.3 million in 1968/69 and to US$7.9 million in 1973/74. The 99% increase in expenditures between 1968/69 and 1973/74 compares with an increase in estimated foreign travel receipts of 36% during the same period. The budget amounted to 6% of foreign travel receipts. The Jamaican budget includes allocations for the hotel school, guides, traffic police and other expenditures but promotion accounts for about 90% of the Tourist Board's budget - most of it in foreign currencies. In 1972, Barbados spent some US$750,000 on promotion. By comparison Jamaica received 360,000 stop-over visitors and Barbados 210.000; the average length of stay is roughly similar. These results could be interpreted either as a major success for Barbados or a major failure for Jamaica. A clue to the reason why Barbados survives so successfully in the cut-throat market for tourism is given by the Doxey Visitor Survey carried out in 1970 which showed that only 19% in winter and 12% in summer of the visitors interviewed were influenced by promotion in their decision to travel to Barbados. On-the other hand, a very high proportion, 44% in winter and 57% in summer gave as their reason for travel, recommendation by friends and an even higher proportion in both seasons gave 1/

Trinidad and Tobago are excluded from this discussion simply because the sector is small in Tobago and Trinidad has taken a deliberate policy decision to curtail tourism growth.

2/

As discussed elsewhere, the interests of the private sector do not necessarily of course coincide with those of the public sector nor with those of the national interest - in those cases where the two latter are not identical.

- 36 climate alone as their reason for travel. Another significant finding of the survey was that repeat business was very high - which has always been a characteristic of luxury tourism demand. 57.

Promotion should normally stem from an official government budget,

regional promotional organizations, airlinec qprving thp icland

ind1iidiinl

hotels, chain hotels and the local Hotel Association, cruise ship lines, wholesalers and travpl agents. Thp only regional agencies of which the LDCs and MDCs are members are the Caribbean Travel Association (CTA) and the Carihbban Hotel AsRnrintinn (CHA); some nf tihe L.DGs aro also members of the Eastern Caribbean Travel Association (ECTA). Since the island are poorly served by international airlines and hotels, external private sector promotion is minimal. Among the LDCs, those with a diversified accommodation ownership pattern (particularly In St. Lucia) rely less on gover.n.m.ent promotion. programmes. In Dominica where national ownership (defined as permanent resident) is almost 100%, the island receives virtually ,o independent promotion and the meagre Tourist Board budget is spent almost exclusively on ECTA funds ,andcontributions to membership of regional organ.izations. Tourism specialists argue about the importance of promotion but there is little question t.hat it is essential at' th~e eOarliest stages of tourist L eveloApmen Definitive totals are not available but partial analysis indicates that official LDC tourist entities asa whole, spend much less than Barbados alone on promotion. Therefore, few LDC governments can be said to adequately U-Aerw%4te thle islar.dAs promotiotn budA gets. Promotion witbout tLle 4f aclitiX es can, of course, be a two-edged sword and should be carried out only by those islandls w-LLLt spare capacity anAu with goolu resort "assets t owevr promotion = and marketing - in the CARICOM group at present is inadequate for the future growtiL

1 LLe

__.

Growth

t

Lle

scLor.

ofL SuppJly

Jo. Ai atter.tpt has been ra'e to derive the growth raLes implicic in existing accommodation and in that under construction, as an alternative to direct demand estimates wnicn are dilficuLt to

quantiLy

adlU as

aii iilUication

of the likelihood, based on past growth, of attaining these targets. The first step in the exercise consisted of calculating the growth rate or supply in each category in the 1973-77 period.

-

Table 9:

37-

Growth Rate of Supply - Annual Compound Rate 1973-77

Hotel %

Guesthouse %

Cottages/Apt. %

Total Additions to Supply % 1968-72 1973-77

8.1 1.1 0.5 0 0.7 0 11.0 3.7

0 1.9 0 0 0 0 5.1 0.8

15.7 5.7 11.2 0 9.3 13.1 0 7.8

8.2 1.5 3.9 0 2.3 0.7 8.7 4.2

5.8 26.8 19.8 7.9 22.7 38.8 16.1

Barbados Jamaica Trinidad MDCs

1.2 7.0 4.5 5.5

0 0 0 0

4.6 0 0 2.1

2.6 5.3 4.0 4.5

6.7 14.2 5.6 10.9

CARICOM

5.0

0.3

3.1

4.4

Antigua Dominica Grenada Montserrat St. Kitts St. Lucia St. Vincent LDCs

Source:

Table 14 in the Statistical Appendix.

The above data were collected in 1973 and refer only to prolects 59. then under construction. The time frame gives ample opportunity for their comnietion before 1977 and of course also for new projects to come on stream. The Shankland Cox study suggested that considerable additional accommodation was then at the planning stage throughout the Caribbean. Within CARICOM most of it was in Jamaica. The above, therefore, reflects conservative expectations about the likely rate of growth of additions to accommodation during the period to 1977. These show that in all islands except Antigua the growth rate of accommodatlon

during 1971-77 will be considerably below

that of the previous period, if projects at the planning stage do not come on stream. Hotel accommodation will have the most dynamic growth of all accommodation in CARICOM as a whole, with major increments in St. Vincent, Antigua and Jamaica. The slow growth of additions to guest-houses coould reflect market factors but also the greater difficulty of acquiring information about these small uuits. The growth of self-catering accom.modation will be dynamic everywhere but in Montserrat, St. Vincent, Jamaica and Trinidad. Again, however, this is a difficult category about which to obtain information and of course data on condominia were omitted. The judgement whether an average z.nual growth of 4.4y

in.total

accMomdation seems reasonable denends

on the level of occupancy in the base year and the growth prospects for the .uture.

Occupancy Rates in Projected Capacity 60. The average annual compound growth rates of tourist arrivals necessary to maintain break-even occupancy, and optimum occupancy rates i; in tne projected capacity levels, were calculated. The optimum rate may be defined as the miaximum realisLically acEainaDle Defore new aaaltions to capacity become necessary and the break-even as representing the minimum level of capacity utilization desired by the investor. The following results emerge: 2/ Table 10:

Percent Average Annual Growth Rate in Tourist Arrivals

Island

1968

Actual 1972

Implicit in Different Occupancy Levels Optimum 1972 1977 Break-even

Antigua Dominica Grenada Montserrat St. Kitts/Nevis/Anguilla St. Lucia St. Vincent ALL LDCs

6.7 10.2 13.0 15.2 13.5 17.0 11.4 10.6

41.0 13.4 6.3 6.7 30.5 40.6 31.8 32.0

32.8 6.5 neg. neg. 21.9 32.5 26.2 24.0

Barbados Jamaica Trinidad and Tobago

16.0 12.1 5.7

9.0 14.0 14.0

4.0 9.0 6.0

ALL MDCs

12.0

13.0

7.0

CARICOM

11.6

18.0

1/

Occupancy Rates (OR) assumed for Analysis Break Even O.R. Optimum O.R. Annual Average Winter Summer (Jan.-Dec.) (Dec.-March) (ADril-Nov.) Percentages Percentages

By type of Accommodation Hotels .e

12.0

I1ousesg

Apts. & Cottages

80

70

60

60

SO

40

80

70

50

The occupancy rates refer to bed rather than room occupancy. Bed occupancy rates can be substantially lower than room rates in apartments and cottages. However, given the frequency of double occupancy in resort hotels in the Caribbean, differences between bed and room occupancy rates should not be as significant as in business oriented accommodation. _./

Tlhe excellent

dsata uase available

in Barb dAos enabled ..ore sophi sticated

techniques to be employed that are described in Appendix III: of

L1intear

'Lrogramm,ling

to

tLlAe

±AnailysIis

ofL

Ltte

BarbadoasL'

IVUL

An Application 0-rLL%J. SLect

- 39 Quite obviously, Antigua, St. Lucia, St. Vincent and St. Kitts/Nevis/Anguilla will have difficulty in achieving their growth objectives. A supply constraint would seem to exist in Grenada, Montserrat and Barbados, compared with a reasonable equilibrium between the past growth of arrivals and current additions to supply (excluding those at the planning stage) in Dominica, Jamaica and Trinidad and Tobago. However, extrapolation of past trends is quite obviously a highly imperfect device for measuring future growth. The Future Growth of Demand 61. For reasons explained in the respective economic reports for Barbados and Jamaica 1/ and in Appendix VII for the LDCs, a series of demand growth rates have been selected for each island for the 1972-77 period. These projected rates merely represent an attempt to quantify the discussion in this chapter. These growth rates and the 1972 average length of stay estimates have been applied to 1972 data of tourist arrivals. (The results are shown in detail on Table 15 in the Statistical Appendix). The resulting bednights figure was applied to 1977 capacity as calculated in the previous section and the following results were obtained:

Table 11 Average Annual Projected C-rowth

Island

of Tourist Arrivals

Implicit Occupancy Rates in Tourist Accommodation

(1972-77) I

(%)

Antigua Dominica Grenada St. Kitts/Nevis/Anguilla

6.5 10.0 6.5 6.5 15.0

St

32.J

Montserrat Tu.i4a

St. Vincent

10.0

TOTAL LDCs Barbados Jamaica Trinidad and Tobago

I

1977 A.,I

1977 I

()

20 50 80

29 4

18

93 43

9 25

42

12

48

100

4.0- 8.5

55-68

8.0-10.0

57-63

5.5

56

TOTAL MDCs

57-63

TOTAL CARICOM

54-59

1/

Market Shares of T.ourlst Bednights

24 65 11 100

Given the policy decision not to encourage tourism growth, and given sufficient spare capacity, the historic growth rate has been extrapolated for Trinidad and Tobago.

- 40 -

62.

Obviously,

even with no further additions to accommodation other than

those under construction, St. Vincent and St. Kitts are likely to disappoint the expectations of investors, assuming the accuracy of break-even levels postulated earlier. The situation of excess capacity in Antigua seems very serious. Grenada and Montserrat appear to require an expansion of accommodation, while St. Lucia and Dominica should fail by little to meet investor's minimum expectations. The situation seems much healthier in the MDCs. The main storm on the horizon would seem to be the rather large additions to accommodation at an advanced planning stage in Jamaica. Were these to come on stream as planned, some of them could be in operation during the period and then occupancy rates in 1977 could be very much lower than shown above. Forecasting tourism growth at this time is rather like playing Russian roulette, though the odds on a correct guess in Russian roulette are probably rather higher than in the present exercise. In the case of forecasting for Jamaica, note must be taken of the very low growth of 2.6% in stop-over visitors in 1973 and in the Eastern Caribbean the Court Line collapse has had repercussions whose duration is uncertain. However, in general the above growth forecasts and implcit occupancy rates reflect the Mission's best judgement of the likely situation in the tourism sector in the CARICOM Community by 1977.

- 41 -

VII.

THE COSTS AND BENEFITS OF TOURISM

63. The ultimate obiective of any analysis of a tourism sector must be to establish the social costs and benefits of tourism as a development tool. The question is specifically addressed in Volume VIb of this study and this chapter assumes readership of that study. Some recent literature on the sub-ject has tended to indicate that the economic and social costs of tourism development are rather high. A weakness in such studies is often their lack of relativity. Other sectors do not attract or lend themselves to similar analysis, therefore the manufacturing sector, mining, etc. are often rot stubipcted to similar s ruttinv by Pconomists;. soiologtists

Pnvironmpntalists

and anthropologists. 1/ Furthermore, unless new development opportunities are unCovnered- rnntriniiud eronomnic gnrow.7th wouiil d ceem to diepnd on tourism

to

a

greater or lesser extent in almost all islands. The radical response would bo to npt fnr no grnveth nr naco:uti grnowth rathpr than eo-nnnomi arntwth hnsed on an activity considered demearing. A more moderate approach would suggest that as tourism growth has been rather rapid, governments in most islands have not recognized it as a sector of final demand, therefore public policies have r-.t yet, ben effect-4,ivr in canngingy hasc4 prrnoductinn finctironc ton csrvic torism demand from local resources. Consequently leakages have been tolerated lA and the net benefits from tour4sm have often been below their ntentil l Furthermore, because of ineffectiveness in the public sector, the distribution of the benefits of tourism has often been inequltable. The interests of the local people have often been neglected in favour of the investor, who has genera.l.ly b'ieen fLoreiLgn.

TLhis chapter attempts to establish the contribution

of tourism to gross product, foreign exchange and tax revenues and employment, and' to id'ent'ifly, iLn

the

process, 'less quantifiable costs andu benetfits as well

as weak linkages to other sectors that are a cause of leakages. Gross Product Estimates A significant measure of the contribution of tourism to economic growth' 'Ls throughLL'Lts

conLtribution

'Lo

gross national product.

21

Gross Proluc

estimates are few and far between in the Caribbean and are generally based on s7ugh calculations, as follows:

1/

No apologv is intended - only an attempt to return a balance to the perspective.

2/

One of the problems entailed in caicuiating value added in tourism is that tourism expenditures cover a cross section of CDP components and the financial data on which to base calculations on the income method are not generally available. Furthermore, as tourism is a sector of final demand and input/output tables are generally not available, a ditficulty arises of eliminating intermediate goods when using the production method.

= 42

=

Table 12

Gtross Prouuct EstLimates

Island Antigua Bahamas Barbados Jamaica

Definition of Gross Product GDP

GNP GDP GDP GDP

Percent Contribution of Tourism 40% - 50h

55% 77% 20% 6%

Source

IBRD IBRD IBRD IBRD IBRD

Some of the above estimates make allowances for the value added of all tourist expenditures. However, the Jamaican estimate comprises only value added in the hotel sector, while services, as a group, comprise over 35% of GDP, part of which logically is generated by tourism. The Bahamas' estimates differ by the income accruing to all factors of production (GDP) and that accruing only to national factors of production (GNP). Later sections of the report discuss the related issue of leakage of revenues from tourism. 64. Although estimates are not available for the rest of the CARICOM group, the contribution of tourism to GDP is likely to be high - possibly at the lower level for Antigua - in islands which are less diversified and in which the tourist sector is significant, e.g., Grenada and Montserrat; followed by St. Lucia and St. Vincent and then by St. Kitts, Nevis, Anguilla, with Trinidad and Tobago at the bottom end of the scale. Obviously, a more careful quantified analysis is necessary once more data are available. A consideration in this context should be the low opportunity cost of the factors of production employed in tourism, i.e., unskilled labour, beach lands and even foreign capital, 1/ specialized tourism know-how and services. The Economic Rate of Return A measure that would be of interest for each CARICOM island, would be 65. the internal rate of return on a tourism project, compared with the return on proiects in other sectors. Unfortunately, data for the Caribbean are not available since the IBRD has made no loans to the tourism sector in CARICOM countries. However, the Bank's global experience with tourism projects has shown that the economic rate of return can be very satisfactory, even when the financial return meets only minimal requirements. since a tourism project induced expenditures not only within the project but also in other service and

1/

The assumption is largely correct since (i) most foreign suppliers of foreign capital for tourism accommodation or services are unlikely to have alternative uses for their capital in the islands - but rather in resort destinations elsewhere; (ii) only a limited amount of scarce multilateral funds have reached the tourism sector in the CARICOM group.

production sectors. 1/ Tourisir

tends to employ a high proportion of unskilled

and semi-skIlleUd

1otel'ts ten totalA. Labour Lorce and h

i

wULKUL

iLLts

labor intensive as light manufacturing industries. employed to discount

u-ie

cost

OL

to be

as

If shadow-pricing is

unskilled Labor anditoLncrease te value

of revenues (and, of course, expenditures in foreign currencies) the economic rate of return is normally substantially above the assumed opportunity cost of capital. Foreign Exchange Revenues The most evident benefits and costs from tourism are foreign exchange 66. revenues and the costs of imports (goods, services and borrowed capital) to sustain tourist demand. Obviously both the level and distribution of tourist expenditures will vary according to the type of accommodation and/or tourists! income levels. Few CARICOM islands have up-to-date statistics on the level of tourist expenditures. Therefore the Mission has reconstructed the likely level of foreign exchange revenues in 1972 from data for arrivals, average length of stay and arbitrary average daily expenditure estimates, based on partial data for some islands and the relative price structure between islands. 2/ To this somewhat flimsy basic structure for 1972, the Mission applied the growth rates for demand assumed earlier. (The data are shown in detail on Tables 16 - 18 in the Statistical Appendix and are summarized below.) Data for the MDCs were almost complete for 1972 and the growth forecast for arrivals was assumed to apply to foreign exchange revenues. Revenues for 1977 are in 1972 prices, i.e., no allowance has been made for inflation. In general, few changes are expected in average length of stay or in the level of tourist expenditures. 3/ However, in St. Lucia, the level of tourist expenditures seems likely to increase on an average daily basis as well as on a total stay measurement, i.e., because of a projected extension in the average length of stay and because the quality of much of the new investment is above that of most existing accommodation and is therefore likely to induce higher daily expenditures. The situation is similar in St. Kitts, but the new accommodation is not expected to come into operation before 1977. The following table shows the Mission's forecast of 1977 foreign exchange earnings from tourism:

1/

An overall impression is that accommodation only absorbs between 40% and 60°'/ of tota

tourist ex penA.iures (excludir.g international

Lranspo:t.-aon)

The remaining items of expenditure comprise entertainment, local transport, purcases

anA..

someU

gooAJ

a,,u

UCeverages

2/

Because of their limited number, no allowance has been made for domestic tourists. All tourism revenues are therefore assumed to be in foreign exchange.

3/

This assumption may be unrealistic since price competitiveness may force 'ln-hau f ces, bu;J the the switc prices do:adseeUb =VCLL.UI inv 1972 IUL L3I~IC L.LIC bW.±LA:U1 LJ~±UL1-Ld1UJ. es.L.. UWLJWLWaL /71- pr' PL L.='> travellers to shorter-haul destinations could produce an offsetting iLncrease iLn average 'lengthIL of stay.

- 44 Tourism Foreign Exchange Revenues 1972 and 1977 /a

Table 13:

Foreien Exchange Revenues /b US$ Million - 1972 prices 1972 T.ew TLCs MDCs CMRICGnM

30-8 154.7 187=4

Growth Rates Average Annual Pereent 1972-77 1972-77 Ht h In Lnw /e

1977 _ High Ir

56=8 214.3 271=1

67=4 280.3 348=0

13 7

17 13

7

13

/a

See Tables 16-18 for details on each island.

/b

Excludes cruise revenues which are shown in the Statistical Appendix.

/c

The low forecast assumes an average annual growth of 4% for Barbados and RY-A_ eOs grth oecs of MIT0 . L ^for BaQ _4 +-I a lg OQ % o_rTama4'sVx iV cL.wo sc i - *v A.-L. L w f a v xL.J au A.Lit c .i uJ,o and 10% for Jamaica. A low and high estimate were also calculated for CL*

_La

average daily. expd

re

--ac

4n

-is-d

v7. Few surveys have been. con.ducted or. the cost of goods mported for AU L L.U ua & A VI* Studies whose depth is not always clear, suggest the the tourism sector. Lolluowing leakage factors ir, the C bbe d 13CLuda. 6

WC

ILLa

%,J

Leakage of $1 tourist Barbados Bermuda Cayman Islands Puerto Rico Jamaica St. Vincent

42 30 30 21 34 (50 (35

c c c c c c c - 40 c -)

%A

L

L.A

.

i.J

L.

A.

%4JU

Li.

.15i

.LU ...J.

tXpendLture

(G. Doxey, 1970) (Cambridge Research, Inst. Mass. 1971) (Not known) (Economic Associates - Puerto Rico) (Central Planning Unit, Jamaica 1970) first class hotels other accommodation (Llewellyn-Davis '72)

Leakage may be defined as the extent to which revenue from tourism is Obviously repatriated in the first round of expenditure by the receipts. these estimates give rise to concern about the net benefits from tourism development. 1/ Unfortunately no comparable estimates are available for the leakage from other sectors, but given limited natural resources and a alrge external trade sector, the suspicion remains that the import content of almost any economic activity in the CARICOM group is high. Quite obviously despite an often dynamic growth of visitor arrivals, the linkages between remain to be created, if their creation tourism and other sectors still is indeed feasible.

1/

The leakage in countries such as Mexico, Spain and Yugoslavia is negligible.

-

45 -

In Jamaica, where data are available over time, the employee:room 68. ratio has declined steadily. The experience seems to be common to the region because (i) the mix of accommodation has changed over time and the weight of less labor intensive chain hotels and self-catering accommodation has increased; (ii) the annual fall in occupancy rates has led to a profit squeeze which has caused operating expenses to be curtailed as much as possible - labor has probably been an early victim; (iii) most hotel employees are unionized which has helped to raise wages and therefore payroll costs, which in turn has induced management to attempt to obtain greater productivity from its staff; (iv) summer tourism pares off considerably the trappings of winter luxury tourism and as such involved an eight-month operation with a much smaller staff. If the data are correct, the number directly employed in tourism in the CARICOM community will increase from 19,720 in 1972 to 23,187 in 1977, the increase in the LDCs will be from 3,629 to 4,418 and in the MDCs from 16,091 to 18,769. 1/ The interesting question, of course, is the cost of direct job crea69. tion in tourism. An attempt has been made to estimate the direct investment cost of accommodation at present under construction in the LDCs in constant 1974 prices, using approximate average costs for each type of accommodation; similar results might be expected for the MDCs. The exercise is very crude but is shown below: Table 14

No. of Rooms Investment Cost US$ Thousands No. Employed Average Cost per job US$

|I .:l

A A

_ule

LUA.L

of UJ.

-.h.um

L.L&UJ.UU

sometimes JU

L

S

u

Hotels

Guest-House

649 12,780 649 19,700

11 55 6 9,200

A

flb~4

... y

tourist

Apartments 267 2,670 134 19,900

pcticioner

~

LLfl.f-~.-

i

s

-

Total 927 15,505 789 19,700

that o.e

Job

in accommodation creates one in related sectors, but is really too arbitrary. only rurt hermore, manuiy oJfC hose engaged in tourist re-l3ed activities partially reliant on tourists, e.g., taxi drivers, retail shops, etc. A Lurther observatLon 'Ls '.hat often those engaged' in tourist related act4ities are underemployed, e.g. boat rental services, shoe shiners, guides, becaue th.ey have no f raav even ta2d Udrvers whiUo Ihave Vchosen .hea ther options, prefer part-time employment, enjoy doing the same things LHat

tourib

d, UO

e.g.,

fiLsiL.LLJg,

aCI.L.LJ.4r,,

bAu

a r..or.ly

ao

rent their own services too, and/or enjoy a certain amount of leisure and to suggest of T; .a to th - opportunity otniytLU 6L1iat A.JUL be naive LU. tourists. UU LA. L. A. L. wouIA the However, the course that full employment would not be welcomed by most. income effects or tourist expendLitures outs,LUe -he hotel, would seem to be of more significance at present than their direct job creation effects and the data undortunately are not available for that calculation. W

I

--

46 -

-

npak eason In general the t4ve to investment in indiustrv for examnpn¶ age life of a hotel is at least twenty years The average in

rnCt is hbaed on

require some interpretation.

repnlacpments cnsts are likelyv to hp rather

tries.

emnlovment onlyn The results

length of life of the job relais rather long, i-e.e the averand often much more. Furthemore,

iow than in

manitfatutrinng indus-

As stated previously, job creation in tourist accommodation directly geerte icoe

nd

t

-rer.'--

n

elte

sctr,

…as

;.,

an increase

in income where there is underutilization of capacity and new employment where no slackV ex4itsa -

thuntih in

this

Pase

Additional

inveatment

is renquire.

70.* Thbe following table shows the number e-stim*ated to be directly employed in tourist accommodation in 1972, the implicit employee:room ratio at 04`_* A1_@ _ LlaC L LUC

I

-U 4 L

---

I

O1m

*1_

_;4__seaso LUcxm Ut oV

J-

emplyen titp

VtIII

ratios a.aj.

AJO

anA X

%

the nu.be LILJC

L

_C-

WLil

4:_ JVUo

that will be generated by accommodation at present under construction. Employin tourist acco.LLmodation. ar,d exclude, 'or want of a satisfactory basis for conjecture, employment created by tourist estimates ref I er only to Jobs r,enlt expenditures on purclhases,

side the hotel, etc.

transport,

entertain.LLent,

food anI..d bUeverages

out-

- 47 -

Table 15:

Tourism Employment Estimates

Peak to Off-Season Employment Ratios

No. to be employed in Accommodation under Construction in 1977 /2

Latest Year

Nunber employed in existing Accommodation

1970 1971 1972 1973 1973

Dominica Grenada Montserrat St. Kitts/Nevis/ Anguilla 1971 St. Lucia 1973 St. Vincent

1,247 828 162 370 146

1.17 0.72 1.19 0.48 1.33

1.45 1.51

448 12 81 -

144 1,600 207

0-64 1.95 0a98

12 1.79 1.29

30 20 198

TOTAL LDCs

31629 /1

Island Antigua

Barbados Jamaica Trinid2idi

1970 1972

Employee Room Ratio /3

-

-

4,069 9,585

1.83 1.05

2,437

1.50

789

1.59 1.54

250 2,140

and

Tobago est. TOTAL MDCs TOTAL CARICOM

-

16,091 19,720

-

288

-

2,678 3,467

/1

Including a rough 1970/71 average for Antigua.

/2

The estimate was obtained directly for Jamaica but otherwise by applying t-he follouing or.e emuployee per h-otel room. ar.d 0.5 eri.plo-jees ~ f ~ factors: ~ ~ J LI LV.. LJ. IALLL CIU U J ii±yL ~ per j guesthouse and apartment room, to accommodation known to be under construction. These factors m..y be low, but given occuparL.ces inr 19 a *~

l~

*)

'Low

those expected in 1977, pos.sible. /31

Thoe source is

~

I

..

~~

1.~

I

variable costs are likely to be reduced as much as

-benerali the Shar.kland C1ox Study bu-t -.he data are d'f"cult

a 5~I

~4J L

LIt&

JLL

M.LZ.±a

U

%.'O

0.

ULU

L)U

LLZ

Ud~

a

U.LJ

L±.UL

to obtain and in some cases seem inaccurate, e.g. very low for Grenada and very high Lfor St. Lucia, tlhough .h1e la-ter's l ±Ux1ury resort accomu-luoatLor requires a high employee per room ratio.

Net Benefits from Different Types of Accommodation The table showing investment costs of job creation suggests that the Y.owever, these wages with "free" are generally locally owned, employ family members, subsidize 71.

most labor intensive type of accommodation is the guest-house. rentl,

fooA,

ut41i,Jles, etc. anA attract the lowest spending tour i sts.

Further-

more, there is a high proportion of local ownership (often 100%) and, unlike oa a to hi4gher cat-egory acCo-..oain which1 isa att+racted foreign investmlen.t lo .t.J.,_ A t.ta.tC.. wI.t.. L%JC±~IU LLUv~oLLLC higher construccapital does not have a zero opportunity cost. The relatively tion costLs per un-it of labor e-Lrp'loye'd in h,o telIs, should take into account thnat the amount of labor involved in construction and the revenue generated by LJ.*llt

WL

t

U

t

.toAano,,

wages adiu othler experUtures is considerably greatLer than ir, guestLhloteLs 'ini

houses.

Consideration of the costs of and benefits from different types of

_ __ _ ___I SL1 accowniouwat'Lonl

d1UdH . L[IC _ICaribbean,ill 'n__fl ti'le

1 ,__, ±1U__LL

Xu:strates

L,

_ _ __L _ 1 _V recommendI,L0L~ JLI.U[ _LL to pLroblems attachledu t*'le

ing a particular market strategy for the islands, i.e., not only how much accommodation should be created, but more spe;iLfcaliy what type or category of accommodation should be encouraged. The following outline attempts to isolate the pluses and ,minuses,in terns of net benefits, f'rom luxury, middle income, guest-house and self-catering operations. The exercise is only intended to illustrate tne possblDe trad'e offs between different investments and the need for quantification of the subject. A preliminary conclusion from this analysis mignt be that none of the trauitionaal accommodation [orms maximize benefits to Caribbean economies. Incentive and Tax Legislation 72. Incentive legislation for the whole Caribbean is outlined in Appendix V. The lessons to be drawn from an analysis of incentives and from the previous sections, seem to be that too often they have been applied indiscriminately, regardless of: (i) the local or toreign origin of tne capital; (ii) the level of supply and trend of demand; (iii) the size, location or category of the accommodation; (iv) the obvious need for periodic amendments. An unfortunate feature of the incentive legislation that only becomes clear on closer inspection is that government review of the viability of the project at the planning stage and inspection of the facilities during construction and operation is generally, at best, superficial. Consequently, there have been abuses of the regulations. Island governments often argue that they are forced to offer incentives - and better incentives than other islands - because of their own lack of investment capital and the need to induce scarce venture capital. Since, as discussed earlier, hotels are not very profitable operations in their early years and since motivation for hotel investment is complex, some form of incentive may very well be a necessity. However, the direct indirect and opportunity costs of incentives can be very high and generally are not properly calculated by governments. Their indiscriminate application, i.e., even when supply is adequate, is one cause of cyclic oversupply of facilities. Over-capacity causes a profit squeeze, which in turn induces reductions in non-fixed operation costs, which generally affect the quality of service in accommodation, which in turn reveberates on the market potential of the sector as a whole and on the local economy. A thorough accounting of the tax revenues foregone under incentive schemes and of tourism's

-

49 -

contribution or potential contribution to tax revenues has seldom been atfound to be very -eneraliy tempted. HYowever, the costs of incentives are net tax revenues and 1/ Jamaica and Antigua in as high when examined closely time greater than same the at (ii) and potential their below (i) are probably the duties and and purchases on taxes indirect when is generally recognized Nevertheincluded, are hotels boperations current taxes on goods used in in orinvestment hotel the induce to content often less, governments are too their confine to and revenues exchange foreign der to generate employment and on a tax salaries, and wages hotel on taxes tax measures simply to income room sales to tourists, an.u some standard em.barkation taxs.

Differen.tial

pricing of public utilities' services; a differential tax structure related to seasonablity, location, or hotel category,

andu dfferential tax incentives

are fiscal measures rarely employed by CARICOM governments. are of enhanced importance giLver

Such measures

the need for price competitiveness partic-

ularly in the summer season. Governments might contemplate the trade offs between tax revenues frorm, a lower volume of tourists or greater employment from a higher volume of tourists, partly induced by differential or lower taxes which reduce the price of the final product.

1/

See respective reports.

- 50 T1able lO:

Th-E lIMkPACT AF DIFFERENT T)ES OF ACCUUOMDATlON

LUX-URY

FIRST CLASS

Gu;ST HO-uSE

SELF-CATERING

TOURIST EXPENDITURES

High in hotel, low outside beGaurse of enclave facilities.

Absolute level unclear; probably lower than inr luxury but relatively higher outside hotel; group travel leads to discounts on rooms.

Absolute level low, probably little expenditure outside guest house.

Absolute level likely to vary since broad income segment induced. Expenditure outside accommodation can be relatively high since tourist mobil 4ty hil,gh.

OWNERSHIP

Mostly foreign.

Mixed; many locally owned, chain managed.

Mostly local.

Mixed.

PROFIT REMITTANCES

High.

Mixed.

Low.

Mixed.

IMPORT CONTENT Capital Costs

Highest.

High.

Less high.

Variable but probably high.

High.

Probably high.

Lower

Variable.

EMPLJYE'ROOM RATIO

High.

Lower.

Low.

Variable.

EMPWYEE WAGES

High.

Medium.

Low.

Variable.

EMPLOYEE TIPS

High.

Medium.

Low.

Variable.

EXPATRIATE STAFF

At least top management and key staff-

Top and middle management.

Nil.

Probably nil.

SOCIAL IMPACT

Almost nil for locals since iow visibility; reprehensible to radical intellectuals.

High visibility because 'of absolute numbers and groups.

Limited.

Variable, but adverse, where self-catering entails use of facilities used also by locals.

Operating Costs

-

51

-

The Visible Costs and Benefits 73. The visible costs that concern governments are mainly thinflated price of land; higher wage in touiricm that may attract lower paid T1orkers out of menial but essential jobs; investments in tourism-related infrastructure; and the high food import bill and hotel equipme.nt bills that j mke dema.ds on foreign exchange. While the government has been forced to provide infrai structure,

t

some of

cstly, f0r Aaomple a

public utilities, water and gas,

etc., these infrastructure investments have,

of course, benefited the local population anA

essential anyway. demnd '.AU.UOILU

hav *flOV S

...

facilitated XCt..L

In some cases,

L iO

t

l

exeso t. G

t

D

airport4n -nA for-ewerag rmads

V

4.

.-. ar,y

.ases would have been

economies of scale because of heavy tourist of

cera t..

-1A1

tOXiL

j

U

-t

4.'...,

4 .. L 7 U L. *

1_.4

*t

41 es *O

L.

Ao

___eres

LC

L

__n

CO.LUC I

population at a lower cost per unit. The sudden increase in value of an unimproved site for t1he sole reason of its desirability for tourism development, represents a considerable appreciation of national wealth which is seldom exploited

buy

governLUIIents.

Too

Loften

windfalI

gains

have gone

to

private

sector speculators without the government coffers benefiting from the transaction , as cou'ld have been thL'e case w-i th a-pproprLate fiscal po.Licies. _s: _A._ I

-por_

___s _=t _._

hres

_---__s _

74. All food 0 u,pors uy [IU Lel are Uo course paid from tourists' foreign exchange expenditures. Undoubtedly the demonstration effect of foreign foods irThotels and in local supermarkets will have increased iocai consumption of foreign foods. 1/ However, at the same time some local food is consumed in hloteLCs dIIU_.LLLPadsn U LUL ' y tourLsLZS ioreign exchange expenditures couid be considered a windfall export. Traders' margins and/or taxes are paid on all foodstuffs by hotels to local intermediaries and tne government wnether or imported or local origin. Africulture however is the sector where linkages to tourism are notorious for their weakness. Not even Jamaica with its highly developed agricultural base has been able to produce, market and districute a significant quantity of food supplies for hotels on a regular basis. Tne actual production of the right foods in the appropriate quantities at the right time of year forms only half the problem. Agricultural Marketing Corporation (AMCs) have had only limited success in most islands. Their most frequent critics are Lte hotels who complain about iack of quality controls and inadequate packaging, as well as interruptions in deliveries, price irregularity and lack of guaranteed volume. There would also seem to be greater opportunities for gearing local manufacturing to the accommodation sector. Furniture, small fixtures (e.g., door knobs, light fittings), ceramics, rush mats, textiles, etc., could all be locally produced, whether at a lower unit cost than the importea procucE is not certain. At present linkages between tourism and manufacturing are not evident, though they undoubtedly are in the services sectors.

1/

An indirect benefit is that the diet of the local population has improved considerably as a consequence.

75. Non-economic negative aspects of tourism development range from the alienation of local cultures 1/ and the corruption of moral values, 2/ to the feeling of exclusion from participation at only the lowest skill levels and in all but the smallest accommodation units. Until recently all but the most sophisticated locals refrained from using hotel facilities, though this is now changing and Jamaica, for one, is now actively encouraging domestic tourism There is a trend to a greater involveby off-season discounts to Jamaicans. ment in tourism by locals. Again Jamaica has taken initiatives in a visitor welcome program that introduces_tourists to local residents with similar interests and in a Public Education Campaign: "Tourism is My Business and Yours Too", to improve local attitudes to tourism. 3/ An often neglected consideration, however, is that where income distribution is skewed and unemployment is high, outbursts of crime and violence against tourists certainly reflect social problems related to tourism development, but also reflects the local socio-economic context. The sector will probably always remain a controversial one, but the greater the linkages to other sectors, the greater the compatibility between the type of tourism induced and the local culture, and the more equitable the distribution of benefits from tourism, the more acceptable and effective tourism will become as a development tool in the Caribbean. 1/

"Centuries of colonial domination have prevented the emergence of a positive affirmation of the unique potentials of this pluralistic Caribbean society. Different cultural backgrounds are now being welded into an integrated culture which incorporates, but also transcends each of the individual contributing streams. At this crucial stage large scale tourism might prove to be a serious hazard to the process of cultural metamorphosis which the Caribbean countries are going through." "New developments for tourism must exploit the natural attributes of the site, be of the right density, scale and character to refleect tle esence of the overall location. Architecture should ideally echo the culture of the host country ana not degenerate Lnto a depersonalized, inLternational mass produced concept of box like constructions that give no indication of their wnereabouts; that could be anywhere in the world - from 1'4scow, Chicago to Toledo or Cairo." The Caribbean Ecumenical Consultation for T'ne Role of Tourism in Caribbean Development, Study Development (CADEC): Paper No. 8.

2/

Two of the main problems facing one Ministry of Health are the eradication of drug abuse and the elimination of venereal disease. Both problems were attributed partly to tourism and partly to migration, given the heavy traffic between the island and the U.S.. Canada and Europe.

3/

Barbados on the other hand has begun a campaign to exhort tourists not to offend local sensibilities.

- 53 -

One cost of tourism development whirh could- if not controlled; have

76.

serious consequences is the effect of pollution and indiscriminate exploitation of national resournes.

In

some areas the very Xqspts that nresently attrart

tourists are being destroyed rather than preserved or protected. 1/ Physical nlnnnina 4s still

Pmhrvonnr

in

most

i4lnnd8 2/ and when accomnpnied hv striet

zoning regulations and building codes, become the best protection for the isi

nrdts

t

natiiral

nQsets.Q

The

e'irrent

snoinltiionn of n2tulral

resourrces

range

from depletion of lobster beds and of other sea fish, to pollution of the sea and beaches the dIsruptIve effect on production and servic sctrs public utilities and the life-style of local residents, of sudden increases I"nnririvi1n t4^ nv.i Aox a4 f-4 a 'v~f.Alkf-ri..i-4StS and.-. cruise visitors. poultin Plr.C-1 r. f-iff4. traffic densities created by torssan_rie_iios The importance of protection of natural assets in tourist areas is heightened byxi the

4mpr%vtar,.c

attached

f-he onxr4iv-anl-

4in

torits-t4af

generatir.g

.

1/

Ideally, and sometimes in fact. tourism develonment induces a consciousness of the value of certain previously unrecognized assets and therefore assLures their nrotection.

2/

However the Physical Plan for Barbados, although a draft, is attached as Appendix 3 to this report and as a valuable model for other islands.

APPENDIX 1 Page 1 CARIBBEAN REGIONAL STUDY Proposal for Study of Hotels' Operating and Financial Data By:

Part I.

Iain Christie

Terms of Reference

Objective of the Study 1. The objective of the study is to provide operating and financial data for lodging establishments which represent a cross section of the tourism industry for use in evaluating.tourism and its potential. 2. The study would be in the form of tabulated statistical information on hotel operations supported by explanatory notes. Depth of the study 3.

Summary statistical information will be provided: (a) in a comnarative form for a three-vear oeriod (1970/71/72); (b) for hotels in different categories following a suitable hotel classification svytem;

(-) fnr hntels

in

different tntirinm rpoinns,

and

ex4st4ng

potential; (d) for hotels of different sizes; and (e)

for resort operations only.

Presentation 4.

Data is to be presented in the format of the Uniform System of

Acp,.,,ntsfs or Hotes where possiblea

The informatior. should be -resented

as aggregate amounts, as averages, as ratios or on a per room ok other suitbab ebasis but i4.n r.o c,aswll resaIs f1r 4inA4vrdua h1tels be di u1 -A Materialt

to^ be covered, Tn

an.1 --

f-la

a

f..A

..4

11

ann,..,

4a

.-

A

4

en-4

^1

"ri-terlfsA4

tics of the lodging industry, including operating statistics, detailed income statements and balance sheets with supporti,ng explanration as necessary. Specifically, the study should include, inter alia, for each classification of

hotel:

APPENDIX 1 Page 2 O9 erating_Statistics Number of rooms Age of hotel Period during which hotel Is open Number of rooms available Number of rooms occupied Number of guests Percentage of occupancy Percentage of double occupancy Average length of stay Seasonal occupancy pattern Number of emnlovees Rooms Food and beverage Other

Tot-al

ntim.br of

AverageD Marke,ting r

e.g.

1 1.

l

amnlnvppq

nper ronm

4te

IrdvIdual groups

T10oue presentedu

iLn the Liong

lorrL,for.-at.

2. Fatorssuchas agerncy corlW,nission structure, ser-vice Factors

suCI

dOJ-c

~LII0IL

L

L.LU

0

JLV

leases, management contracts, corporate orLULasi,g teLL items influencing over'heau and ot'-er operation should be explained. charges,

3.

Particular attention to be paid to data below the gross operating profit level.

APPENDIX 1 Page 3 Balance sheets

Part II;

1.

The concern here is for "typical" operations; therefore detail which is peculiar to a single operation can be eliminated.

2.

Of particular interest are details, if possible, on current assets and current liabilities, fixed assets, deferred charges and long-term debt and equity relationships.

3.

If possible, state the terms of any long-term debt.

Questionnaire

Existing Hotels (1) Copies of financial statements (income statements and balance sheets) for selected hotels if possible on the format of exhibits 1 and 2 attached. These should be: (a) comparative statements for three years (1970/71/72); (b

(b) for hotels of different categories; (c) for hotels representative of the different regions; (d) for different types of lodging facility (e.g. resort, clty hotel, paradonr); and (e)

for ht-ala

of A4fferent sizes

under the headings:

(for

example4

n

groups

under 100 rooms, 101-200 rooms,

201-'n0 rnnma nur inn yonTna)-

(2)

Sele^ted statlstlcs on these hots basd or. questior.s o

Page 5 and 8. New Hotel Projects (Page 12) (1) Details-of hotels which opened in 1972/73.or-wi-ll open in 1.973. (2)

Information on planned or proposed new hotels over the next five years. Qu.eLsti Lor.s or.

Ge.eral I

1\ 1/

*lese L1C_C

L

Hottls

qu..esti_n__ I4Ua5L.LULL

3&D

are a&C

J included 1 .LI.UU,UUCUL

u

ag Fa;

[A 7.

APPENDIX 1 Page 4

Selected Statistics Hotel name

Location

Number of rooms Classification (1)

Average room occupancy

1972

1971

January

%

v

February

%

%

March

%%

__

April May

%

June

Z

%

July

Z

%

August

%

%

September

%

%

October

%

_

November

_

%

December

_

X

Indicate the months during which the hotel is closed (if

any) 1972

Niml..br nf vrnnTms

1971

vaulahe

Number of room-s occupied N-m.-ber of guests_

Percentage o-Uf

ocupnc -obe

Average length of stay

v V

days

days

APPENDIX 1 _S (2)

1971

1972

Average Rates

Average room rate per

Average (3) L

room.. rate per guest

Nu,-,.er orfT. E,uployees

Y.ighSeason

Lo

Seasor.

Foou and beverage Administrative anu general Heat, light and power Repairs and maintenance Other Total employees

Average number of employees per room

(4)

1972

Ratios

1971

Rooms department Rooms payroll as % of room sales

%

_

All other expenses as % of room sales

__%

Food and beverage (F&B) department Food sales as % of room sales

_ %

Food sales as % of F&B sales

_

Food cost as % of food-sales

_ %

Beverage cost as % of beverage sales

_ %

F&B Payroll as % of F&B sales

_ %

All other expenses as % of F&B sales

_ %

Music and entertainment as % of F&B sales

__

Z

APPENDIX 1 Page 6

(4)

Ratios

1972

1971

Ratios to total sales Administrative and general Payroll

%

Other

% Total

%

Beat, light and power

%

_% 7X

_

Gross operating profit Payroll (total for hotel)

_

_ X

Advertising and promotion

Repairs and maintenance

%

%

%

_

Rent (if appropriate)

X %

%

Depreciation

_

Interest

_

X

%

Other capital expenses

Z

Profit before income taxes

%

_ _

X

APPENDIX 1 Page 7

Hotel name

_

Location

___

As appropriate, please answer the following questions about each hotel for which you are providing comparative income statements and balance sheets. 1.

Service charges (a) Are service charges added to guests' bills? Yes/No. (b) If they are, how are they handled in the hotel's accounting?

2.

Commissions (a) What is the typical commission charged by: %

Tour operator Travel

%

agent

(b) Is the commission usually a percentage of: Room sales only Room and food sales Total sales to a customer

( ( (

) ) )

(c) Percentage of total commissions to room sales: 1972 1971

3.

% X

Administrative and general expense (a) Does the hotel operate under a management contract? (b) If it does, (i) (ii)

(iii)

How is the annual management fee calculated? years.

How long is the contract for? Any option to renew? Yes/No. Explain. Explain any special clauses.

(c) Do the figures in the income statement include any amount covering central office or corporate overhead applied to the hotel? Yes/No If

yes,

how much in 1972

?

1971

?

Yes/No

APPENDIX 1 Page 8 4.

Leases (a) Is the ground on which the hotel is built Owned Leased

? ?

If leased, what are the terms of the ground rent? (b) Is the hotel operated under a lease agreement: (i) (ii)

Yes/No

If yes, how is the annual hotel lease payment calculated: For how long is

the initial lease period? Yes/Nn

years

Anv nntinn tn rpnpw?

Explain. (iii) 5.

Explain-any special clauses of the lease agreement.

Replacements and renewals, repairs and maintenance (a)

What is the hotel's policy regarding replacement of furniture fIx*ures,

d

-Ui---.-

item.s such a8 ci.a,nn

nglas

nnAr li.er.?l

P.ow would such reeplaceamen.ts be fir.anced?

(b) (cl '

lat

is the hotel

de-scribU

LLease

eAc

8

rep'ais

shLoUL L,

and ma1nte.nace policy?

meui-UAU

CJ.U

l.L%-v.=LLU1

l.Cu

6LL=

Ltheo.tl

has including: (a)

The source of the loan

(b)

The type of loan (note payable, 1st mortgage,

(c)

The term of the loan including: (i)

Grace period

(ii)

Interest rate

(iii)

Length of loan

(iv) (v)

Method of payment Special conditions

debenture, etc.)

APPENDIX 1 Page 9

General Questions on Hotels 1.

Over how many years can the following assets be depreciated? Years (a) Buildings (b) Heavy equipment (elevators, etc.) (c) Light equipment (furniture, etc.) (d) Linen, china, glassware, silver (e) Other (

)

Ut tLa aLslable for (e.g. ssales, corporate income, real estate taxes)? Please list the taxes and summarize the provisions applying to each. 2.

3.*

Please list the financial institutions involved in financing hotels and indicate the nature of their investment (e.g. equity, loan canital and terms.

APPENDIX_ Page 10 4.

What are hotel project investments costs currently: (a) Please use "per room" amounts and include (or indicate otherwise) land, construction, heavy equipment, furniture and fixtures, linen, china and glassware, professional fees, pre-opening expenses and working capital and any other costs considered part of "project cost". Give average figures for different categories of hotel.

(b)

What are typical construction costs per square foot (or square meter) for hotels in different categories?

5.

Are special licenses or permits needed to operate a hotel? If so, Please list them indicating the agency granting permission, and the cost of each license or permit.

6.

Please list annual average cash salaries for selected positions (by region, if rates are different). (a)

Chambermaid

(b)

Station waiter

(c)

Desk clerk

APPENDIX 1 Page 11

(d)

Cook

(e) Other:

7.

What additional benefits represent a part of payroll cost (social security, meals and accommodation, paid vacation, insurance, pension plans, etc.)? Please indicate each category and explain the main points.

R8

Please e-xnlain the classification system for hotels and other

lodging establishments.

APPENDIX 1 Page 12 Summary of New Hotel Project Costs 1.

Please give hotel project costs for hotels opened in 1972/73, or opening in 1973. Please give examples by category of hotel on the following detailed basis if possible. (a) Land

(b) Building and civil works (c) Heavy equipment (elevators, air conditioning, etc.) (d) Furniture and fixtures (e) Hotel ware (linen, china. glassware and silver) (f) Professional fees (a) Interest during constructinn

(h) Pre-opening expenses (i) Workeirgcapital

(j) Contingencies Trotal LI

2.

L..L

For hotels completed in 1972, were there any cost overruns? please explain.

If so,

APPENDIX 1 Page 13 3. Fr each hotel1 includried uinder (1) abnove . - - __

(a)

_

-

__

I

~~I

lplease

I-.- ,7

show the financial plan detailing the compositior and long-term debt.

of eqity-

(b) state how the hotel will be operated (under a lease management contract,

for examplUe)

giv'ng the t-,,s of any

d5L eerIL

,

i'

possible.

4.

Please list hotels planned or proposed over the next five years showing where possible: (a) Name of hotel (b) Location (c) Number of rooms (d)

Classification

(e) Total investment (f) Associated hotel company (g) 5.

Date of opening

Which companies (domestic and international) are actively expanding in the hotel field?

APPENDIX 1

Summwary of New Htotel Pr.y.J2A CostS 1.

Pleaase give hotel project costs for hotels opened in 1972/3, or opening

in 1973. Please give exa,ples by category of hotel on the following detailed basis if possible. a)

Land

b)

Building and civil works

c)

Heavy equipment (elevators, air conditioning, etc.)

dl

Furniture and fixtures

*)

Hotel ware (linen, china, glassware and silver)

1')

tOfAARAinn1l

fsAA

g)

Interest during construction

i)

Working capital

Total

2.

For hotels completed in 1972, were there any cost overruns? please explain.

If so,

APPENDIX 1

Page 15

3u*

U., w .olU .c& .jwU.Wo lV d)as

F * far

e

and long-term debt.

D)

4i.

State now the hotel will be operated (under a lease, management contract, for example) giving the terms of arw agre.nt, if possible.

Fiseas list hotels planned or proposed over the next five years showing where possible: a)

Nam of hotel

b)

Location

c)

Number of roons

d)

Cle"iticativii

R)

f)

in th

otal invemtnuint

Associated hotel cowpany

chot

of

. .....a ar onield'., ...act ear.L

ins the hotel field:'

r;tie

vJJ

4

APPENDIX 2 Page 1

AN APPLICATION OF LINEAR PROGRAMMING TO THE ANALYSIS OF THE BARBADOS' TOURISM SECTOR

Introduction 1. One of the most important and visible benefits of tourism is its ability to generate foreign exchange earnings. 1/ In small and resource-poor economies, such as the Caribbean islands, where tourism and tourism-related enterprises often constitute the single most important "industry", reliance upon the tourism sector as the source of the country's foreign exchange earnings becomes particularly crucial. Under these circumstances, it is of legitimate interest for the government to plan for development within the tourism sector with the objective of maximizing net foreign exchange revenues that can be generated by this sector. With this obiective in mind, this paper proposes a simlple linear prografmMing model for determining the maximum net foreign exchange revenues that are attainable from given sunplies of various tourist accommodations and the "behavioral" characteristics of the tourists. The resulting ontimum tourist comDosition and maximum foreign exchange earnings level may then be analyzed to answer questions concerning the adeqatirv of the suppnlies of the given tourist acrommodations and the attainability of the objective level of foreign exchange earnings.

1/

Note:

The importance of foreign exchange earnings has been emphasized in recent studies, particularly in the "two-gap" models of economic development. See, e.g., A. Maizels, Export and Economic Growth of Developing Countries (Cambridge Univ. Press, 1968); R.I. McKinnon, "Foreign Exchange Constraints in Economic Development and Efficient Aid Allocation, "Economic Journal (June, 1964); J. Vanek, Estimating Foreign Resource Needs for Economic Development (McGraw Hill Book Co., 1967). This Appendix has been prepared by Mr. Vincent Lin who used a preliminary program prepared by Mr. Abderraouf Benbrahim.

APPENDIX 2 Page 2

A LINEAR PROGRAMMING MODEL

1l1e

ObjectLve

runctionL

I,e obDj'ect'-ve 'is to riIax'±mi.ze rLet LforeiLgn exchLaige earnings in the tourism sector. In view that domestic tourism is negligible in Barbados for which this exercise is conducted, it is assumed that all tourists utilize external resources (foreign exchange) to pay for their expenditures during tneir stay in Barbados. Since tourist expendirures constitute purcnases ror domestic as wgell as imported goods and services, these foreign exchange leakages are subtracted from tourist expenditures to obtain net foreign exchange earnings. The objective function is then expressed as:

2.

Maximize: Where:

sunprqeript i

FXnet

2

countrv of

(TAi)

i

tourist

origin

(i=l.;m?

subscript j

= type of tourist accommodation (jl,n) F_net = npt fnrpign exrhAnge pn-rninog in TJ.S-A

TA tourist arrivals L = average length of atai in .n.rn,her of niights E = average daily expenditure per tourist

M = fnoeg4 an ecrhnange lenanage rato nr Imnort-rcontent of tourist expenditures (0EM -1) The Constraints 3.

The major constraints on the amount of foreign exchange earnings generated by thke t,ourism. sector are those ir.posed" by the msup14ies of the various tourist accommodations via their restrictions on the number of V4 vltors. TPh ese con.straints are expressed as: thA,at- can be

fr

where:

A

't

/I%A

D

N

fDA

'

fT%-..-..

Pj = bed occupancy rate "Li = number of bu-eds available

ilote LLhCaL Pj iS a poUL.Lcy paaLCUmLte, for purposes of analysis.

,

L.t.

4.9-

(OP-51)

,±L

1lLy

(for each J)

Lasigr.ed ie

dUfLLerer,t

values

4. Additional constraints on foreign exchange earnings are those imposed by the pattern of tourism dermand. LTlese corisLst of "m-,arket-share" constraints, which limit the proportion of all tourist arrivals by nationality, and "utilization" constraints, which limit tne proportion of tourLst eDeUigLYhts by nationality at each of the various tourist accommodations.

APPENDIX 2

Page 3 nulese constraints may be expressed as: C

(

(TA ).(L

where:

(S A

(for each i)

k-jC4lA

(U

(TA ).(L

(for each i,j)

S = minimum acceptabje proportion of tourist arrivals (0O-'S71 S 1)

U = minimum acceptable proportion of bednight utilization (Oz Ui 1) i j Note that S and U may be determined either from historical patterns of tourist behavior or may be assigned values for purposes of analysis. Note also that these constraints implicitly limit the maximum proportions of tourist arrivals and bednight utilization.

APPENDIX 2 Page 4

APPLICATION OF THE MODEL TO BARBADOS

Information Requirements 5. The model requires as inputs information on the supply of accommodations, the pattern of tourist expenditures and their import-content, and the composition and length of stay of tourists by type of accommodation and by nationality. 6. In applying the model to Barbados, tourists are divided into three nationality groups: U.S.A., Canada, and Rest of the World. 7. Information on the average length of stay of tourists by season is available from the Statistical Service's Beadniht Survev. 1/ Sinep Information on the average length of stay by the various nationalities is not available, it is qsct--med for our analysis that the average length of stav of all tourists at each of the different types of accommodations is the same, i.e., Li(IT-S-A.) = Li(Canada' = .i(R_1)WA5 Fuirthprmtnrp- it- i- naqtmed thnt thp average length of stay in 1972 remain unchanged for the time period under consideration The average length of stay in 1Q72 iS: Sun

Winter

L-,u- H.otels .aLtA-class Htelsa

6n ni ghts 6 night

s8-n ighIs 7 nig

Guest Houses Cottage/Ap art,ments ~

6 nights

6 nights

A-class Hotels

1.

8.

ver

In.forumTato4^"n

C%jS

6 nights

7Ini;ht.s r.ighs I. ~ '7 I ,IL.

L LIU_L&

tour 4 st

arrivals

7 nights

1

by

-4--

AL.k~

14.aity

ILU

tourist

bednights

at each of the accommodations are available from Tourist Board data and Bednight survey. ~To deter-n.ir.e the mini..tu acetal -rprin -touris;----of _ . ~ LLL~ IC.LLI.LIItUUL ICPL.LdU±t: PLI.JJ1L L.±LJLA3 U]. LUULJ.ZL. arrivals and bednight utilization, historical patterns were examined. The L'V~J

proportio..s assumeAu

1/

for

4his

exercise are giver. below.

Summer Season is April-November; Winter Season is Dec.-March.

APPENDIX 2 Page 5

Summer

Winter

Market Share of ToULrsL

ArLivals

( i):

U.S.A.

30%

30%

'-tdLAU4 Uu

R.O.W. Bednight Utili(uij) zation ' i zation )

JU/.

20%

35%

~~~~~~Summuer W.int~er ______

__W ____t

Luxury Hotel

U.S.A. Canada R.O.W.

50% 15% 15%

50% 20% 10%

A-class Hotel

U.S.A. Canada R.O.W.

30% 30%

25%

30% 40% 10%

B-class Hotel

U.S.A. Canada R.O.W.

15% 25% 25%

20% 50% 10%

Guest House

U.S.A. Canada R.O.W.

15% 20% 50%

10% 35% 20%

Cottage/Apt.

U.S.A. Canada R.O.W.

10% 50% 20%

10% 65% 5%

9. Unfortunately, data on tourist expenditures and their import-content were not available. For purposes of our analysis, however, rough estimates of tourist expenditures and leakages were made. It is assumed that expenditure patterns and leakages of all tourists at each of the accommodations are the same, i.e., Ej(U.S.A.) = Ej(Canada) = Ej(R.O.W.) and Mj(U.S.A.) = Mj(Canada) = Mj(R.O.W.). The estimates assumed for this exercise are given. Oumj-,uer

Exp'enditures

(Ej): T

L.uxury

LHLote'L

LS Ar

Y$t4

Winter

~

:

Y$J5

A-class

$35

D) D c',ass:

(

(9

Guest House

$20

$25

Clottage/ Apt.

$35_

$40

Leakage Rates (Mj): Luxury Hotel A-blass B-class

_1_ e£J

Summer 35% 35% 25%

$45 V JVCn1

Winter 35% 35% 25%

APPENDIX 2 Page 6

Guest House Cnttagp/Ant.

25% 30%

25% 30%

10. For our annalyis of the Rbrhados' tourism sprtnr, wp annlied the model to two supply conditions and three criterion bed occupancy rates. The two suppl1y conditions -re tf1he currcnt (19Q73) ciian l;ac nf tnrict nermnorlnt;4nn and the supplies of tourist accommodations when those projects currently These are: under construction are completed ("net" supply). '. New

Current BedAs Ava4ilable:

(BAj): L.uxury

LLHotel

2,09e4

beds

A-class

1,491 beds

B-cl.ass

579 be's

Guest House

2

320 beds

Cottage/Apt.

J,.,9

beds

1,591 beds 679 e's 320 beds J,6U2 Deu's

Ueds

For each of these supply conaitions, the model was applied to various criterion occupancy rates, namely, maximum occupancy rates (MAX), optimum occupancy rates (OPT), and minimum occupancy rates (MIN). 2/ Occupancy Rates (Pj): Luxury Hotel A-class B-class Guest House Cottage/Apt.

1/

(MAX\) 80% 80% 80% 70% 80%

Summer (OPT) (MIN) 70% 45% 70% 40% 70% 35% 50% 30% 70% 30%

(MAX) 90% 90% 90% 80% 80%

Winter (OPT) (MIN) 80% 45% 80% 40% 80% 35% 60%o 30%o 80% 30%

Shankland/Cox reported that under construction during 1973 were: 100 rooms (200 heds - hotels 150 units (600 beds) - apartments Since the hotel beds under construction were not identified by class, it is assumed for our analysis that 50 rooms (100 beds) are for A-class hotels and similarly for B-class hotels.

2/

vn enavoccupanc were se t----eo reflect the situatior.n i4 wh_ch the tourist accommodations cannot accept more visitors without causing

Mnvim,on grreat

nvennces

to nlreAd,

registered guests.

AtC

-m.n, ocpncy

rates were selected to reflect the situation in which there is no deteup to *moda4iorioration ir t-he quality of servicee at the tourist a-.co this point. Minimum occupancy rates were selected to reflect the situationr in which the tourist accomrmiodation.s may be Just able to stay in operation even though losses are being incurred.

APPENDIX 2 Page 7 11. The model, asappliedtoour analysis of Barbados' tourist sector, thus consists of the objective function and twenty-three constraints (5 supply constraints, 3 "mrkt-hae cosrans ar.d 15"utilizaton"f constraint) a.... a&flt The number of variable is 15, namely, the number of tourist arrivals by d type of ac_o,mmoati4on. nationality --. I

LULS -

-

Results ol .the

-.

-

ml-aedL

L

-tZ.

and

I '.5.

A-lysis

-a

o4

,,

S

LSca

LjL

.J

L.A.lX.LLL.j

the nesults

Le solutior6~ from the ,uo'el unLUer

12..

A.

the varLous supply conditLons

are given in Tables A-1 through A-12. These results are summarized in Table 1 for those using 1973 supply cUnstralnLs, ana in TaDle 2 for tnose using new supply constraints. The time period under consideration, and for which the analysis is made, is for 1972-1977, with 1977 as the target year for the attainment of the objective. 4__

-t

_

4

n

ol

_

__

__

__

S

_-

_

I_

_fi m,

I

r-

.-

- -

- -

11

11

13. First, the results of the model with constraints imposed by current available supplies of tourist accommodations. Using "maximum" occupancy rates, the maximum net foreign exchange earnings attainable is $57.1 million ($84.2 million for gross foreign exchange earnings). Implicit to the attainment of this objective is the requirement for a total of 338,287 tourist arrivals. Compared with 210,349 tourist arrivals in 1972, this calls for a 10% per annum compound growth rate of tourist arrivals during the period 1972-1977. Tne results using "optimum"l occupancy rates show net foreign exchange earnings of $50.9 million ($75.2 million for gross foreign exchange earnings). Total tourist arrivals in this case is 299,993, requiring a 7.4% growth rate per annum during this period. The results under "minimum" occupancy rates show negative growth for the period. 14. When the model is constrained by "new" supply levels (current supplies plus those under construction), the results using "maximum" occupancy rates show an attainable net foreign exchange earnings of $62.9 million ($92.7 million for gross foreign exchange earnings). Total tourist arrivals in this case is 373,192, which means a compound growth rate of 12.2% per annum during the period 1972-1977. Under "optimum" occupancy rates, attainable net foreign exchange earnings are $56.2 million ($82.9 million for gross foreign exchange earnings). The number of visitors needed is 331,639, which means a 9.5% annual compound growth rate for the period. The results under "minimum" occupancy rates again show negative growth for the period. When these "implicit" growth rates of total tourist arrivals are compared with the growth rate that Barbados has experienced in the past (during 1968-1972), the annual compound growth rate of visitor arrivals was 16.1%), the indication is that the objective is reasonably attainable, particularly under "optimum" occupancy conditions. 15. To obtain a better picture of the attainability of the objective and to determine the adequacy of the various supplies of tourist accommodations, it is necessary to analyze the disaggregated results of the model. Since "optimum" occupancy rates were chosen to reflect the situation in which

APPENDIX 2 Page 8

there is no deterioration in the quality of service at the tourist accommodations up to this point, our analysis using disaggregated results of model will be conducted for those obtained under "optimum" occupancy conditions. 16. The "implicit" growth rates of tourist arrivals by nationality and by type of accommodation are calculated for the period 1972-1977 from the results of the model under "optimum" occupancy conditions: 19681972

Year

(1973 Supply) Summer Winter

Year

("New" Supply) Summer Winter

U.S.A.

15.1%

6.1%

9.1%

1.3%

7.5%

10.5%

2.5%

Canada

22.1%

12.7%

15.8%

9.2%

15.7%

18.9%

12.2%

R.O.W.

13.0%

3.4%

4.9%

neg.

5.5%

TOTAL

16.1%

7.4%

9.3%

4.1%

9.5%

11.4%

6.3%

Luxury Hotels

6.3%

8.4%

2.2%

6.3%

8.4%

2.2%

A-clans Hotals

8.1X

10.9%

3.5%

9.5%

12.3%3

B-r1

aqq Hotels

15.4%

18.5

11Z 12%

19.3%

22.0%

14. 8

r(t,-st Houses

16 2Y

15.9%

16.4%

16.2%

15 9X

16-4%

1,9%,

977:

12.4°Z

Cottage/-A-pts.

0 P7&4

5.8%-

7.0%

1.2%

4.7%

5.7%

17. The "implicit" growth rates of tourist arrivals at the various types of accommodations is of particular interest, since, in general, a very low.,a "impic4,.4t"~grow'th rate ls indicative of ir.adeute c 'apc4ty, ..hile a very high "implicit" growth rate is indicative of excess capacity. An examinati Inatlonof nr of thek-q 114mn1 4 4 1 tn.s" -rFOt-na .s t-ln+ nv.-mac r::nonnz t-xy oor4c:t< thes"Impl-I----growth rates shos _ha excess capracity. exis ts in B-class Hotels and in Guest Houses. Under current supply conditions, the "implicit" growth rate OD a yearly basis is 15.4%; with the increase of 100 beds assumed to be under construction, the "implicit" growth rate increases to 10.3v. 18. Th,e construction of Inn beds as. u-eA for A-class hotels and 600 bedfor apartments, on the other hand, will alleviate some of the need for these facilitices Ae wite -n seaso view , of znd ~ .... a ,, part icularly 5.7 duin ~4 Caada ~~kI-A1 jcIA.

.LL~U.LGL

C

Ltr,

&LL

W.LILL.

3

M=L

&

.LLL

V ..

.W

LA

OLl

C~&&

American preference for A-class accommodations and Canadian preference for cottages andu apartrlIents. IL e .Low "i.,Pl±C.p L rLUWtLL LrLat Lo Ltour s Ct

APPErNDIX

2

Page 9

luxury hotels during the winter season indicates that inadequate supply exists. An increase in the supply of luxury hotels will thus make it possible for more tourists to visit Barbados during the winter season, particularly American tourists who have a high preference for luxury accommodations. 19. It must be pointed out, however, that by increasing the supplies of accommodations which alleviate the constraints on growth during the winter season, the possibility arises in which excess capacity may be created in these accommodations during the summer season. This situation is very much in evidence by the higher "implicit" growth rates at these facilities during the summer season. 20. An examination of the "implicit" growth rates of tourist arrivals by nationality show that they are generally substantially lower than past growth rates, and these rates are reasonably maintainable during the 1972-1977 period. The high "implicit" growth rate for Canadian visitors, however, raises the question as to whether such a rate can be maintained during this period, even though in the past Canadian visitors had been entering Barbados at a very high rate. 21. The pattern of much higher "implicit" growth rates for the summer season as compared to those of the winter season is indicative of the fact that low occupancy rates currently exist at these accommodations during the summer season. This suggests that greater efforts should be made to attract more tourists during the summer season. 22. In conclusion, the results of this exercise suggest that, although for all tourist accommodations as a whole excessive capacity is not a problem. for B-class hotels and guest houses, excess capacity already exists. Thus the 100 beds under construction assumed to be for B-class hotels only adds to the already excess capacity. The results also suggest that some constraints to tourist growth exist under current capacitvy the constraints being Dresent during the winter season at luxury and A-class hotels and cottages/apartments. The increase in canacitv resulting from the comnletion of 100 beds at A-class hotels and 600 beds for apartments currently under construction will thus induce greater toirist gronwth during the winter seaon.

Since some

onnstraint

to tourist during the winter season. Since some constraint to tourist growth during the winter season is presented by current capacity at luxury hotels, there is some-merit to increasing the supply of beds at luxury hotels. For All cases, however, greater effort should be made to attract tourists during the summer season.

APPENDIX 2 Page 10 LUX

=

bednights at luxury hotels

ACL

=

bednights at A-class hotels

BCL

=

bednights at B-class hotels

GH

=

bednights at guest houses

COT

=

bednights at cottages and apartments

MSA

=

American Tourists/Total tourist arrivals

MSC

=

Canadian tourists/Total tourist arrivals

MSO

=

Other tourists/Total tourist arrivals

MSALUX, MSAACL.., MSACOT = proportion of bednights at tourist accommodations by American tourists MSCLUX, MSCACL,..., MSCCOT = proportion of bednights at tourist accommodations by Other tourists ALUX =

number of Americans at luxury hotels

AACL =

number of Americans at A-class hotels

ABCL =

number of Americans at B-class hotels

AGH

number of Americans at guest houses

=

ACOT =

number of Americans at cottages/apartments

CLUX =

number of Canadians at luxury hotels

CACL =

number of Canadians at A-class hotels

CBCL =

number of Canadians at B-class hotels

CGH

number of Canadians at guest houses

=

CCOT -

number of Canadians at cottages/apartments

OLUX =

number of Other visitors at luxury hotels

OACI. =

number of Other visitors at A-class hotels

OBCI. =

number of other visitors at B-class hotels

oM

=

OCOT =

num..ber of nther visi tors at guest houses

nuv.ber of Other visitors at cottages!apartments

APPENDIX 3 Page 1

BARBADOS:

DRAFT PHYSICAL DEVELOPMENT PLAN, TOURIST SECTOR

Prepared by the Town and Countrv Planning Office

The Review of the Physical Development Plan requires an estimate of 1. the land needs for hotel and apartment development as a prelude to distributing this forecast growth in a way which is consistent with the overall planning strategy and its objectives. In the absence of a Tourist Development Plan it has been necessary when forecasting growth to assume that the present situation as regards the promotion of tourism will continue. If however, a Tourist Development Plan were to be subsequently prepared the proposals of the Physical Development Plan could then be modified or refined to accommodate the proposals of this Tourist Plan. Projection of Arrivals In 1992 To date three Droiections have been made of the future level of 2. tourist arrivals in Barbados. These are: (1)

In the Physical Development Plan made to 1985.

(2)

By H. Zinder & Associates - Report on Tourism in the Eastern Caribbean mn-de to 1977.

(3)

By Howard, Needles, Tammien & Bergendoff International, Tnc., as part of the Seawell Airport Study covering the period to 1990.

The aim of the Plan Review is to look ahead to 1992; therefore, the

3.

projections made for the Physical Plan and the Airport Study have been carried forward to 1992 (in the case of the Zinder Projection it was not considered sound to do this in view of the period of time between their projection and thLe end of the Plan Review period i.e.,

1977-1992)

The pro,ected 192 tourist

arrivals are 1.5 million and 900,000 in the Airport Study and Physical Plan projections respect'LveLy. To

4.

look at thle three projectiLors

and

COLmparing

LhemLU

WithLL

t

actual arrivals in the period since each projection was made (1)

The Physical Plan projection - This has a base year of

1965 and appears to under-estirmate the num-iber of arrivals This is not to say of course that in the period to 1970. luture arruivaLs mnay rLot confLor[-Ii

r.ore

cLielose

LU

LLI

evels

predicted in this forecast. (2)

The Zinder projection on the other hand tends to overestimate the actual number of arrivals in tne period to 1970.

APPENDIX 3 Page 2

(3) In the Seawell Airport Study HNTB accepts with qualifications the methodology used/the Zinder Report. Since the projection runs from 1970-1990 it therefore cannot be compared with actual performance. All in all the 1WTB projection seems reasonably soundly based (Airport Study pp. 79-85) and it is suggested that this could be used as a starting point. Maximum Tourist Demand in 1992 5. Having therefore settled on a likely annual arrival figure of 1.5 million tourists in 1992 the next step is to estimate the maximum number of tourists on the island at any one time. These can be derived from the following formula. 1/ Number of rooms Thi Srequi-e (4

(4

6.

number of visitors X average length of stay number per room (i.e4 365 xoccupacy rat spirso

ave 4nrae

t

ent4

ofatay per tourist

he occupancy rate

i)

The~ .lengthLI1 oL stay of. tourist6L~

LI -. the L~ period U 1963=70 is~IzAk-

in Table 2. It can be seen that the largest number of visitors stayed for a periLou o

I

LU

'

wee'S.

I L WaH

et::1ILCU

-L1

LLIC

£.LUUeL

UpurL

LHUL

LLLC

estimated average length of stay in 1967 in the Island was 9 days. They predict a declining average length of stay in 1972 and 1977 of 7 days and 5 days respectively (see table). The assumption for 1977 is that the typical tour'st W-ulU visit 3 to 4 isla,,ds spenUdLi,g 14 UYa s tLLn LhreU. fL Barbados can offer sufficient attractions compared with the other islands in the region it seems reasonable to assume that the average lengtn of sLay will not decline beyond 5 days in the period to 1992. 7. In Table No. 8 p. 98 the Zinder Report shows that occupancy rate in Barbados was 50-55% in 1968 ait'nougn tney occupancy rate for 1972. In the period to 1980 the A4rport also assumes an occupancy rate of 70% in its calculation of needed.

the average project a 7 0iZ Study (p. 82) additional beds

8. Assuming an average length of stay of 5 days and an occupancy rate of 70% the formula would work out at follows: Number of rooms

1,500,000 x 5 2 Y 365 X 70 100

1/.

Airport Study, p. 82.

14,680 rooms

1,8

APPENDIX 3 Page 3

9. However, this ignores the fact that tourist arrivals are not spread evenly over the year but that peak months exist. A study of arrivals over the period 1967-71 (See Table 3) shows the peak months to be variouslv December (2 years), February, March, and August. The percentage of total arrivals ranges from 14% in December 1968 to 11% in December 1967, March 1970 and February 1971. Future patterns of tourism arc unlikely to drastically rhange this nattern since undoubtedly one of the maior reasons for the peaking in the winter months is the climate at this time of the year in North Amprirt-

the m24in sourrp of tourists at nresent.

ClTinatic conditions ar

similar in Western Europe so if in future a greater proportion of tourists nre dpripad from thprp the npnk months are likelv avain to be at this time of

year.

It seems reasonable to assume therefore that in 1992 the peak month

may yield about 12?L of the totaj tourists for that vyer= 1A

om.mowthnt

Thevrfore- m0dif"tring tho fnrm,ilV

occupancy rate of 90% for the peak month Number of rooms

-…

,

wn -

ntim-i r

-

ticr

-t

-

12 Number of visitors annually X100 X average length of stay N~,mbe.r

Number of roo-s N.umber __2

u,nd :si,min,c

…...--~~~~~~~~~~~~~~ . -~~~~~~~~

per

room

1,500,000 X1

12

100

(l

e

5 'An 5

2)

X

occupancyr~

rateD

16,650 rooms

inn

It would b-e necessary therefore to proid

16650 rooms in 1992 to cat,er for

the forecast arrivals. Types of Accommodation Needed in 1992 11. The growth in the upper income tourist market (particularly from North America) is likely to show a levellin,g off in.the rate o' iLcrease in the next 20 years. The increase in future is likely to be the charter, inclusive tourist probably in the middle income bracket from North America but increasingly from Western Europe if charter fares become more competitive. This is bound to have implications for the type of accommodation to be provided. There will be less need for the Hilton/Holiday Inn type of hotel and more for the self-catering apartment complex (with restaurant facilities). 12. From 1965-1969 the number of beds by type of accommodation was broken down into luxury, A and B Class hotels, guest houses and other types of accommodation. For the succeeding years however, information is not available on this basis due to proposed change in the systems of classification which has not yet been finalized. For 1970 and 1971 a provisionai estimate of total rooms by all accommodation only is available. Data for 1972 has been obtained from the Government Tourism Ministry, Barbados Tourist Board and Telephone Survey of establishments. The 1972 figures aggregate all hotel accommodation due to classification difficulties with separate figures for guest houses and apartments, cottages, etc.

APPENDIX 3 Page 4 13. Looking at the period from 1965-1969 the most rapid increase (36% per annum on average) is seen in luxury hotel accommodation. At the cheaper end of the range 'B' class hotels and guest houses show an increase in the region of 18% per annum whilst 'A' class hotels and other accommodation (apartment blocks and rented houses) show a 10% increase. The dramatic increase in luxury accommodation is undoubtedly due to the efforts made in the last few years to attract upper income North Americans with the construction in particular of the Hilton and Holiday Inn. 14. When one looks at the changes between 1969 and 1972 some interesting developments appear. Hotel accommodation as a whole has remained static over the period whilst accommodation in self-catering apartments and cottages has almost doubled 1,500 to 2,796 beds in the three year period. This seems to indicate that the demand for luxury-type hotel accommodation has been more or less satisfied for the foreseeable future and that in part the increasing demands of the tourist of more modest means have brought about the increase in provision of self-catering accommodation. It supports the earlier contention that the upper income North American (and European) market is limited in its potential for growth, unless specifically attracted with an increase in the charter low-cost type of holiday. In addition the provision of apartment dwellings with government assistance is an attractive oronosition to local entrepreneurs without any hotel and catering experience since the level of service offered to the guest is generallv minimal- with iust maid service and possibly a small shop. 15.

In conclusion, therefore, and in the absence of a Tourist Development

Plan it

seemas

likely

that in

to 1992 there will 'h

the nperin

a fu,rt-her sl 4 ght

increase in hotel accommodation of luxury or other categories. growth,

however,

The main

likely to take nleae in the self-catering apartment or

i8

cottage type of development, which may or may not include restaurant and other

faeilitiea

wit-hin

t-hA

r-omplex.

This

assumes

no porlicy-%

t -l''

part of

the Government to be selective in the type of tourist it tries to attract bhit

to

rcntinuip

ton

attract

nn

inrreria

ro

nbinner

of

tnur isat

in

all

ic

inm

ranges. Space Needs for Future Tourist Accommodation 16. in

The space needs for accommodation to house the 1992 level of tourists the i.a.lnA

depensA

pnon

the Aensit

a-toptedby-aA futr

Physical Development Plan 1/ (3.212 p. for

the different

.t

t,nea

of

PhsicaDevlopuent

Pl*yanning

Office Y

toris4at

dvelopments.

These

n,rm..oi-4on.

are:

lan for Barbados Prepared- by the TG--ULLLVO

N

Jit ni

T.he

9) recommended certain density standards

LJed

ALWListncU LTLla

ar.d Count---

(June

ULL7Ly

Planning Office with United Nations Technical Assistance (June 1970).

Page 5

Luxur.Uotl

=

10 persons1

'A' Class Hotels

-

10 persons per acre gross

'B

Ldas

OLther

-

-A

42 persons

-

-

1 7

siUrLVty

accommodation indicates

per acre gross

30 persons per acre gross V

peL

persoirU

-

A satplte

I.

LiHLo.Ls

Guest Houses

Fe creros

u1UUtULLaL

recentLLy

acre

_o

t~

U0

Ltn

grsLUi i

r

r

b

uiLLL

types

VI

that in

general the densities of recent developments the [in Physical Development Plan. In the luxury class the rationalized density is something in the region of 36

nave been higher than those suggesteu

persons per acre. To an extent tnis is accounted for by developments such as the Holiday Inn, a multi-story building on a small site with a density in the region of 140 persons (beds) per acre. However, even some of the more spacious luxury hotels on the West Coast have densities in the region of 20 persons (beds) per acre so it appears that the Physical Development Plan standard is a bit low for this category. A rationalization of the densities in 'Al class hotels indicates a density of around 60 persons per acre compared with the Physical Development Plan standard of 10 persons per acre. This is accounted for partly by hotels on the south coast occupying small sites on the seaward side of Highway 7. The Accra Beach at around 40 beds per acre and the Windsor at 30 beds per acre or thereabouts indicate that again the

Physical Development Plan standard is too low. 'B' class hotels tend to densities in the region of 25 beds per acre compared with the Physical Development Plan standard of 42 persons (beds) per acre. Guest houses seem to conform to the Physical Development Plan standard of 30 persons per acre; however, apartment hotels tend to an average density of 50 persons per acre and rented cottages to 30 persons per acre compared with the Physical Development Plan standard for other accommodation of 30 persons per acre. The results are summarized below: P.D.P. Standard

18. Dbe

p. p. p. p.

p. p. p. p.

Existing Development

Luxury Hotels 'A' Class Hotels 'B' Class Hotels Guest Houses

10 10 42 30

a. a. a. a.

Other

30 p. p. a*p a(G.H

36 60 25 30

p. p. p. p.

p. p. p. p.

a. a. a. a.

p a 30 p. p. a.

Bearing in mind that the main growth in accommodation is likely to 1

o.L'.e self-catering type wiLt1h a fLur-,Lher smaLL f

~ ~ iLn LncLease

I-== L2

J

Itl0

be d

A3iL ,

is suggested that a density of 40 persons (beds) per acre be adopted in order to assess6tL-.e 'LdaLu needus of touriLsL accorCC iouatiLon .r1 , tiL'e per.Lou to 1992L.

APPENDIX 3 Page 6

Therefore

-

Beds needed in 1992

33,300

Deduct (1) Commitments (development underway or with planning permissions) (2)

Beds in existing accommodation

550 7,470

Increase to be accommodated

8,020 25,280

25,280 beds at 40 beds per acre = 632 acres 19. The total land needed for tourist accommodation therefore (excluding ancillary facilities such as shops, etc.) is 632 acres, if the predicted unrestrained demand is to be catered to. Capacity of the Island to Accommodate the Projected Growth 20. The figure of 1.5 million tourist arrivals in 1992 can be considered to be the unrestrained growth. It may well be that the island either cannot accommodate this growth due to physical constraints, or that the accommodation of this growth may involve investment beyond the likely economic of social resources of Barbados. The prolected growth will therefore be measured against the following potential constraints.

(1)

(1) (2) (3) (4) (5) (6) (7)

Water supply Airport capacity Building land for tourist development Capacity of the beaches Roads Construction industry Labor force

(R)

ThA sAcial impnat of this leve1 of tourism

Water Sunplv

21. Asstmin a reaident 1992 nnnpulatinn nf 9QR8,00 anA 12% of totni tourist arrivals in the peak month staying an average of 5 days would give a total resident and tourist population in 1992 of 318,800 persons. (i.e.

298,000 residents

+

1.5m arrivals X 12/100

6

_ 298,000 + 20,800)

APPENnDIX

Page 7

A PAHO/WiO study 1/ has recommended developments in water supply to cater to a n rc-en -r-being 1996U * -Tbese 48000 PFCJk.L~ pepl lno population rLr-n9'UV,VVVU U~4 L LL J." LA~O~ pOjuJ.L. uk Lof-J. implemented by the Government so it is therefore clear that water supply is LL umy of LUULrism aJ.LthoUghL LLL the rLUWL. riot going to bte ar. oVuerall c..ULLtLLaLL1t restrain development in certain areas. (2) Airport Capacity The results of recent study 2/ suggest that the airport runway

22. capacity

is

unlikely to be a constraint on the grOwth oL tourism.

Increasing

tourist arrivals can be accommodated by investment in additional terminal space at Seawell. (3)

Building Land for Tourist Development

It is estimated above that 632 acres of land would be required to 23. accommodate the additional hotels and apartments necessary for the projected unrestrained 1992 tourist arrivals. Whilst certain areas particularly along the south coast are intensively developed with tourist development, it is not felt that a shortage of building land will pose a constraint to the growth of tourism since -

(a) There are areas of potential building land at present undeveloped close to the sea in St. Philip, Christ Church and northern St. Peter/southern St. Lucy. (b) Along the south and west coast closer to Bridgetown the coast is solidly built up with development; nevertheless, there are areas where given the pressure a change of use could occur when existing residential areas are redeveloped for hotels and apartments. (c) Applications have been granted for the construction of hotels inland particularly in Christ Church. At the present time there is some doubt as to the viability of these proposed inland hotels; however, if they are a success this means that the search for hotel sites need not be confined to the coastal areas. It has also been suggested that some of the Plantation Houses could be converted into hotels and whilst again they suffer from the disadvantage of being some distance from the sea if this type of development together with some new inland hotel is a success, it will further alleviate the problem of land availability for hotels and apartments. 1/

Report on Comprehensive Proposals for the Development and Distribution of Public Water Supplies of Barbados - April 1968.

2/

Proposed Development Programme - Seawell International Airport - 1971.

APPENDIX 3 PagP

(4) Capacity of the beaches

R

-

24. In order to assess the capacity of the beaches a study was undertaken of those beaches in areas where tourist development was likely to be recommended. This expressly excluded the east and north coasts since it is felt that these areas should not be further developed with hotels or apartments (see statement of planning objectives, Vol. 1, Chap. III). For the purpose of this exercise the island was divided into 12 tourist development zones shown on Drawing No. 4.1. Due to the proposed limitation on further development on the north and east coasts (Zones A and L) no capacities were worked out for these areas. Beaches were graded with regard to (a) quality of swimming and (b) depth of beach. 25.

26.

The grades were as follows: A: B: C:

good safe bathing safe swimming but hampered by coral reefs hazardous swimming

1: 2: 3:

wide beach (over 60 feet at high tide) average beach (between 20 and 60 feet at high tide) shallow beach (under 20 feet at high tide).

From the grades different densities of occupation have been assumed: A A A B B B

C C C

1: 2: 3: 1: 2: 3: 1: 2: 3:

4 6 8 8 12 16 16 20 24

feet feet feet feet feet feet feet feet feet

length length length length length length length length length

of of of of of of of of of

beach beach beach beach beach beach beach beach beach

per per per per per per per per per

occupant occupant occupant occupant occupant occupant occupant occupant occupant

27. On the hbasi nf theas dens4-ty fi-guresr tnni n hpbeh rananities in terms of people were calculated for each zone. By subtracting the existing hotel and apartment rooms and makina an nllnwance fnr the use of hpbr-hes by local residents, the additional capacity of the beacher was calculated on a zonal basis.

This is show.n on Table 5 and am.oun.ts to the equ-iva-lent of a

further 10,920 beds assuming 90% occupancy in the peak month. th4a

preser.t amount t- 7 A7nd

a-4at4ino tntal

*nftothar with

Total beds at 10n Q9

PTtra

beds would give a maximum capacity of 18,390 beds in 1992. (5) Road System 28. newr

Barbados is fortunate in that it possesses a well developed road CVering cv

r.ost of u

tLhe

island.

Certa4n roaa

l4

this netork in

particular in St. Michael and along the south and west coasts (Highways 7 and 1

respectivUely)

WcaLrkry

LLrafLJ.

od

zLbU UV v

the

exitig Uparticularly cpait

APPENDIX 3 Page 9 in the peak hours. Proposals were made in the last Physical Development Plan for the construction amongst other things of a Spine Road running from Top Rock in Christ Church to Appleby in St. James, via the central area, and an Outer City By-Pass from Highway 1 via Hoytes in St. James through lhitehall, Codrington and Rouen linking with Highway 7 at Rendezvous. Subsequently, detailed amendments have been made to the alignment of these new roads following a more detailed study and the new alignments are shown on Drawings No. 4.2. 1/

29. It is difficult to assess the global capacity of the road system in Barbados either existing or with the construction of the new roads proposed. This is because of the number of variables such as location of population and employment, the level of car ownership in the future, the measures of restraint which will be applied in the future to the use of the private car for certain trips and the level of service and usage of public transport. 30. The types of trips undertaken by tourists during their stay on the island will fall broadly into three categories: (1) The trip from the airport to their hotel or apartment on arrival and the return journey to the airport on their departure. (2)

Trips into central Bridgetown for shonning or si2htseeing.

(3)

Trips to nlaces of interest in other narts of the island.

31.

These inurnevs will be made mainlv hv taxi or hired car and to n

lesser extent public transport. 32.

To consider the three types of Trip and assess their impact on the

the road svytem, firstly the Trin f,rom and to rho aiwrnort This will undoubtedly entail the use of Highway 7 (and part of the Spine Road if hbI4 t) 4n the 'cao of tomurists styInr4gn In acon^mmodtl^1on on tho sounth coast between Oistins and Bay Street. Tourists staying on the west coast are more of

enapairv

likel-

to

1,ae

Highway RI

U4

nhL7,,

Y

tlp

t,,

r4

P.-.XeA

net,vwo.erk

(ei4tlher.

existing roads or the proposed Outer City By-Pass) and Highway 2a, except for thnoseJstayir,

in

Paradise . Beach who would pr-o-ay

*se- e4i.ther

U.4_LV-oy

R,

Highway 6, Bridge Road, Bank Hall, Eagle Hall and Highway 1; or alternatively Y.ighwa

II

J1- 5 L L&Way

-an

-LL%.

the Spinle DoaA IL& OjA.LMi .- ~£

ifc the is ~ ~ latter .A.O. Lt_= A. .L2

built. U U_.L4 %_

It +-is . 2 1. A.

clear

therefore LiL4-i T,LU

that an increase in tourist arrivals from the airport is going to increase the trps on parts 11. of the exstn r,ewor whic ar tpesrtoerodda LILM 3LL. LUC%Ut=U OZL I.

JL

JA.O

1&=L.WVLM

WLIA.1L& LL

C

C

UVL

X.JV

In considering the number of additional trips generated by an annual arriLval figure of 1.5' millior. tourists '- L is necessar-y lookr atL the peakm ~L .LVaJ J~L I .J ULL.L.LJAJ I ~.L L L0 .L £ L 00 L to . AU±,.V. Lil times.

arrival figure. 1/

This drawing is not included in this Appendix but is available in the Tourism Projects Department.

AVPVP?.TY I

Page 10

m)de projections to 1990 of tlhe annual tourist

The Airport Study (Table

and other arrivals.

Figures in 1,000's

Tourist 133.8

1969 199fli~

I

.4A

Z

61.4 013 fO

Others

%

84.2

38.6

218.0

308.2

19.0

I 1It Is7

%

Total

100.0 10

I'.

It can be seen that they predict a declining proportion of total aLrrvals k.LAcuusldg etLLUnInLIg AbLUiILes, Lthe categury uL uoler Business Visitors and In-transit passengers). 33.

arrival:s

'I

The Airport Study (Table 6-32) also predicts a total of 3,250 peak hour passenger movements in 1990 and if this is extrapolated to 1992 wouid give a peak hour total of 3,400. Assuming that of this 1992 peak hour arrival 80% are tourists and 20% others, this would give an estimated movement in and out of 2,720 tourist passengers. Taking the assumption of an earlier estimate that 10% of tourists leave or arrive at the airport by car at (an average of 1.5 passengers per car) and 90% leave or arrive by taxi (at an average of 2.5 passengers per taxi) this would give a two-way vehicle movement in the peak hour of 1,160 vehicles. 34. In view of the fact that the time of the peak tourist arrival and departure (Saturday evenings and Sunday afternoons) does not coincide with the peak hours for journey to and from work, the road system to and from the airport should not act as a constraint on the growth of tourist arrivals to the extent of 1,160 trips per peak hour two way in 1992. Nevertheless if the proposed Spine Road, Outer City By-Pass and Oistins By-Pass are not built, these additional tourist trips may have the effect of exacerbating the overload on certain parts of the road network. 35. In the case of trips to and from Bridgetown to shop and sightsee provided that these are made outside of the morning and evening peak hour it is felt that the existing and proposed road network should be able to cope. 36. Finally trips to other parts of the island to visit places of interest are unlikely to cause over-loading of the network because of the comprehensive nature of the island's road system to which reference has already been made above. In conclusion therefore it seems unlikely provided the new and improved roads are built that the road system will be a constraint on the unrestrained growth of 1.5 million tourist arrivals in 1992.

APPENDIX 3

Page ii

(6)

Construction Industry

According to the Census the labor force in construction in 1970 was 37. 10,700 or 12.8% of total employment. No data exists to indicate what proportion of the labor force was engaged in the construction of hotels and apartments. A survey conducted by the Statistical Service 1/ indicates that in 1970 the output in the private sector of the construction industry was on average EC$6,000 per man. A study undertaken for the Caribbean Development Bank 2/ estimates that in 1971 the average construction cost per hotel room (excluding land costs) of a 20-room hotel ranged from EC$24,700 - $26,800, and for a 40-room hotel the range was EC$22,100 - $23,400. Cost of course depends on amongst other things the size of hotel, materials, finishes, standard of accommodation and ancillarv guest facilities provided, etc. Apartments which do not provide the same facilities as hotels will cost less and a reasonable estimate would seem to be EC$20,000 per room on average. In 1970 all new accommodation provided was in apartments, therefore 38. the number of construction employees engaged in their construction would be as follows: No. of beds provided

=

= 355 rooms

710

= EC$6,887,000

355 rooms at EC$19,400 per room 3/ EC$6,887,000 EC$6,000 per worker

1,148 workers

w

Tnerefore in 1970 an estimated 1,148 workers or 10.7% of the total construction labor force were employed in the erection of tourist apartments.

Average Peak length % of Total Month of stay in Peak Arrivals in Days Arrivals Month

Year

Maximum Tourists at one time

OccUpancy Rate %

Beds Needed

Rooms Needed

1977

420.0

12

50.4

5

8.4

90

9.3

4.7

1982

760.0

12

91.2

5

15.2

90

16.9

8.5

19R7

-1,008.0

12

121.0

5

20.1

90

22.3

11.5

1992

1,500.0

12

180.0

5

30.0

90

33.3

16.7

1/

Survey of Manufacturing Establishments - Government Statistical STrvice (as yet unpublished).

2/

A report on the Development of Small Hotels - Robertson Ward Associates I All I

3/

.II.

Assuming 3% inflation in construction costs between 1970 and 1971.

-

APPENDIX 3 Page 12 The additional rooms needed therefore will be: In the period 1977 - 1982 In the period 1982 - 1987 In the period 1987 - 1992

750 p.a. on average 540 p.a. on average 1,100 p.a. on average

39. The forecast of beds needed in 1992 has not so far attempted to differentiate between growth in hotels and apartments; however, because of the different costs of hotel and apartment rooms it is necessary to separate the two. In 1972 hotel beds accounted for 58.1% of the total, whilst apartments, guest houses and cottages accounted for 41.9%. In view of the trend towards apartments referred to above it will be assumed that in 1992 45% of total accommodation will be in hotels and 55% in apartments, etc. Taking an average construction cost of EC $23,000 per hotel room and EC $20,000 per apartment room (both in 1971 prices), it will be necessary to allow for cost inflation since 1970 which is estimated to be about 3% overall. On this basis equivalent 1970 prices would be EC $22,000 for a hotel room and EC $19,400 for an apartment room. Therefore -

495 hotel rooms at EC $44,200 605 apartment rooms at EC $19,400

=

EC $10,989,000 EC $11,737,000

Total construction cost

=

EC $22,726,000

Assuming no increased productivity in the labor force in the period 1992 Total construction cost EC $22,726,000

=

-

3,788 workers

Output of EC $6,000 per worker (1970 prices)

40. A total of 3,788 workers in the period 1987 - 1992 means a tripling of the number of employees in apartment and hotel construction between 1970 and 1992 and this will need to be considered in the context of the labor needs of the rest of the construction industry and other sectors of employment. In the light of the potential labor force projected in 1992 and the likely changes in other sectors of employment it is felt that this number of employees in construction of hotels and apartments could be sustained. Therefore, the construction industry provided unlikely to be a constraint on the growth of the tourist industry prodiced the supply of adequately trained operatives is maintained. (7) Labor Force 41. As in the case of the construction industry no data exists on the labor force employed in hotels and apartments in 1970. A sample survey of

APPENDIX 3 Pag

13~

establishments indicates, however, that the employee/bed ratio in hotels and apnrtments is 0?7 and n0 3mnploys per bed respectively. Nodetailed breakdown exists of the number of rooms in the different kinds of accommodation in 1970 (See Tnhle 4 above). It ic estimateA that hotel beds amounted to 4,350 whilst beds in apartments, guest houses and cottages amounted to 2,650. Theref

_r_

_cim4%

Hnt

_..t

. _

--

s4-

IF-

-u_t

v.L

Cses v v* anA;

zw*IIV-ou Scottage

was;

the same as for apatments i.e. 0.3 employees per bed the total employment in tourist acco0.1.0datiOn in 1970 WouIl be as follows 4,3150- beAs at- 0.7 work-ers per bed -

,.J.JS JCJO

aLI

'

* I

W'SL

.O

=3,4

UOt "

2,650 beds at 0.3 workers per bed

=

795 3,840 workers

42.

Again assuming that in 1992

hotels ar,d 557' ir. apartmLLenLts,

Hotels

-

Apartments

-

45% of total accommodation will be in

etc. , eClmployilent woula be as follows:

14,985 beds at 0.7 workers per bed = 10,489 18,315 beds at 0.3 workers per bed = 5,495

15,985 43. It is not felt that this fourfold growth in employment in hotels and apartments can be sustained, bearing in mind the labor needs of other

sectors of employment. In the context of the overall employment projection, therefore, it is estimated that employment in hotels and apartments could grow from about 3,840 workers in 1970 to 8,200 workers in 1992. 44. Assuming the same ratio of hotels to apartments (45/55%O) would mean that the maximum beds which could be provided would be: In Hotels In apartments, guest houses and cottages Total

7,695 9,405 117,095

(8) Social Impact 45. Brief mention must be made of the impact of increasing numbers of tourists on the social and cultural patterns of Barbados. However, because of its subjective and unquantifiable nature it is not possible to state with exactitude at what point further increases in tourism will start to have an adverse effect. The decision to restrict further tourist growth on grounds of social impact is a political decision and outside scope of a Physical Development Plan. It is possible, however, to present one social indicator

APPENDIX 3 Page 14 of the impact of the unrestrained tourist growth forecast. In 1970 at the peak month there was one tourist per 51 resident population whereas in 1992 this would have grown to one tourist per 10 resident population. Conclusion 46. Water supply, airport capacity, building land for tourist development, the road system and the construction industry will not act as constraints on the achievement on the unrestrained tourist growth initially projected. However, the capacity of the beaches and the labor force available will constrain it and all the capacites are summarized below: Potential Constraint

Bed Capacity

Water Supply

33,000 +

Airport Capacity

33,000 +

Building land for tourist development

33,000 +

Capacity of beaches

18,400

Roads

33,000 +

Construction industry

33,000 +

Labor force

17,100

47. The projected increase in tourist beds will therefore be reduced from 33,000 beds in 1992 to 17,100. 48. The revised land requirements for this number of beds would be 428 acres at a density of 40 beds ner acre.

APPLNDIX 4 Page 1

NOTES ON FUTuRE GROWTH OF DEMAND IN THE LDCs

1. The following sections, the mission has examined the individual characteristics of the sector in each island. In-depth studies have been carried out for Antigua (which is attached as an annex to this report) and for Barbados, Jamaica and Trinidad and Tobago as part of regular economic studies. St. Lucia

-'

The island with the most possibility of achieving a dynamic growth 2. of visitor arrivals is St. Lucia, where diversified investments with strong marketing in the U.K., Western Europe, Canada and the USA (i.e. Halcyon, Trafalgar-Cunard, Steigenberger, Holiday Inn) have induced high occupancy rates in very recent newcomers to the hotel scene. St. Lucia's stable political situation and kindly people are attracting both investors and tourists. The greatest handicap to growth is the threat by scheduled air carriers of a reduction in frequencies and possibly in size of equipment. Charter traffic is buoyant but too heavy a dependence on group charters, in which hotel rooms are sold at a discount, could affect the financial viability of the new hotels. Access to the northern sector of the island is inconvenient. After a very long journey tourists face a one and a half hour drive from the main jet airport, or a stopover and change of plane to a turbo prop (generally an Avro run by LIAT - a subsidiary of Courtline), in either Antigua or Barbados. Consequently, St. Lucia can only be reached in one day from its major markets at the cost of excessive tiring of its tourists. However, the charms of the island and the quality of the hotels are such that at departure, the intial negative reactions to St. Lucia tend to have been obliterated. Accommodation at present under construction will increase the supply of beds by 40% in the next four years. Since supply increased by over 400% since 1968 and since the slack in existing accommodation is only just being absorbed, a slower rate of additions to accommodation would have seemed advisable. However, at present, assuming no major reduction in airline capacity serving the island and that the average length of stay is likely to increase to an average of about 7 nights from the current average of 3 nights, St. Lucia could attain a 32.5% increase in bednights. Allowing for longer average length of stay, the increase in tourist arrivals would be 16% p.a. during the 1972-1977 period. St. Lucia may do better - or worse for that matter - but 16% in visitor arrivals and 32.5% in visitor bednights seems not unattainable during the 1972-1977 period. However, this rate is unlikely to be sustainable for a long period and is, by any comparative experience, extremely dynamic. A slower rate of additions to accommodation after 1977 seems advisable. Furthermore, to achieve greater efficiency more staff need to be allocated to public sector management of tourism.

1/

These sections were written prior to the collapse of Court Line and tourism growth has slowed in 1974.

APPENDIX 4 Page 2

Dominica 3.

The Tourist Development Plan has not as yet been successful in induc-

.LLng in.-vestents

in

neL w acco-W.odation..

An11

agreemer.t

-wasIL sigrn .edLLLr

I 197U 4

utLWeert

U

the Government of Dominica and an investment group - Valhalla, but the finan(ALi iS LLUL a^ULtU alU l WUU.LU Ut UuL.LJ.Nrt.y LU result in new hotel accommodation becoming available by 1977. In addition to lack of good resort accommodation, poor air access to Dominica seems to De a major constraint on tourism growth, together with black sand beaches, inadequate promotion and marketing and tne current adverse climate for tourism caused by incidents of violence towards tourists. None of these constraints except, hopefully, the last - seem likely to be removed in the near ruture. At best, therefore, Dominica should attain only a continuation of past growth rates in foreign visitors (wno comprise both business people and tourists) and in bednights, as no extension of the average length of stay seems probable either. Therefore, a growth of 10% p.a. in tourist arrivals and in bednights seem likely between 1972 and 1977. _.

-

J

_

_-

_--

_

__

___

J

-- _J

ytL

-

rVt:lI

CA

tLUI

-tw_

1 Jt_

CUUUII±LLUItL

-_

1_

nUW

Grenada

4. Grenada has the largest number of tourist bednights in the Less Developed Countries of the CARICOM group. Although tourist arrivals are lower than to Antigua and St. Lucia respectively, the average length of stay in Grenada at twelve nights is much longer than for any of the other islands and at least four times longer than for Antigua and St. Lucia at present. The demand analysis, based on different assumptions about supply utilization, shows that Grenada faces a supply constraint given a continuation of present high occupancies and the small number of additions to accommodation that are presently underway. Infrastructure improvements, particularly to the airport, should create the possibility of an even greater expansion in demand. The long length of stay clearly indicates the populatiry of Grenada with tourists,

as does the rather high level of year-round occupancy, indicating that seasonal variations are less marked than in most other islands. Recent disturbances in Grenada may reduce tourist demand but the effect is likely to be temporary, since their cause was unrelated to tourism and Grenada has been notoriously free of any hostility towards tourists. Given known investment plans, i.e. those prior to Independence, supply constraints are likely to limit tourist arrival's to 6.4% per annum during the 1972 to 1977 period, with a maximum utilization of capacity. Given the long length of the average stay, no further extension is feasible, therefore bednights should increase at the same rate as arrivals. A careful inventory of Grenada's physical resources is needed before large-scale additions to accommodation are undertaken. Should expansion be physically possible, Grenada becomes a prime candidate for investment in tourist accommodation. St. Kitts-Nevis-Anguilla 5.

The main tourist development project in St. Kitts-Nevis-Anguilla

during the next five years, consists of the Frigate Bay Development in St. Kitts, which has been slow in getting off the ground. However, with the

APPENDIX 4 Page 3 comDletion of the new airnort, nrosnentivp 1nvpqtnrs RPPm tn hp mMnrp intprpcted in the project. Therefore, major additions to capacity may be expected in St.. Titts but- only after 1977= Small proiects, which wotuild inprreaQo existing capacity in the three territories by a little over 10% p.a. are likely in Npvis and An,gmilla Until T 1977 then, moderate increases i.n annual tourist arrivals over and above the previous annual levels seem feasible. There an,pears to-nbe

no

rea

fnor expeactingcay

cnr

e,n- 4i

thr1-e

1leg-t-

sa

6.

The island has had a fast average annru"al growth (13. 0% in tourist arrivals between 1968 and 1972. The average length of stay (at 10 nights) test-ifies to thIke ~LL qua'l4ty 4sland's tourist asse's 411 and to LUL1 th-e pi predoruirac ~ 0f the L.Jt 1C 4.L0.OU LUUL L.L 0CL~ LuuCuLL4nce of private villas in accommodation. The number of visitor arrivals (just over 10,000I IV)

is 0

smaller than fLor any ofUthLe othLer LD%C 'sb ut iLt ranks

in a comparison of bednights. a supply constraint t1hat

wil.l

hi ghLIer

As with Grenada, Montserrat appears to have prt eventh

t1Ce

growthL

oUf

the

sector bUeyondl

an

average of about 6.5% p.a. during the next five years. The projected growth LU LUI. bL LJULLL~II~ LL.L4.L~ 41U LV~IU~ Vr-L) bLUa.LL± b.Zt 01 app'lies to touriLst arriLva'ls, bedr.ighLLts and re-venues. The very -l siz -- of the island and its population indicate that the tourist sector may face a *LLI

phIysiLcaL

growth

constraint

which will

prtLVtIL 4any

UkIJULor

addUULJ.ULb

LU

pcLy

in the future. St. Vincent 7. The number of visitors to St. Vincent increased by 8% per annum uuring the 19068 to 1972 period. A larger proportion of annua; visitors now arrive in the January to March winter season than did previously, lending support to the belief that St. Vincent's tourism depends neavily on weaitny winter visitors to small luxury hotels. During the rest of the year, tourist arrivals consist mainly of visitors to private homes and self-catering accommodation. Given the type of tourism, the existing longish length of stay, and the difficulty of access, a faster growth in tourist arrivais seems unlikely in the future. Hotels under construction, which have had financing difficulties, aim at the luxury market and may be expected to attract some additional tourists. Plans under consideration indicate attempts to diversify the structure of supply but these projects are unlikely to come into operations before 1977. St. Vincent seems unlikely to achieve a growth rate very much higher than its short-term historic level of 8% p.a., unless developments and supply constraints in Barbados, Grenada, and St. Lucia lead to a spillover effect that benefits St. Vincent. However, if this possibility is eliminated, a growth rate of about 10% p.a. seems likely for growth of arrivals, bednights and revenues during the next five years. Antigua 8. Antigua's own tourist sector appears to be capable of only sluggish growth in the future. However, the island also benefits from some stopover traffic, particularly from long-distance travellers to other islands in the

APPENDIX 4 Page 4

regLor. because

ol

Lts air traffic facilit.i.L

es.

lo 4icrease in. average

length,1-

of stay seems likely; therefore, a continuation of the 1968-1972 trend of 6.J5

p.a.

is

and revenues.

Lorecas

'Lor the foreseeable Luture irL

luritL

aLrrVals,

UbeLdr

L.

STATISTICAL APPENDIX Table 1:

CARICOM:

Annual Tourist Arrivals and Rates of Growth 1968-1972

2:

CARICOM:

Countries of Tourist Origin, Distribution and Growth Rates 1968 and 1972

3:

Tourist Arrivals in 1972 by Season

4:

Distribution of Visitor Arrivals by Quarter

5:

Tourist Arrivals, Average Length of Stay, Bednights and Implicit Occupancy Rates 1968 and 1972

6:

Hotel Occupancy Rates by Month 1972 - Bed/Room Occupancy Rates

7:

Comparative Supply of Tourist Accommodation

8:

Supply of Accommodation 1968 - 1973

9:

Growth Rates of Supply by Type of Accommodation (%)

10:

Standard Return Air Fares and Per Diem Expenses Selected Destinations 1974

11:

Comparative Price Levels - Sunflight Tours 1973-74

12:

Comparative Prices in Tourist Accommodation 1973 (US$)

13:

Comparative Hotel Prices - Holiday Inns and Hilton Hotels

14:

Additions to Supply by Category to 1977

15:

Projection of Tourist Arrivals, Bednights and Implicit Occupancy Rate 1972 - 1977

16:

Pro1ection of Tourism Revenues 1977

17A:

Proiections of Cruise Revenues for LDCs in 1977 undet various assumptions

17B:

Projections of Cruise Revenues for MDCs in 1977 under various assumptions

18A:

Tourism and Cruise Revenues

-

Proiections for 1977 for LDCs

STATISTICAL APPENDIX (Cont'd)

18B:

Tourism and Cruise Revenues: Projections for LDCs, MDCs and CARICOM for 1977

19:

Number of Rooms under Construction and Current Investment in Hotels, Guest Houses and Cottages/Apts. to 1977

20:

Direct Employment from Increases in Tourist Accommodation to 1977

21:

Physical Size of CARICOM Islands

Th

1

Antigua

nh= m

A

Dominica

Tm.t.-.1 -. . t

Grenada

rr.

and Rates of GrowUt 1968-Oy72

M4ontserrat.2

St.Kitts/

St. L[eia

St. Vincent-3

Nevis

Total Barbados JtPb',

Jamaica

Troni dad

Tlotb 1D

CAItlr I

Stop-Dver Visitor Arrivals:(Nmber)

1968

55838

9977

23164

6215

9797

22654

121.72

1969

61262

8246

29627

7475

11779

25382

1970

65369

13472

29529

1971

67637

14708

35626

7270

15105

1972

72328

15294

37933

11463

16245

Annual Rates of Growth of Ston-Ovf,

V1s1t-r ArIv.l.

I4011k

IICAo

25846fl0

o1A66

46A5A8c

to,,

15569

159340

134303

276926

94510

505739

665079

17586

177244

156417

309122

96890

562429

739673

33198

17407

190951

189075

359323

111330

659728

850679

42399

16902

212564

210430

407806

114550

732786

945350

i9AA - 1079 (4%:

1968/69

9.7

neg.

27.9

20.3

20.2

12.0

24.8

13.7

16.1

7.1

4.3

8.6

9.8

1969,70

6.7

51.0

2.7

12.1

14.4

16.3

13.0

11.2

16.5

11.6

nmg.

11.2

11.2

1970/71

3.5

18.1

17.0

neg.

12.1

12.4

nag.

7.7

20.9

16.2

28.1

17.3

15.0

1971/72

6.9

4.0

6.5

57.7

7.5

27.7

neg.

11.3

11.3

13.5

2.9

U1.1

11.1

Notes: 1/

1971 data bave been used because of non-availability of 1972 data

2/

Includes cruise visitors

3/

Air arrivals only

Source: Multiple,

bht mainly Tourism Supply Study - Caribbean Region, the Shankland Cox Partrarship, 1973

Table 2.

CARIODM:

Countries of Tourist Origin, Distribution mad Growth Rates 1968 and 1972

H..4-bes

of

Oreada

DoaLeica

Antigun

Nontserrat-n

St.Kitts/ movie

St. Iuca _

4

Vlment ' TotaL LDC'es

St.

Jamaia

Berbados

Trinidad & Tobago

ToalF

Total CARICON

rMDCs

Visltors - 1968B

USA Crnda

30296

2272

9600

384&

3525

6492

2871

58547

L1287

201790

33560

27663'

335784

7473

630

2859

985

685

2036

1244

15912

27879

24526

9710

62115

78027

455

2907

1222

13795

11493

9694

7840

29027

42822

9289

37o6

26136

61d1

176O

b9577

1929

1137

8902

16449

23110

6466

690

3610

367

11143

59-0

5229

)b09h8

2382

675

1866

2719

13157

45b4

U.N.

Caribbean

)

)148525

)50487

)2289 R.O.W.

184

uM.ber of Visitors - 1972: 30552

USA

Caribbean

21372

)

3269

)

7756

5786

68321

75525

316191

39810

631526

499847

1279

1022

4406

1122

20994

61918

38331

12620

112869

133863

16860

10320

43031

63126

4419

779

807

7158

879

21095

11216

) ) 6271 )

9920

18388

7331

) ) 96770

39139

19067

25770

83976

365

4690

583

18916

17357

25960

62233

9695 R5OY.,

4151

14851

1567

5506

U.K.

5631

776

6958

Canada

4200

3710

) 242979

Distribution of Visitor by Country of Origin 1968 (1972) - Percent:

Cada U.K.

.9(o )

Ii(34.7

3.5)

'JS Sb.3(4.03)

22.8(18.)1.1

13.6(10.3)

6.3(5.3)

12.3(14.3)

13.8(10.2)

8.1(8.1)

6.9(10Y5)

.6(J..6).

5.2(6.2)

59.2( (65.8) 6.8(

22.6(29.6)

Caribbean 20.0(31.6) 4/ 6.3(4 8) nt.u.w

36.7(25.6)

2847(18.3)

7.0(6.3)

9.0(10.4)

4.6(51.6)

5.2(C6.2)

41.0(43.4)

50.5(61.0) 32.1(5U.1)

-

8.1(9.0 j

1.9(2.1)

28.2(36A9)

357(35-9)

-1.5(10.1) 24.1(29-4)

1.C.V12.. 10(.6

9

)

I

.

.90.2

22.6(18.6)

36.6(46.7)

u 2(.7

1

42 2(33n0

12.2(7.1)

7

36.6(46.7) )

78-1(77-

9.5(9.b)

SSLt(3.2) So-.i(6.At -

36.6(l)i.B)

10.6(11.0)

2.3k4.7)

19.0(22.5)

6.3(4.3)

25.2(2.7)

12.9(Lb.2)

13.3(j4.8)

3. 8(b.

S.0A..i

)

7.1 (6.7)

8)

10.6(11.0) 24.6(25.9)

.(9-°

---

Anoual Compound Growth Rates 1968 - 1972 (Percent): US

6.3

6.6

8.2

4.8

4.2

4.5

19.1

3.9

16.3

16.9

4.8

n .8

10.5

Canada

nmg.

5.6

17.6

6.7

10.5

21.3

aug.

7.2

22.1

11.9

6.8

i6.1

16-.

20.7

15.6

25.3

.-g/

11.2

6.6

14.8

7.1

9.7

10.2

) ) 17.7 )

i0.6

33.5

12.6

14.0

20.7

1.4

3.0

6.5

16 0

12.1

9.7

12.0

CarIbbean

24.2

5.2

22.4

6.6

U.K.

)

TOTAo:

6a7

19.0

18.6

18.6

17.0

24.9

nmg.

13.5

17JO

ilI

28.7 ) 18.7

l1.0

R.O.W.

2

21.0

11.0 b/) 13.0

10

15.2

10.6

tho Shanklsnd lox Paritorshap, 1973 2/

I-ludes Cnnse visutors.

3/

R.O.W

= R..L o

-wb:-ld

) 13.1 ) 11

6

TaKle 3.

To'Clrist Arrmvals in 1972 by Season:

VLLnter

Nurmber

Doir,iica .reniada

5335 .)

(Dec\.

- Mh)-.-er U

(Apr-lJ--

( %)

Number

36.2

I*J)

( % )

940~2

63.

46JU55

.ontserrat

St

•IUtts

St.

iytcia

17035

40.2

25363

59.8

St.

Vincent

5662

36.1

10039

63.9

Barbados

82805

39.4

127544

60.6

Jamaica

153889

37.7

253917

62.3

Trinidad/Tobago

40850

35.7

73700

64-3

TUTAL N!DCs

277544

37.9

455161

62.1

TUTAL IDCs

TOTAL CARIFTA Source: IMultiple, but mainly Tourism Supply Study the Shankland Cox Partnership, 1973 Note:

-

Caribbean Region,

Monthly breakdowms w¢ere not available for all islands. Since the islands do not show a seasonal breakdown themselves, the Mission used monthly data for December to March for the winter season and montly data from April to November for the sumirner season.

'.able

1.

m Lsr..LI,-uLI

ofj

VJ...l- Wl-

-r"vL

VaLs

Uy

.LLd.1

Utzu

Jar.n-ar

Apri'J -Jun

.LUJ

Ofl-Sopt

-

jt

Antigua

-

1968 1971

33.8 32.2

19.8 20.8

23.2 24.3

23.2 22.7

Barbados

- 1968 - 1971

27.6

21.1 19.3

25.2 214.2

26.1

29.8

26.7

- 1968 - 1971

29.7

22.9

25.6

21.8

29.5

23.1

26.5

20.9

- 1968

20.1

31.0

28.1 23.2

27.9 26.

23.14

- 1971 Dominica (Air)

- 1972

24.9

20.0

28.8

26.,

GTrenada

- 1972

32.9

19.9

24.6

22.6

Montserrat

- 1970

32.6

19.9

21.0

26.5

St. Lucia

- 1971

25.1

22.4

25.6

26.9

Jialca St. Vincent

Source: The Shanklard Cox Partnership

19,3

Table Tourist Arrivals No.

s

Antigua 55838 Dominica 9977 Grenada 23164 Montserrat 7125 St.KittsNevis 9797 St. Lucia 22653 Ft Vincent 12472' TOTAL LaDc 141026 Barbados Jamaica Trinidad/ Tobg TOTPT, .0Cs TOTAL CARICDM IUtesM

115695 258&60 A. 465815 606841

4

7.1 16.1 5.1

4 7 10

100

Tourist Arrivals. Average Lenath of Stay. Bedni2hts & Imolicit Occunancv Rates 1968 and 1972

Avg. Tourist Bednights Available Bednights Implicit Tourist Arrivals Avg. Tourist Bednights Available Bednights Implicit Length Occupancy Length Occupancy of Stay No. L No. Rate % No. of Stay No. % No. Rate % R 19_q6 W_ 197 2

39.6

6.9 16.1 8.8

e

223352 39908 162148 71250

32.3 5.8 23.4 10.3

696420 54750 273020 123005

40.0 3.1 15.7 7.1

32.0 72.9 59.4 57.9

72328 14737 37933 12529

33.9 6.9 17.8 5.9

2., 4 12 10

180820 589486 45519 125290

15.3

877825

5.0 38.4 10.6

165345 632910 181040

26.1 4.9 18.8 5.4

20.6 35.6 71.9 69.2

5 3.5 c

48985 79286

7.1 11.4

208050 208780 176295 -9-

12.0 12.0 101

23.5 38.0 389

16245 42399

7.6 19.9

5 3.5 _2

81225 148396 135216

6.9 12.5 11.4

339450 831470 340545

10.1 24.7 10.1

23.9 17.8 0 o

39.8

213073

35.5 66.3

210430 407806

k,70

4.9

692278

24.8 55.5

6 9

694170 2326140

1.IA.

2

100

100 19.7 66.0 19.7

.

7.6

3524440

6.9

4216718

100

1740320 1956400 3509840 e-

5

6417430

8157750

100 30.5 54.7 I0.0 100

t4.3

100 28.7 55.7

1.8 5 .9

l-I

732786

9245859

5.6

1185091

6.5 8

1367795 3262448

60025 100

100 26.0 62.0

01)140

7.2

5260268

6.8

6445359

3368585 2837145 6524010

.15

100

10610185

13978770

100

35.2

26.7 61.5

48.2 50.0

11.0

90314

100

49.6

46.1

e reusoer Uo tUurist bednights is derived by mUltiplying total arrivals Dy average length of stay. 2. Data for average length of stay have been derived from many sources and for the smaller islands could be subject to wsde margins of error. 3. Available bednights e number of beds in tourist accommodation x 365 nights. 4. The occupancy rate tourist bednights 4 available bednights. 5. The occupancy rate shown for Montserrat may be too high since some villa accommodation to which long-stay tourists are attracted, may have escaped inclusion in available bednights. 1

S^urce: r.tiple but mainly Shankland Cox, opus.

cit.

Table 6:

HOTEL OCCWPANCY RATESBY MONTH1972 - BED/ROOMOCTUPANCY RATES

Ja..

Feb.

Mar.

April

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Annual Average

Standard Deviation

Comment

Antigua

13.1

27.5

70.5

25.0

21.0

18.8

12.0

12.5

2.4

18.2

12.5

26.5

22.0

-

16.3

All hotels (beds)

Barbados

48.6

75.4

60.0

50.8

32.3

24.3

43.4

48.6

31.1

43.0

58.4

58.1

48.3

-

13.7

Hotels and guest-houses (beds)

Doonsca

32.3

46.0

28.7

26.9

17.8

15.8

23.3

28.4

15.6

16.2

20.3

17.5

23.8

-

8.6

Hotels and guest-houses (beds)

J.aiuca

57.5 51.1

74.0 66.2

59.7 57.1

54.2 4.8.5

34.9 32.3

37.1

55.3 59.0 34.1. 1.6.1 53.3

30.2 28.9

27.4 30.9

49.5 56.3 1.6.2 51.0

9.2 4.5.3

-All

7.4

24.1

43.9

46.3

25.6

11.0

30.2

11.5

6.8

6.0

7.3

19.3

-

St. Lucia

27.8

69.6

47.5

31.3

18.3

8.6

23.3

25.4

12.6

18.3

22.7

36.5

28.7

Tr;radad' Tobago S.a

60-.1

5.2 Cox ppoost

55.2

48.6

46.5

35.9

44.2

52.2

45.3

44.u

51.6

45.6

47.0

Montserrat

Source:.

Shankland Cox

yus cit.

9.1

11.1

-

All hotels (roos) hotels (beds)

13.9

All hotels and guest houses (beds)

15.9

Hotels and guest-houses (beds)

6.7

otels (rooms)

Table 7:

COMPARATIVE SUPPLY OF TOURIST ACCOMM4ODATION

CARIBBEAN Growth Beds Rate Number Percent I.

II.

Hotels 1968 1969 1970 1971 1972 1977 a/

96054 113576

Beds Number

3830 4385 5512 6280 7235

34

Guest Houses 1968 1969 1970 1971

III.

308 392 362 501 5757

neg.

627

0

Growth Rate Percent

Beds Number

5.7

17179 19388 22064 25047 27691 35677

27.3 neg. 38.4

1422 1492 1269 1571

14.5 25.7 13.9 15.2

CARIFTA Market Siare Percent

28.8 31.4

Growth Rate Percent

12.9 13.8 13.5 10.6 5l2

4.9 neg. 23.8

1I1 riRR

o 0

10.9

1.6

1834

3559 4543

31.9

neg.

Cottages/ Apartments 1968 1969

440 800

81.8

n., .L7 [U%

nk7L4U

1,, ' .Lf.1

,

1971 1972 1977 a/ IV.

7.5 8.4

95.43

ln7

1977 a/

LDC's Market Snare Percent

24839 26360

Total Accommodations 968 1969 1970 1971 126736 1972 145693 1977 a/

Note: a/

1.2

1131 1416 2058

2.8

4578 5577 6814 7912 9229 12228

,

5.? 7.8

20.3 25.2 7.8

7985 8712 9954

7.3 8.4

21.8 22.2 16.1 16.6 5.8

22160 25423 284)66 34603 38298 47465

Beds available n 1973 (or 1972) pls those -n.der constr-actior.. annl average compound growth between 1973 and 1977.

27.6

The growth rate shw-

35.1 37.8

55.6 9.1 2.7

14.7 12=0

30.2 32.6

21.6 10.7 4.4

for 1977 is an

Table 8

Antigua

1968

Hote Guest House Cott,ge/Apt

1798 110

Doilinica

Grenada

100 50

484 100 16 71;.

1970

19?1

1972

Hotel Guest House Cottage/Apt Total

165 50

_

541

370

31 77

664 130 506 1300

96 14 262 372

440

970 130 500

116 26 280 ri7-0

485

l040

EAC

80 1120

140 26 310 7 140 26 330 U7

533 101 101

21

Hotel Guest House Cottage/Apt Total

2102 80 80

180 50

3 5*

3

T

HoLel Guest House Cottage/Apt Total Hotel Guest House Cottage/Apt

2062 80 90 2232 2208 86 111

242 65

1042 156

307 364 67 22

Hotel Guest House Cottare/Ant

Totai NOTE:

2B

17gT

2330 86 111

382 78 12

2527

92

St. Lucia

370

2012

Total 1973

1888 124

St. Kitts

96 6 245 31.7

Total 1969

Montserrat

SupPlY of Accommodation nunber of beds)

550 17 1028 186 520

1120 202 S26

110 26 312

T1

a/ estimated assuming supply is unchanged from 1969. b/ estimated assuming supply is unchanged from 1972. Sources: Mainly Shankland Cox opus cit.

640 32 672

1620

1968-1973

St. Vincent

441 42

1700 71R9

703 140 187 1030

2822

-

126 227

126 291

Barbados

3830 308 440

3765 378 1217

_

E T(260 L92 71

L385 392 800

56 619 76

641 73 TT 660 73 200 933 748 73 (200)b/

1021i

Jamaica Trinidad/ Total Tobago MDC's

361 1902 9671

a/ ( 372)-/

1114 3119

2=

/ 175,82

8413 374 2163 1095

2234 372

15003 1100 3743

55

4356 354 1580 290

5512 362 940

3430 149 1601

10760 [06 2592 135 '; 27;

2362 352

16552 907 4193 21652

=

80

683 140 107 930

Total LDC's

6280 501 1131 7912 7235 578 1416

8215 605 1 21, 10371

3768 189 3485 712 4314 430 3029 7773 4161 320 (lOnhb/ 751

tL

12099 501 3369 15969 13120 487 1267

2900 380

17874

3422

320 3022 400

18767 1070 6854 26 20L56 1317 7296 29069

13895 (3022)Ž' 21078 (48 7 )b/ (400)L/ 1207 ()l2(71b/ 7"9( (-3[22T2/ 29531

t~9'

Table 9

1968-69

1969-70

Antigua

Dominica

Grenada Montserrat

St.Kitts

St.Lucia

______

_______

________________

_______

_______

Hotel Guest House Cottage/Apt Total

5.0 12.7

65.0 0

37.2 30.0 308.5

T1

143.3

73.8

0 233.3 6.9 7.2

Hotel Guest House

11.3 neg.

9.1 0 _ 7.0

46.1 0

20.8 85.7

Cottage/Apt 1970-71

1971-72

1972-73

23.3

Total

7.8

Hotel

1.3

22.2

nag.

19.8 5.

4.

3.6 neg.

13.9 38.4 20.3

9.8 26.8 217.7

]L3.T-T 7

2.7

1

50.4

neg.

0

28.1

32.8

3.0

15.2

14.5

3.1

19.2

0

38.6

15.4

27.5 e

0

neg.

6.4

59

neg.

4.2

26.5 0

0

0

Jr

1,2

(

71.8

J

6.6

37

t0 13

30.7

18R3

7.8

9.3

15.1

34.2

~26.8

26.2 19.8

2.9

1

6.9 I.9

Note: Growth rates for 1968-73 are average annual compound rates.

0 5525.2

0

Source: Calculated from Table 8.

17.5

22.o

51.

8.6

5.8

5.7 neg.

51.5

12.78

8.9

Cottage/Apt

27.9 8.6

33.5

4.9

neg.

neg. neg.

5.8

16.4

5.3

25.7 neg.

9.9

0

Guest House

25.8 2.7

20.7 0 10.

776

Hotel

14.5 2.7 13.7 13.9

7.4 20.0 10.0 9.2

5.5

Cottage/Apt Total

250.0 6.

15.7 neg. 29.8 1T7T

10.2

34.4 30.0

7.5

62.5

17.2

14.5 27.3 81.8 =1

6.9

neg. 0 12.5 neg. 7.1

10.2

11.6 76.2

13.4

Hotel Guest House Cottage/Apt Total Hotel

139

18.3 3.2 17.5

St.Vincent Total Barbados Jamaica Trinidad/ Total Tobago HDC's _________ LDC's

23.1

12.4

Guest House Cottage/Apt

18.9

(%)

neg.

Total

Guest House

1968-73

Growth Rates of Supply by Type of Accommodation

23.3

8.4 neg.

4.2

6.4

14.0

neg.

5.9

4.7

neg.

0

7.6

0

neg.

11.1

16.6

39.1

11.9

14.5

neg.

1

28.2 7.8

24.4 6.7

32.4

2.0

9.0 23.1 8.

4.3

0

tht

5-3

26.6

13.3 0

9.1

20.8

11.9

9.14

12.0

13.4 18.0 63.5

31.1 0

10.3 neg.

22.8 8.0

30.7

28 9

0

12.4 neg. 20.0 12.5

12.4 23.4 30.0 16.1 7

34.0

7

22.7

4

1.

0 0

0 0

neg.

o

1.8

3.0

0

4.3 13.6

6.2

6.o

1.4

17.5 14.2

0.6

1.6

18.5 A

11

Table IO: Standard V?eturn Air Fares and Per item 1;CpEpenses Selected Destinations 197 4

I/

US Destination

Ret. rr Ai;r Fare

Per n em--

from WnshinEton

TJU $_

210

Bahanas

Barbadcs

,20

Bermud;a

190)4

50

4[5

L0

Co-Lomv U,go

270)

L"0

370

35

haiti

320

35

r>-{awaii

Lb°

5

lanai a

320

[5

.eo

31)

16-H

380

[6

IX9mi, rAc

R4epul3^5ic

Prenco

..

:to

Aeth.Antilles

:

[5 460

Trinidad & Tobago

VJenezuela

h6o

$0

Greece

PPO

'5

F'rance

00$)

Italy

7002

60

Portugal

-60

b;o

Spain

''?

[6

S.ritzexKband

f,20)

_

S,0e t _zqr a.S1di/

.vi a v)3 [7

India f72

Kr,enya

cl'0

IV.oracco

1/

r

r,riPer diem exnenses include hotels (generlly first class), meals. airport tax, comxrnunicat,ions valet, transportation, ba,-a,e handli other miscellaneous costs.

Souyrce:

I31'D

d

ll:

Table

Destination from, Toronto

No . of 'eeks

Type of Accommodation

one

Holiday Inn " Studio Apts.

, ,h nzas `'reeport

two two one one two,

iassau larbados

tw

c

one ene each one one

, .aracas

,luracac

h'ice 1evels

Comparative

'Trenada au~delcrn2oe Taitit

'rie e US Dec.lb-Apc *1 I Oct.14-TJec.9

Type of Aiate

EP

209 2 9239-

239

9

"

249-259-

Holiday Inn .ttS ] -'-ed. d tucl.o Apts. rioliday I-nn

1'9

157

269

219

' ?

359 409-29-

J_

439

1?

r

345-379 109-50I

HoCtep'

,79- 7

two

,:

i

one

"

CT,

319-339

jCoc

QDfQ 51.=99!5

t-.s~~~~~~~~~~~~~~~~~~~f !!

__n_____

Sun!Light Tours 1.9?3-7-

-

Inn

two

4oliday

two t.o

Ar, rtrzPr.t1

HP

19? 91V9

11

22

299-309 IA

a iaica

Lchc"s

Hti O s

l!

o_ Playf-.ov, -lote'

AkaDuOIco

one

Wolidar

?ozuirel

one one tTeo one

l4otel "

s

St. Lucia

39-2S9 Inn

3_ 339 3F

;4oliday Inn T4telI Hroliday Inn

t-,.wo San Juan

2?9 2: nl 299

27

one

two one ne

a-tiniq-,ue Ke•lco Hcc,

339 ?99

9

19',-

one

ti "79-2°9

'7-?f92-2 339-360 320-31C:3 L 3

239-2&9

Sp ai n (jan.aryr

Ls'ands

l -bd

T0710

ZETU 'ILU

one

Hotel two~~~'

Costa del Sol

.Pnts.

one

11

P'-

"I

oF

207

"

517

3,7

one

H-liday Inn

_P

tTw,o

Efficiency Apts.

CF

oneo

i,,idy

Tn,

.477

3L7

l,7_ln

2437-),'7

char es a-e Note: In all cases pri.ces are for douhfle oc.cupancy for o twln-'b edded rr'--. . s Illot-ed ,)! OOiz at,fl. for sor'e desr:t ronvahle en certnin da+es in the r-Pk r-r, :'c 4: r.1+-Ar.l_ '3. tb-c -. 1.1in dates mavy De on offer only durin- part c-f' or on certair (;nt_ T)L-T)P.

}Thbrevri,at,icns:

9

n-ri nrTh

IP = Continerntal),.

Oom r nl.y - no meals, r= "L T'AF

fast and d5nner,

Al' -io~

r'F

W's

c

Y--m and kreakfast Pi an: `4nHtel ro-Dm

-j-ier

b-)cr reakfast,

lo.inch and dir

r-

'>e ePr-y her 4'u1l o)r t.e irn-'>lides brea-

!aDoe

.2:

tin

Tourist A,stw,uiudati.,--

TMOT FT,S

Season

Coin r

'rm.se

CoaparaLLve

197zg)

4,

GUEST r-ouSES_

_

Low MAP~~~~~~~4 43 SAP12

Antigoa w

~

'Domlri !

ii~Ap

551 84s 980D

11IA' 20S

S

20D Ap 16 s 270 1AP

9 S 181),

MAP

9S

300

!Ai-4s

I5

60no Grenada

Montserrat

S

IIAP 48 S

W

600~ iIAp OsS 95 0

S

MAP 20S

N

300 NAP 358S

LAP 10.25 S 220 Ilik. 11A17.95 ls AP 22D0 MAP

S

AP 40S

N

70Do MAP 54S

MAP

AP'

S

MA-P 3ILS 50 D

N

~~~~~MAP 603

AP'

MAP AP'

S

AP

N

LDCs

40

AP8OS~~~v 110 D

SMAP48 W

S

S A? 70 0 MAP 84S

E?

120D

6

MtAP 12 S 22 D 14AP

14

_

__`_

_

-tg

_

_

ow-

i7 3

2

21 :P 28 s

EP

b)

50 - 1001A THb)

1AAP12 S a)

a)

f)

(2-3

22 1)

2;

I-AP 14 S

"AP

260D

6 s

S 30675 D

EP

Ep

AP 18 S

AP 30

:O-P60/WE

n/a

11 M4AP 6 s 11 0

16 S 260

83

_

Ho

sa)

a) a

2D EP 68A7K 1

260/wK 1 R

75/WK

6o/wKsb

EP 60VIK S

75/WK D b)

WK D

E l')100/WK Sb)

53 D

) 125/WEKD

125/WE D EP

Al' 20.50 5

5S

EP 2O0/WK 3R

EP 6)/wKEi?

EP 310/WK 3R

EP 90tIKER

10 D

30.750D

EP

5S 100D

MAP 10.25 S 20.5-0 0 MAP

MAP 5 3

5.25 S 10.50 D)

a)

EP5I4 2R

E? 12 Studi-o b) EP 25 :tudio

EP

EP

EP

20 20 b)

170D

75

Al'

__

330D

21,D

AP

_

-fg

10D

30

12 S 22 D 123

90D

St. Vincent

6 s)

18D

11S 22 D 11S 20D

AP SOD St- Lucia

EP

12S

52D SL.EKitts

Lt

26S6

c)

75/WE 2?

63/WE 10

EP 150/WE 2?,

EP 105/WK lL

EP 165/WK 1R 220)/WE 21 EP 290/WKElg 595/WKE2R

EP

EP 210/WE 280/WE EP4555/WEh 525/WE

EP 100/WE 2R

12.50D0

AP AP

980

7S3 12.50D0 53S 12.50D

AP 20.50 5 30.750D

MAP

5.25 s 10.50 D

MAP

63S 110D

AP11O D Barbados

S

MAP 42

61D0 N

MAP 90S

115D Jamaica

MAP

8.503 15D MAP? 185 280

S

mAP 69 3

OP

N

79D0 Al' 117 3

13D0 El' 10 5

150D0 Trinidad? Tobago

S W

MDCs

S

MAP 503 56D 0 mAp 6Gs 850

15.50 0 6.50 3

mAP

10.500D

AP 117 S I~0f

4550 MAP 12.50 5 EP 18 D MAP 25 3 36 0 EP 12 S 20 D EP 16Ss5.500D

75S lq D AP' 93S 180D

El' 5.50/P El' 5.50/P

EP

2.80 5

MAP 15 S mAP

6.503s 10.500D

350D3? MAP 315 550n

Source: Official Hotel & Resort Guide (Nov. 1973) Notes: a) based on 1 guest house cottage/apt.complex b) '1 C) 2 guest hou3es

MAP

300D

mAP 69s

790 W

8s3

MAP 153s lb3U MAP 31 S

Notes: P = R = 'WE =

Person Room 'Week

2.803S 5 .500D

113 20 1) 20

60/wE 10 1 C00/WK 2 R El' 92/WEb1 140/'dK2o

El' 175/WE 20

EP 200/WE 10 b)

Table 13:

Comparative Hotel Prices - Holiday Inne and Hilton Hotels

a)

b)

Holiday Ton

Note: These say not be tle exact dates for each islandhhotel Antigua

MAP EP

Do.inilzca

HAP EP

Grenada

KAP EP

Montserrat

MAP RP

St.Kitts-Nevis

MAP EP

St. Lucia

MAP F.P

4.45-72.. 12-14-72 25 15

4-15-734-14-73 12-14-73 S D

r

29 17

46 22

50 38

6b 40

33 21

52 54 28 42

68

25

40

49

66

27

42

48

60

31-

20

39

46

17

22

38

40

1925

49-5056 58 25- 3832 46

66-

15

31 19

49 54 25 42

68

MAP EP

Jamaica

MAP 31-

37-

41

4) 39

66 27 4.6 17

42 22

414 9 25 38

62 in

34b2

4856

32.542.5 2033

5161 2636

7381 4856

3641 242)

57- 6o62 72 33- 48.J6

HAP

27

42

53

71

29

46

55

75

EP

17

22

43

51

17

22

43

51

mAP -lP a) Caribbean Vacation Planner, 9th edition b) Caribbean Vacation Planner, 10th edition c) Official Hotel 1 Resort Guide, 1ublishad Nov. 73

5b.562.5 42So

4-15-7312-14-73 D

Hilton Hlotel

12-15-724-l1-13 S D

April 15Dec. 14 D s D

Den. 15April lb D

44

33 19

26-

c)

Hilton Hotel

12-1534-14-73 S S

72 40LB

60 40

47

36

37

4-15-72 12-14-72

44

48 38

20-

30

Sources:

D

b)

Hilton Hotel

Dec.15April 15

68 51

St. Vincent

Trinidad/Tonago

__

a)

Holiday Inn

April 15Dec. 14 D _

48 41

40 20

Barbadon

c)

bnn

12-15-734-16-73

40 20

25 15

RP

Holidav

12-15-72-

5570 30bO

~~~~~~~~~~50

8092 566W 56 36

6080

3545

48-

5 35 3642 23e,

2838 5761 3135

58

5878

6883

W-

.,d68 8727 61/1

40-

3d 43

6U89 4068

92120 5280

3646 243'

5363 293)

63 6

-

(d 5565

Table )14:

Category of Accommodation

Antieua

Hotel

3182

Dominica

Grenada Montserrat

AddLtions to Supply by Category to 1977

St.Kitts/ Nevis St.Lucia

398

1142

140

723

86

8[

202

26

L4o

199

tO

80

342

267

206

3467

522

2148

508

1127

3028

St.Vincent

Total LDCs Barbados

1136

9543

4361

89

627

320

Jamaica

18115

Trinidad/ Tobago

3598

Total MDCs

Total CARICOM

26134

35677

1207

1834

7696

9954

35237

47465

24.0

21.7

2822 Guesthouse Cottage/Apt.

TOTAL.

(200)+

(487)+

2058

(3629)+

1425

12228

8310

22929

51.9

15.7

4.8

30.8

(400)+

(426?7+ 3998

Absolute Percent Irrreases in Accommodation 1972 - 1977

Hotel

36.6

4.2

2.0

0

2.4

19.1

0 Guesthouse Cottage/Apt.

TOTAL

0

7.7

0

0

0

79.3

25.0

52.8

0

42.8

63.5

21.9

37.2

6.1

16.2

0

9.4

2.7

0

39.6

3.6

0

0

35.0

19.8

o

17.8

10.6

23.0

0

16.8

0

12.9

19.1

18.8

Note: The data refer only to accommodation under construction and not to additionalaccommodation that might be at the planning stage. Source:

Shaklmand Cox, op-s cit.

0.'

8.2

Table

A.

Projection of Tourist Arrivals, Bednights and Implicit Occupancy Rate 1972 - 1977

15:

LDC FORECAST Arrivals Compound Growth Rate 1972-1977

Numbers 1977

Share in Total LDC Arrivals Percent

Percent

Montserrat

6.5 10.0 6.5 6.5

99089 23729 51792 17166

23.3 5.6 12.2 4.0

St. KittsNevis St.Lucia St.Vincent

15.0 32.5 10.0

32675 173178 27221

7.7 40.7 6.4

425030

100.0

Antigua

Dominica Grenada

TOTAL LDCs B.

Average Length of Stay 1972

Tourist Bednights Share in NumiberTotal LMC 1977 Bednights

12.0 10.0 5.0 35 8.0

247722 94916 623664 171660

11.7

Share in Total LDC Available Bednights Percent

1977 Percent

Nights

2.5 \.0

Available Bednights NumribeL 1977 1265455

4.5

28.6 43

784020 185420

29.3 8.1

Implicit Occupancy Rates 1977 Supply Percent

19.6

4o53n 49.8

17.7 4.2

79.5 92.6

163375

7.7

375950

8.5

43.4

606123

28.A

217765

10.2

1105220 520125

25.0 11.7

54.3 41.9

2125225

10O0.0

4426720

100.0

46.0

MDC and CARICOM - LOW FORECAST Arrivals Numbers Compound 1977 Growth Rate 1972-1977 Percent

Tourrist Bednights Share in Total MDC Arrivals Percent

Average Length of Stay Nights

Number 1977

Share in Total MDC Bednignts 1977 Percent

Available Bednights Numnber 1977 _

Share in Total MD' Available Bednights Percent

Implicit Occupancy Rates 1977 Supply Percent

4.0 8.0

256020 599198

25.5 59.6

6.5 8.0

1664130 4793584

22.9 65.8

3033150 8369085

23.6 65.1

54.9 57.3

5.5

149711

14.9

5.5

323410

11.3

1459270

11.3

56.4

TOTAL MDCs

1004929

100.0

7281124

100.0

12861505

10,.0

56.6

TOTAL CARICOM

1429959

Barbados Jamaica Pr.±..4A,A

0.

Tobago

(A A. CIPTPU

-

r

54.4

17288225

9406349

F-rORECAST

316413 656775

28.2 58.5

6.5 8.0

2056685 5254200

25.3 64.6

3033150 8369085

23.6 65.1

67.8 62.8

T19711

13.3

5.5

823410

10.1

1459270

11.3

56.4

TOTAL MDCs

1122899

100.0

8134295

100.0

12861505

100.0

63.2

TOTAL CABIaWM

1547929

8.5 Barbados 10.0 Jamaica Trinidad & 5.5 Tobago

10259 520

17288225

59.3

TABLE 16 - PROJECTION

Iourist Arrivals in 1972

Avg. Iength of stay in 1972

(numberS (1)

(nightsl (2)

Annual compound growth of bednights, 1972-1977 (SN (3)

Antigua

72328

2 5

Dominica

14737

4

Grenada

37933

12

6.5

Montserrat

12529

10

6.5

St

Kitts-Nevis

16245

5

St

Lucia

42399

3 5

V:r.cent

16902

810

LDC TOTAL

213073

St

Tourist Bednights in 1977

210430

6 5

fia.ai.a

407806

8

Trinidad/Tobago

114550

5.5

MDC TOTAL

732786

TOTAL CAR/COM

945859

(5)

(6)

25

4.520

6 193

30

7.432

94916

20

1.179

1 898

25

2 373

623664

25

11 380

15 592

171660

25

3 132

15

163375

25

2.031

32.5

606123

30

4 452

217765i056

30

4

4 (8.5) 8 (10) 5.5 (5.5)

1664130 (2056685) 4793584 (52),42J00)V (5520 823410 (823410) 7281124 (8134295) 9406349 (10259520)

(3) (45)

Source As analysed Call (C) t x e3C (2)

(3)

Imputed to each island according to known price difierentials, supply, misc etc,

1.CC

HTIGH VALUE Tourism Ae rage lourism evenues Daily Revenues in 1977 Expenditure in 1977 (1972 price)min 1972 "1972 Prices) (U.S. $ (U.S. $ millions) ($) millions) (7) (8) (9)

247722

10

Source Source

Shankland/Cox - opun cit. Shankland/Cox and others.

LOW VALLI TouriSm Revenues in 1272 (U.S. $ millions)

($)

(number) (4)

(1) (2)

in

Average Daily Expenditure in 1972

2125225

Barbados

Notes

6.5

OF TOURISM REVENUES 1977

and Island sources

this report.

30

30

18.710

292

30

5 150

4.084

4

30

4 901

184

35

21 214

6533

35

7 622

18

30 750

56 776

41 034

49 924

30

97.873

25

15 751 154 658 185.408

j61 701) 143.808 IC SSI57 I7626; 20 585 (20.585) 214.317 (239 912) 271.093 (296.688)

67.402 35 35 30

(6) (7)

Island calculations where available, Col (4) x Cal (5)

(8)

Imputed supply,

(9)

Clo

kr

to each island according misc. etc.

(4) a C.l. (8)

58.245 71 984) 167.775 (;1183 5) 89 ) 24.702 (24 702) 250.722 (280.583) 318.124 (347.985) 1

otherwise Col. (4) x Co .

to known price differentialsa

(5)

Table 17A Cruise 3assengers1 Avg. daily2/ Mean" -la. Atua " axnandi tre

1968-72

1972

Proiections of Cruise Revenues for IDCs in 1977 under various assumptions Total cruise Total cruise revenues '72 revenues '72 "Mean" "Actual"

172 US

Axnual ratel' Total Total of rowth cruise cruise

112-77 (A),6

St. Lucia Dominica Grenada Montserrat

36,953 1,500_/ 49,918 1,215

St. Vincent 14,597 St. Kitts 5,191 Antigua

37,267 1,500_/ 94,060 1no66

10 10 10 10

369,530 15,000 499,180 12,151

11,418 4,672

10 10

145,970 51,910

10

31,628

63,784

IDG Tut,l

141,002

213,768

St. bAcia Dominica Grenada Montserrat St.Vincent St. Kitt, Antigu,

36,953 -

37,267 --1,500 94,o60 1,066 11,418 14,672 63,784

LDC Total N>tes:

1/

7

1,500/ 49,918 1.215 14,597 5,191 31.628 141,002

A,,it,-V .otlno----

316,280

637,840 2,137,680

30,000 998,360 214.300 291,940 103,820 632,560

745,340 -I 30,000 1,881,200 21.320 228,360 93,440 1,275,680

2,820,040

4,275,360

Cu

-

hfoh Do-

1tO,66 114,180 46,720

1,410,020

20 20 20 20 20 20

213,768

372,670 15,000 940,060

Total cruise

r e v e n u e s (B)t

"Meann "Actual"HMean"

Total cruise

1 9 77

Annual rate-/ of erowth

1972 - 77

"'Mean" "Actual"

12.8 12.8 12.8 12.8

545,132 599,526 674,392 680,123 24,158 24,158 27,375 27,375 803,9341513,976 911,003 171j,610 19,568 17,168 22,174. 19,454

18 1d 1d 1d

10 10

12.8 12.8

235,086 183,888 266,395 83,602 75,243 94,740

13 1d

10

12.8 50_93721027-2

208,378 85,264

577,211 1164,058

1

2,270,8523.41,208 273,290 3900,262

10 10 10 10 10 10

1.8 119-26 2,3 8,74_ 1360,246 12.8 48,315 48,315 54,750 54,750 12.8 1607,8693029,6911822,007 3433,190 12.8 39,135 34.336 414348 38.909 12.8 470,172 367,776 532,790 416,757 12.8 167,203 150,486 189,472 170,528 12.8 1018,7442054.4951154,422 2328,116 4,541,7026885,4775146,573

1 9 7 7

"Actual"

10 10 10 10

47

Total Total cruise revenue

7802,496

o45,396 852,580 34,316 34,316 1,142,004 2,150,632 27,796 2, 388

333,944 118,758

261,216 106,884

723,573 1,459,225 3,225,787 4,889,241

id 1d 1d 1 18

1d 1d

6

1, 90,791 1,705,159 68,633 68,633 2,28L,008 4,303,734 55,593 48,775 667,889 522,433 237,515 213,768 1,447,145 2.918,427 6,451,574 9,780,929

,o,,

10 %' growth under assumption A is an arbitrary estimate; 12.8% growth under assumption B is the annual rate of growth of cruise passengers for 1968-1972; 18% is assumed to be the maximum feasible growth rate.

F,urces: Bosic datat Shankland Cox opus cit. and Island sources.

Table 17B Cruise Passengers Avg. daily 'Mean" "Actual" ex enditure 68-72 1972 1972 US S

ProJections of Cruise Revenues for mDCs in 1977 under various assumptions

Total cruise Total cruise 2 revenues'7 revenues '72 '"Mean" "Actual"'

Annual (A)

Rate of Growth (compound) (B)% (C)% 1972 - 1977

(A) (A) (B) Total * Total Total Cruise Cruise Cruise Revenues Revenues Revenues "Actual", "Mean"

"Mean" Barbados

83,085

100,086

10

830,850

1,000,860

7.18/

10

830,850

Jaa.,ca

83,092

71,550

10

830,920

714,500o

6.4_./

10

830,920

10

7.8.-/

10

(B) Total Cruise Revenues

(C) Total Cruise Revenues

(C) Total Cruise Revenues

"Actual"

"Mean"

"Actual"

1,000,860 1,170,759 1,410,322 1,338,092 1,611,895 715,500 1,133,092

974,335 1,338,204 1,150,709

663,900 1,185,637

9u6,486 1,311,663 1,069,218

TrinidadJ

81,hU

66,390

'xDCT~t,t

Tobago

257,621

237,926

Barbados

83,085

10O,086

Jamaica

83,092

71,450

66.390

Trinidad/ Tobago MDC Total

NOTES:

FSurce-:

81 Ua, 257,621

237,926

814,440

663,900

2,576,210

2,379,260

20

1,661,700

2,001,720

7.1!/

20

1,661,840

1,h9, non

6.4-/

20

1,628.880

1.327,800

7.8_/

4,952,420

4,758,520

814,h0 2,476,210

2,379,260 3,489,588 3,361,143 3,987,959 3,831,822

10

1,661,700

2,001,720 2,341,518 2,820,64h 2,676,186

10

1,661,8i

10

1,,,38,880

1,327,800 2,371,275 1,932,972 2,623,328 2,138,435

4,952,520

4,758,520 6,978,977 6,702,286 7,975,922 7,663,655

0

1

.29 000 2,266,I.

/ Actual 1968-72 Growth Rate b/ Implicit growth rates needed to achieve peak 1969 cruise arrivals c!/ Column C is considered to be the maximum feasible growth rate, given the present volume of cruise traffic

Basic data rrom Shankland Cox opus cit.

and island sources.

1 928 670n2,676,

3,223,790

10 2I301

19

Table 18A--Tourism h Cruise !evenue5--Ptjectsons for 1977 for LDC's

(Million US$) A.

Cruise Revenues 7I LOW HIGH

Total Revenues II AVG. LOW HIGH

18.184 21.214 1.898 2.373 15.592 18.710 5.1501 4.292 6.533 7.622 4.084 4.901 6.193 7.432

0.600 0.024 1.511 0.020 0.235 o.o84 1.027

0.595 0.024 0.804 0.017 0.184 0.075 0.509

21.814 2.397 20.224 5.170 7.857 4.985 8.459

18.779 1.922 16.396 4.309 6.717 4.159 6.702

20.296 2.160 18.310 4.740 7.287 4.572 7.580

1.200 0.018 3.030 0.039 0.470 0.167 2.054

1.190 0.0 48 1.608 0.034 0.368 0.150 1.019

22.41h 2.421 21.740 5.189 8.092 5.068 9.486

1374 -. 1.946 17.200 4.326 6.vo0 4.234 7.212

20.894 2.184 19.470 4.758 7.496 4.651 8.349

56.776

3.504

2.208

70.906

58-984

64.945

7.008

4.117

74.410

61.193

67.802

0.6714 0.027 0.911 0.019 0.208 0.085 0.577

21.894 2.400 20.426 5.172 7.888 4.996 8.596

18.658 1.925 16.503 4.311 6.741 4.169 6.770

20.376 2.162 18.464 4.7142 7.314 4.582 7.683

1.360 0.055 3.433 0.044 0.533 0.189 2.328

1.349 0.055 1.822 0.039 0.417 0.171 1.154

22.574 2.128 22.143 5.194 8.155 5.090 9.760

19.533 1.753 17.41 4.331 6.950 1.255 7.347

21R)54 2.190 19.778 4.762 7.552 b.672

5.007

75.344

61.783

68.562

22.91) 2.4L2 23.011 5.206 8.290

19.815 1.767 17.876 4.341 7.055

21.391 2.204 20.LL 5 4.774 7.672 h.718

67.402

TOTAL

Assuming 12.8% growth rate for cruise visitors: St. Lucia Doinica .renada Montserrat St. Vincent St. Kitts-Nevis Antgua

21.2114 2.373 18.710 5.150 7.622 4.901 7.432 67.402

TOTAL C.

Total Revenues I AVG. LOW HIGH

Assuming 10% growth rate for cruise visitors: St. Lucia Dominica Grenada Montserrat St. Vincent St. Kitts-Nevis Antigua

B.

Cruise Revenues I LOW HIGH

Tourism Revenues LOW HIGH

Assuming 18% growth rate fuo Lucia Domenica Grenada Montserrat St. Viacent St.

St.

Kltt.-Nevi.

Antigua TOTAL Notes:

i)

ii) iii)

Source:

18.184 1.898 15.592 4.292 6.533 4.084 6.193 56.776

1

0.680 0.027 1.716 0.022 0.266 0.095 164 3.970

2.501

71.372

59-277

65.323

7.942

8.554

cruiae visitors;

21.214 2.373 18.710 5.150 7.622

18.184 1.898 15.592 4.292 6.533

0.853 0.034 2.151 0.028 0.334

0.845 0.034 1.142 0.024 0.261

22.067 2.407 20.861 5.178 7.956

18.993 1.932 16.7314 4.316 6.794

20.530 2.170 18.798 4.747 7.375

1.705 0.069 L.304 0.056 o.668

1.691 0.069 2.28L1 0.04j 0.522

L.901

L.oS4

0.118

0.107

5.019

4.191

4.605

0.238

0.214

5-139

4.29d

7.432

6.193

1.459

0.724

8.891

6.917

7.904

2.918

1.447

10.350

7.640

.99'5

66.129

9.580

6.276

77.360

63.052

70.205

67.402

56.776

4.977

3.137

72.379

59.877

"mean" and "actual" visiwtrs mr 1y12 The "HIGH" ("LOW")values are the higher (lower) of the values computed for cruise revenues using the Assumption I is basec on an average expenditure of US$10 per cruise visitor. visitor. cruse per US$20 of Assmpion !I is based on an, av erage expen.d Lure

Prevlous tables.

ds

b,se.

Table 18B

(US $ million) A.

A-suming

Tourism Revmnues Low2/ Highb/

0I growth in

BerbpdoF J3m,ic, Trinid'd/ T-bsgo TOTAL MTYs TOTAL LDCs "CARICOM

Cruise

Tourism & Cruise Revenues: Reveues I Y High

Projections for LDCs,

Total Revenues I Average Low

cruise arrivals for LDCs and no growth f-r

MLCs and CARICOM for 1977

Cruise Revenues II wowY High High-Y

Total Rever.ues Low

II Average

OCji;

71.984 183.897

49.924 143.808

1.001 0.831

0.831 0.711

72.985 50.755 184=728 lh52:'

24.702 280.583 67.402 317.985

20.585 214.317 56.776 271.093

0.814 2.6h6 3.504 6.150

0.661 2.209 2.208 4.417

25.516 21.24) 283.229 216.526 70.906 58.984 354.135 275.510

61.870 16J.625

2.002 1.662

1.662 1.429

73.986 185.559

51.586 145.237

62.786 165.398

23.382 249.877 64.945 314.822

1.629 5.293 7.008 12.301

1.328 4.419 4.417 8.836

26.331 285.876 74.410 360.286

21.913 218.736 61.193 279.929

24.122 252.306 67.802 320.108

9. Assuming 12.8% growth in cruise arrivals for LDCs and "implicit" growrh for MOCs: Brrb-d,' J-mric, Trinid,d/ TTbhg, TOTAL MOCs TOTAL LDCs " CARICOM

71.984 183.89(

49.924 143.808

1.410 1.133

73.394 51 .09,; 1.171 0.974 185.030 144.782

62.244 164.906

2.821 2.266

2.342 1.919

74.805 186.163

52.266 145.757

63.535 165.960

21.702 280.583 67.402 347.985

20.585 214.317 56.776 271.093

1.186 3.729 3.970 7.699

0.966 3.111 2.501 5.612

25.888 21.551 284.312 217.428 71-372 59.271 355.684 276.705

23.720 250.870 65.324 316.194

2.371 7.458 7.942 15.400

1.933 6.224 5.007 11.231

27.073 288.041 75.344 363.385

22.518 220.541 61.783 282.324

24.796 2514291 68.562 322.854

C A'-uming 18% growth in cruise arrivals for LltCs and 10% growth for MDOs: B'-rb'do JrmPIcr Trinid'd/ Tobrgo TOTAL MDCs TOTAL LDCs 11CARtICOM Note-:

F urce:

71.984 183.897

49.929 143.508

1.o12 1.338

1.338 1.151

73.596 51.267 185.235 141.959

62.432 165.097

3.221 2.676

2.676 2.301

75.208 186.573

52.605 146.109

63.906 166.341

21.702 280.583 67.402 347.985

20.585 214.317 56.776 271.093

1.312 4.262

1.069 3.558 3.137 6.695

26.012 21.654 284.843 217.880 72.379 59.877 357.222 277.757

23.833 251.362 66.129 317.491

2.623 8.523 9.580 18.103

2.138 7.115 6.276 13.391

27.325 289.106 77.360 366.466

22.723 221.437 63.052 284.48y

25.024 255.271 70.205 325.477

1.977 9.239

i) the High (Low) values are the higher (lower) of the values computed for tourism revenues and for cruise revenues. cruise visitor. ii) Assumption I is based on an average expenditure of us$S 10 per umption !I is based on an aver_-e expenditure of U$20 per rise visitor. ili) Previous tables

Number of Rooms under Construction and Current Investment in Hotels, Guest Houses & Cottages/Apts. to 1977

Table 19:

Investment: thousand US$

Rooms: number;

Guest House

Hotel

426 rooms $ 8,520

Antigua

rooms

-

8 rooms

Dominica

$ Grenada

-

- rooms

-

$ St. Kitts

St. Lucia

St. Vincent

44 rooms 440

$ rooms

$ _

-

$

$-~ $

- rooms $

$ 3,880

215

150 rooms $ 1,610

- rooms

rooms

$

-$-

$

40 rooms 400

$

50 rooms 600

$

40 rooms 400

$

40 rooms 400

rooms

- rooms

8 rooms

194 rooms

15 rooms

$

139 rooms $1,390

rooms

10 rooms

200

40

rooms

$ -

-

470 rooms $ 8,960

4 rooms

3 rooms

$ 15

160

11 rooms 220 $

Montserrat

$

$ -

Total

Cottage/Apt.

$ 40

$

-

202 rooms $ 3,920

Total LDCs

649 rooms $12,780

11 rooms $ 55

267 rooms $2,670

927 rooms $15,505

Barbados

100 rooms $ 2,000

- rooms $ -

300 rooms $3,000

400 rooms $ 5,000

2,140 rooms

- rooms

- rooms -

2,140 rooms

$

$

- rooms -

288 rooms $ 5,760

300 rooms 4(z ,sv nnn

2,828 rooms 4tcl can

Jamaica

$42,800 Trinidad/Tobago

Total MDCs

Total CATRICM

- rooms

288 rooms $ 5,760

$ -

- rooms

2,528 rooms 6cn con 9JUsJUU

e~ v

11 rooms

3,177 rooms

$ 55

$63,340

Note:

567 rooms-

$5,670

y.J.J

3,755 rooms

$69,065

Total investment is estimated by assuming the following average costs ner room currentlv urndier connstruct'ion: Hotel Guest House Cottage/Apt.

Source:

-.

$42,800

20,000

-

$

-

$ 5,000 $ 10,000

Rooms - Shankland Cox, opus cit. Investment - comparative Caribbean experience.

TlabLile 2ZU%:

TN

rect

Erpl-yue

tro

lncreases---

in Tourist Accommodation to 1977 Number of Rooms and of Employees

Hotel

Guest House

Cottage/Apt.

Total

426 rooms 426 empl.

- rooms - empl.

44 rooms 22 empl.

470 rooms 448 empl.

8 rooms 8 empl.

3 rooms 2 empl.

4 rooms 2 empl.

15 rooms 12 empl.

11 rooms 11 empl.

- rooms - empl.

139 rooms 70 empl.

150 rooms 81 empl.

- rooms - empl.

- rooms - empl.

- rooms - empl.

- rooms - empl.

St. Kitts

10 rooms 10 empl.

- rooms - empl.

40 rooms 20 empl.

50 rooms 30 empl.

St. Lucia

- rooms - empl.

- rooms - empl.

40 rooms 20 empl.

40 rooms 20 empl.

St. Vincent

194 rooms 194 empl.

8 rooms 4 empl.

- rooms - empl.

202 rooms 198 emnli

Total LDCs

649 rooms 649 empl.

11 rooms 6 empl.

267 rooms 134 empl.

927 ronms 789 empl.

Barbados

100 rooms 100 empl

- rooms

300 rooms 15O empnl.

400 rooms 250 empl=

Antigua

Dominica

Grenada

Montserrat

Jamainca

2j140 rooms 2,140 empl.

Trinidad/Tobago

~~

It -.-.-

-

rnnnmq

-

rnnms

2,140 rooms 2,140 empl.

- empl.

- empl.

288 rooms

- rooms -

- rooms - empl.

288 rooms

288 epl.m

empl.

288 empl.

- rooms

300 rooms

2,828 rooms

2,528 empl.

- empl.

150 empl.

2,678 empl.

3,177 rooms

11 rooms

567 rooms

3,755 rooms

3,177 empl.

6 empl.

2184 emp1

3,467 I emplt

Total CARICOM

(i)

mnl

2,528 rooms

Total MCGs

Note:

-

is

-assumed t1hat

~

~

~

the~147_11--n

~

empoye - -u -ai e -appl-y:

wil

ratiLU Wi-lhotel - 1:1; guest house - 0.5:1; cottage/apt. - 0.5:1. -~~~~-~~

-

LUW~

LLr,

jJ PAJ te

L ULIUL

(ii) Only existing rooms and those under construction in 1973 are included.

SVource:

SLiankIland

'ox, opus c-t.,

andu

coUL-parat'Lve Caribbean experience.

d4Jpply;

Table 21

Physical Size of CARICOM Islands

Island

Max.Length mi;les

_____

144-

Jariiica

Domiinica St. huciae Tobago St.V.incent

Orenadines Ba-bados Grenada ln+A

Max.Width m,iles 49

29

16

290

97

l)

238

26

7

18

11

&

150 166 120 inp

Minl

65

St. Kitts Ne0r s Montserrat

Area sg ,m, les

36 11

7

39