Signs point to rosier tourism outlook

‘Wait and see’ approach

There are good indicators that the local, regional and world tourism outlook is improving for the end of this year into next.

‘We certainly hope so,’ said Executive Director of the Cayman Islands Tourism Association Trina Christian.

Mrs. Christian noted that lots of data points to the economic slowdown beginning to ease.

‘There are signs pointing to things looking up,’ she said, referring to how earlier this month the Dow Jones Industrial average went higher than in the last year.

While the booking window is still very short, making it difficult to predict bookings, Ms Christian said, ‘Our hotels report that Christmas bookings look good.’

She added that group travel bookings for next year are still on the books and have not been cancelled.

‘These are good indicators,’ she said.

Regional, World Outlook

Both the regional and world tourism performance are expected to improve by next year.

At the recent Caribbean Hotel and Tourism Associations’ Small Hotel Retreat in the US Virgin Islands, Lindsay Culbreath, Director of Sales for Smith Travel Research predicted the fourth quarter of 2009 to be less bumpy. She foresees moderate improvement in 2010 and significant improvements in 2011.

According to the World Tourism Organisation, there is increasing confidence in 2010 recovery for the tourism sector.

‘As the latest economic data and prospects indicate that the world economy may be starting to emerge from its most severe recession of the post second world war period, in tourism too there are signs that confidence is returning and that demand is improving for both business and leisure travel,’ said the World Tourism Organisation’s secretary-general Taleb Rifai.

According to the organisation, economic conditions are expected to continue impacting tourism demand – at least in the short term. The organisation stated that as decline rates are anticipated to ease during the remainder of 2009, international tourism is forecast to decrease within a range of six per cent and four per cent this year. Growth for the full year is projected to be negative in all regions, except for Africa.

The UNWTO believes the contribution tourism can make to the ongoing global efforts to tackle the economic crisis include positioning tourism as a primary vehicle for job creation and economic recovery and the transformation to the green economy.

‘Long-term prospects remain positive if the sector is able to address its challenges in a co-ordinated and effective manner,’ said Mr. Rifai. ‘Today, world leaders are working together in ways that would have been unimaginable at any time in the past, to co-ordinate and collaborate on economy, climate response and the development agenda. The tourism sector should do the same on the road to recovery and towards a more sustainable industry,’ he added.

Locally, Ms Christian said that despite good indicators it really is a waiting game to see what happens with forthcoming business.

Consumer Confidence

‘Although the signs are that consumer confidence is returning, which is really great, we are waiting to see do people choose to travel because of this. We’re just not sure how long it will take for them to decide to travel again,’ Mrs. Christian said.

She said that it is unclear if the consumer behaviour of people being cautious, wanting a deal and evaluating things closely, will change, or if consumers’ attitudes may have changed permanently.

But another positive for the Cayman Islands is that family values and family travel are still important to people, she said.

Ms Culbreath indicated that it may take 10 years for rates to return to normal levels and other speakers at the Small Hotels Retreat warned that deep discounting will do more harm than good.

Ms Christian noted that in Cayman properties are looking to add more value, rather than lowering their high season rates too much. This is something the CITA is encouraging, she said. For instance, spa packages or dinners can be added to a customer’s rate to offer them more value.

Booking Window

Commenting on the short booking window, Ms Christian said that within the condos and villas sector for next February, March and April there are not a lot of bookings currently, but none of the managers seem alarmed. Having gone through last year they are familiar with this short booking window in this sector in which the norm would be for customers to book up to a year in advance.

‘They feel they will get the bookings but they are not seeing anything much on the books as yet for 2010,’ Ms Christian said.

The good news is that some local hotels are already booked out for Christmas.

International tourist arrivals worldwide are estimated to have declined by seven per cent in the period January to July 2009, compared to the same period last year.

With the exception of Africa, all regions recorded a decrease in arrivals for the first seven months of 2009: Europe, eight per cent; Asia and the Pacific, six per cent; The Americas, seven per cent; The Middle East, 13 per cent.

The Caribbean falls under the region The Americas and within the Caribbean, the Cayman Islands experienced a 13.4 per cent drop for its air arrivals and a 5.4 per cent drop in cruise arrivals for the first seven months of this year.

At the Small Hotels Retreat, the Caribbean Hotel and Tourism Association’s Director General and CEO Alec Sanguinetti, referring to the current economic uncertainty, said, ‘Tourism is a cyclical event. This is just another challenge we have to work our way through.’

According to Smith Travel Research data, statistics for January to August 2009 showed that demand for Caribbean hotel stays was down 6.3 per cent while supply has increased by 0.5 per cent. Hotel occupancy in the Caribbean is down 6.7 per cent in 2009, following a 1.9 per cent decline in 2008, which has led to a 17.3 per cent drop in average daily rates for 2009. Revenue per average room fell 22.9 per cent in 2009 after declining 9.9 per cent in 2008.