2008 Arrivals Slow
With most major Caribbean countries having reported 2008 results, the picture is generally gloomy. While some countries have experienced high growth, in general growth has been minimal or negative. Of the 16 that have yet reported full-year figures, only six reported growth, and only one of these growth of over 4.0%. The highest growth was registered in Cuba, which posted an unexpectedly strong figure of 9.1% growth, despite an unusually heavy hurricane season. In addition, Jamaica performed surprisingly strongly, with growth of 3.9%, despite ongoing concerns about rising levels of crime. Of those countries reporting declines in growth, Bermuda and Martinique suffered the greatest, with a contraction of 4.6%, followed by Grenada with 4.1%. The remaining eight posted growth levels of an average -2.0%. This represents a recovery from the first nine months of the year, when several countries were posting 8-10% declines in growth. With the final quarter being traditionally strong, given the Caribbean's attractiveness as a Christmas holiday destination, this was to be expected, and does not represent a reversal of the overall downwards trend. Given the ongoing economic slowdown, tourist arrivals will remain sluggish in 2009. Given the dependence of the Caribbean economies on tourism, this will have a significant effect on economic growth and job creation in the region. Focus On Cuba New proposals in the US legislature to lift the ban on Americans travelling to Cuba could have a major impact on the island's tourist industry. Cuba could then expect a major influx of visitors, as a rush of curious visitors take advantage of the island's relative proximity. Such a situation would create a major boost to tourism, notwithstanding the infrastructure investment required to accommodate such an increase in tourists. However, with US-Cuba antagonism heavily entrenched, Cuba is not making any assumptions, with the government stating that no more infrastructure investment will be made than is already planned. Cruise Sector Suffers The Caribbean cruise sector has traditionally been one of the strongest sectors in the industry. However, after experiencing high growth in 2007 - partly owing to the new routes created for the Cricket World Cup - the sector struggled in 2008. Despite a positive first half of the year, the second half was badly affected by the hurricane seasons, which forced several companies either to cancel cruises altogether or to miss out certain countries. Most countries therefore experienced declines in cruise arrivals, with a few notable exceptions. In particular, Aruba experienced growth of 15.4% year-on-year (y-o-y), while Martinique's arrivals grew by 21.5% and Dominica's by 9.4%. However, major contractions were more common, with arrivals in St Vincent and the Grenadines dropping by a dramatic 36.2% and those in Bermuda and Antigua and Barbuda falling by 19.1% and 13.7%, respectively. In part this may be the result of a statistical rebound from strong sector performance in 2007, but it also reflects the general downwards trend of the tourism industry. As such, we expect performance to be similarly depressed in 2009, with investors being particularly cautious around the August-November hurricane season.
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