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Jamaica could face lukewarm winter season Tax noose threatens Caribbean tourism

Dennis Morrison

AP - An Air India plane is seen at Newark Liberty International Airport during a snow storm that caused thousands of flights to be cancelled in the Northeast, Sunday, December 26, 2010, in Newark, New Jersey.

Jamaica could face lukewarm winter season

Dennis Morrison, Contributor

Less extreme weather in the United States (US) north-east region, the largest single source of visitors to the island, could put a damper on the winter season, the most lucrative period for the local tourist industry.

Last year, the industry got a boost from severe weather that hit major cities in the region such as New York, which had its snowiest year on record. The long-range weather forecast is suggesting, however, that it is the mid-west region (Chicago) that could experience a brutally cold and snowy winter this year.

The less-than-favourable winter weather from the standpoint of our tourist industry comes at a time when the World Tourism Organisation (WTO) is predicting a slower rate of growth for international tourist arrivals this year. In its latest press release the WTO indicated that while tourist arrivals increased by 4.4 per cent in 2011, it is expecting growth of three to four per cent this year. After the strong rebound over the two-year period up to mid-2011, growth in international tourism is now being tempered by the slowdown in the pace of global economic recovery.

Jamaica's fortunes will continue to rest on the US market, which still accounts for three of every five stop-over visitors to the island, and on Canada, which has, in recent years, filled the gap arising from weak demand for travel in the US and Europe. Last year was a particularly challenging year in the US where economic uncertainty was heightened by political wrangling about budget cuts and the raising of the debt limit.

Towards the end of the year, there was a pickup in gross domestic product growth and significant increase in new jobs created which, if sustained, could have a positive effect on consumer confidence.

The US Federal Reserve has, however, revised its forecast for growth downwards for 2012.

mild recession forecast

The situation in Europe is more clearly negative with all the leading forecasters projecting that the region will experience a mild recession, although conditions in Germany continue to improve. The United Kingdom (UK), a major European source of visitors to Jamaica, is already experiencing negative growth, and consumers are hard-pressed as budget cuts and tax increases take effect. The Caribbean, in particular, is also being affected by increased air travel taxes, which are putting the region at a disadvantage to competing destinations in the United States, including Hawaii which is much farther from the UK than any Caribbean destination.

In the face of these economic pressures, a cold northern winter would have been a good shot in the arm for our tourist industry. Without this, it will take greater effort in marketing and promotion by the stakeholders individually, and heightened collaboration between them if the Jamaican industry is to come within the two to four per cent growth rate projected by the WTO for the Caribbean region as a whole this year.