The trajectory of the Caribbean economy has been a “good news” story for a good while now. The latest thread in this positive narrative is the recent statistical report from the Caribbean Development Bank, estimating that the region’s gross domestic product grew by 0.6 percent last year, and forecasting 2 percent growth this year.
What is remarkable about last year isn’t the (relatively minor) amount of growth in the region – but that the region’s economy managed to grow at all, considering the devastating (and devastatingly expensive) impacts of Hurricanes Irma and Maria. Indeed, islands that suffered most from the storms, including the British Virgin Islands and Dominica, were among the few jurisdictions whose economies contracted rather than expanded last year. (As we in Cayman know all too well, the recovery period from a major hurricane will stretch far ahead into future months and years.)
The sustained growth in the region continues to parallel the economic performance of the Cayman Islands. The development bank estimates that Cayman’s GDP grew by 2.7 percent last year and will grow by 3.2 percent this year.
It isn’t exactly the rocket-like trajectory we have come to associate with the early heydays of the “Cayman Miracle,” but at this stage in our islands’ development, steady and predictable positive growth is a desirable pattern, particularly as our public and private sectors construct, enhance and expand Cayman’s infrastructure, in order to accommodate and facilitate future growth.
Not surprisingly, the growth in the Caribbean’s general economy is also reflected in data on tourism, one of the region’s most fundamental industries.
The Caribbean Tourism Organization recently announced record highs – again – in terms of visitor arrivals and expenditures for the region in 2017. Last year, an estimated 30.1 million people visited the Caribbean, spending US$37 billion. That marks eight years of consecutive growth for the region.
Amid this general buoyancy, the number of air arrivals in Cayman (more than 418,000) hit record levels in 2017 for the fourth consecutive year, while cruise arrivals grew to 1.73 million passengers. In January, Tourism Minister Moses Kirkconnell said officials expect cruise numbers to remain steady in 2018, but for air arrivals to increase by about 5 percent.
Similar optimism reigns across the region, driven largely by expectations of continued economic strength in the United States – which of course is the primary source of “customers” for Caribbean isles, including Cayman.
While some officials are inclined to champion local decisions and developments as “cause-and-effect” reasons for year-over-year success in Cayman’s tourism sector, we offer a slightly more nuanced perspective. Yes, we remain staunch proponents (even “cheerleaders”) of projects such as new hotels, the airport expansion and transportation enhancements, but we tend to view those efforts and investments as wise attempts to capitalize on demand that exists naturally within the greater tourism market, rather than as the genesis of that demand.
Like it or not – and believe us, we’re firmly in the “like” camp – Cayman’s financial wagon is hitched to the star of North America … that is the U.S., which fortunately is the world’s most powerful economic engine.
For the Caribbean and Cayman, the future growth potential for tourism is practically endless because what we lack in other natural resources is more than made up by our abundance of sunshine, sand and sea.
The basic truth upon which our tourism model is founded is this: People hate cold weather. And North America gets very, very cold.
Not everyone can escape from the cold permanently, but many can find temporary respite in our tropical climes.
With that asset as our foundational bedrock, Cayman must focus on honing the distinct advantages that differentiate us from our similarly warm and beautiful neighboring competitors – that is, ensuring that our islands are safe, clean and welcoming, both for residents and our honored guests.