Home' Trinidad and Tobago Guardian : June 21st 2015 Contents Tourism has always been
considered a potential
growth pole and an active
catalyst for economic
quently, for decades, suc-
administrations in T&T
have designed and published stacks of com-
prehensive tourism development plans. Unfor-
tunately, in the opinion of industry stake-
holders, notwithstanding the lip service, the
tourism sector has languished because it has
not been given priority attention.
Several indicators seem to support this view.
T&T still has fewer than 6,000 hotel rooms,
compared with 66,000 in the Dominican
Republic; 29,000 in Jamaica: 15,000 in the
Bahamas and 7,000 in Barbados.
Private sector investment in the hotel industry
has been noticeably scarce. Two of our three
largest hotels are state-owned and the third
changed into private hands only recently.
The share of the government budget allocated
to tourism is extremely low by regional stan-
dards. This is reflected in the poor state of the
infrastructure that supports our beaches and
our main tourist attractions and our relatively
low promotion budgets. As a result of the latter,
T&T ranks well behind our regional competitors
in the area of marketing and branding of the
Reflecting these factors, total visitor arrivals,
which peaked at a mere 460,000 in 2005, are
now below 400,000. This compares with 4.5
million for the Dominican Republic; 1.9 million
for Jamaica; 1.4 million in The Bahamas and
540,000 in Barbados.
T&T now accounts for just over one per
cent of total tourist arrivals to the region and
in terms of tourism revenues we have lost
ground to our regional competitors.
Against the background of this indifferent
performance, two questions arise: first, is the
perception that our tourism sector could be
an effective driver of economic diversification
really justified? And second, why have suc-
cessive administrations not seized on the oppor-
tunity to develop a more competitive tourism
Tourism and diversification
Throughout the world there are many exam-
ples of small developing countries (Mauritius
and Cyprus to name a few) that have used
their tourism sector to promote broad-based
economic growth and contribute to the objective
of economic diversification. These examples
highlight the many inherent advantages of
• The industry is highly labour intensive
and thus makes a significant contribution to
• It could create extensive linkages: in sectors
like construction, transportation, agriculture
and manufacturing and ,very importantly, it
stimulates small business development
• Tourism could be a effective spur to rural
• It could be an important source of foreign
Many unbiased commentators observe that
T&T has unusually rich and varied tourism
potential. As the economic centre of the region,
already we are hosts to a significant influx of
business visitors, who now comprise more
than one-half of total tourist arrivals. We have
also been quietly building a reputation as a
desirable location for conventions and exhi-
One of our obvious and much cited selling
points is our ethnic diversity, which makes our
cultural events and historic sites unique oppor-
tunities for heritage tourism.
Our Pitch Lake, our bird sanctuary and the
nesting grounds for the leather back turtle
present a solid platform for an interesting eco-
And then there is our calypso and steelband
for which we have achieved international
acclaim, but which have still not been effectively
incorporated into a year-round tourist prod-
Moreover, as a twin-island state, we are
twice blessed, with Tobago as a semi-rustic
idyllic unspoilt retreat; with its promotional
claim of being " clean, green, safe and serene."
But why hasn t it happened?
Like in oil-producing countries T&T has
not effectively implemented its tourism devel-
opment plans because, up to now, there has
not been an urgent necessity.
For the most part, the energy sector revenues
have funded large government budgets, which,
in turn, have facilitated robust economic growth
and employment creation.
Accordingly, tourism development---with its
attendant risks---has never been accorded the
sufficient priority. In fact, some analysts argue
that our energy-based development model has
presented challenges for tourism development
in several ways.
First, expansionary demand management
policies have led to some overvaluation of the
real exchange rate, which has negatively affected
the competitiveness of the tourism sector.
Second, public sector employment pro-
grammes have set a floor for real wages for
unskilled labour, which has made work in the
tourism sector employment unattractive. This,
in part, explains the serious labour shortages
faced by many hotels in Tobago.
Third, we seem to have developed an ambiva-
lent attitude toward tourism, which many
experts attribute to our oil wealth and a lingering
colonial legacy, whereby we confuse quality
service with servitude.
Meanwhile over the past decade or so, the
tourism industry has become extremely com-
petitive, both globally as well as regionally,
with the opening up of the Cuban market.
More importantly, with the proliferation of
Internet technology, market power has shifted
from producers to consumers, who have
become more knowledgeable and more selec-
The volatility of oil prices is now providing
the impetus for several Middle Eastern oil pro-
ducers, with significant oil and gas reserves,
to intensify diversification efforts, in many
cases through tourism development.
As discussed in an earlier article, economic
diversification is even more urgent for T&T
since the adverse supply/demand dynamics in
global oil and gas markets are further compli-
cated by domestic supply uncertainties.
Our challenge is therefore to maximise our
tourism potential so that the sector substantially
increases its contribution to the diversification
Many industry stakeholders are adamant
that tourism still has great potential in T&T.
They note that international tourism has record-
ed phenomenal growth over the past several
decades, far exceeding that of global GDP and
they insist that the considerable natural endow-
ments and other attractions, noted above con-
stitute an excellent platform for increasing
tourism s contribution to diversification.
What is needed, they argue, is for us to
achieve our objectives, seize some unique
opportunities currently within our grasp and
address some of the policy shortcomings that
have limited our progress.
finance and tourism
The experience of Singapore, Mauritius and
the Bahamas, among others, demonstrates that
international finance and tourism create syn-
ergies that could be exploited to the mutual
benefit of both sectors.
With our inherent advantages for tourism,
the prospects for an expanded international
financial centre, described in the previous arti-
cle, could provide and unprecedented oppor-
tunity for us also to enhance our tourism thrust.
The immediate impact would be on business
tourism, which is already becoming a growth
industry. From there, with the appropriate
investments and the right policies the full
potential of T&T s tourist sector could be
It is envisaged that the driving force of the
expanded international financial centre would
come from the Chinese state-owned devel-
opment banks. However, they are expected to
lure other international banks also interested
in servicing the Latin American market.
As it happens China is now the world s
fastest growing tourism source and in 2012
became the world s largest tourism spender.
In official discussions with Caribbean leaders,
China emphasised its willingness to cooperate
with the Caribbean in tourism development.
A tangible demonstration of this intention has
been provided by:
The China Development Bank s financing
of the largest ever tourism project in the
Bahamas: i) the Baha Mar project which cost
an estimated US$ 3.5 billion and
ii) Chinese investors have recently launched
tourism resort projects amounting to US$ 2
billion each in Grenada and in Antigua and
A new China-Caribbean
According to Chinese authorities, their strat-
egy is to develop strong tourism links between
China and main tourism centres in the
Caribbean: the Bahamas, Jamaica, Antigua and
Barbuda and T&T. This model is consistent
with our National Tourism Policy, which sees
the development of our tourism sector taking
place "in the context of strong cooperation
with other Caribbean states."
If the examples of the Bahamas, Cayman
and the Turks and Caicos are a guide, a spill-
off from the centre could be increased visitor
arrivals from our traditional markets (the Unites
States, Canada and Europe as well as from
Latin America, which is currently an untapped
tourist source market.
However, in order to benefit optimally from
this impending value-proposition, T&T would
need to "raise its game" as a tourism desti-
Below are some of the major initiatives that
should be introduced in order to accelerate the
development of our tourism sector so that it
could make a greater contribution to our or
Most of these have been proposed at one
time or another but have not been implemented
and thus merit repetition:
• Upgrade to international standards our
major tourism infrastructure; most notably the
ANR Robinson International Airport; the Cruise
Ship Terminal and the facilities associated with
our major beaches and eco-tourism sites.
• Design a new comprehensive and consistent
tourism strategy that recognises and addresses
the different development requirements of
Trinidad and of Tobago.
• Upgrade the hotel stock to include another
four/five star hotel in Trinidad and in Tobago,
along with an international convention cen-
• Integrate, in an innovative way, our steel-
band, calypso, other national cultural and artis-
tic expressions in our year-round tourism
• Increase air-links to Trinidad and arrange
for more direct air-links to Tobago.
• Review and simplify the current fractious
institutional arrangements (involving the Min-
istry of Tourism, the Tourism Development
Authority and the Tobago House of Assembly)
for the development and promotion of tourism
and ensure that the responsible agencies are
• Integrate local authorities and the popu-
lation, at large, in an aggressive tourism thrust.
• Initiate an education programme, targeted
to instilling a more positive national attitude
• Given our energy sector uncertainties we
need to exploit our other sectors of comparative
advantage and tourism certainly is one of those.
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt JUNE 21 • 2015
Tourism: Diversification pillar No 2
Ewart S Williams
Richard P Young
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