May 2015 Financial News

2015 Shaping Up As Another Record Year For Tourism

May 18, 2015

A good winter tourism season and what early indicators suggest will be a strong summer should result in Jamaica realising another all-time record for arrivals - and possibly earnings from vacationers.

Jamaica Tourism Board (JTB) data shows that the number of stopover visitors totalled 590,000, or up by five per cent from year-earlier levels during the period from December 2014 to March 2015. What's more, MBJ Airports reported that international travellers passing through the country's tourism hub in April was up by 10 per cent.

Considering that there was significant restructuring of the hotel room stock last year, the growth appears substantial.

In 2014, a thousand rooms were brought on line when RIU opened its Jamaica Palace; Blue Diamond reopened Breezes Trelawny as Royalton Whitesands; Sagicor reopened Royal Decameron as Jewel Paradise Cove; and Azul Sensatori brought the Poincianna back into operations under the new brand.

The 500-room Hyatt Ziva in Rose Hall also opened in December, just in time for the winter, although Moon Palace, which took over the 700-room Sunset Jamaica Grande last year, missed this winter altogether.

Still, there should have been approximately 800, or nearly five per cent more rooms available in the cold months, when compared to the start of the season last year.

Cruise passenger arrivals were also up by 15 per cent this winter.

This was reflected in the Norwegian Cruise Line increasing the size of the ship it berths in Ocho Rios from the 2,400-passenger Pearl to the 4,200-passenger Epic. The growth in sea faring tourists also resulted from three cruise ships - the Louis Cristal, Thomson Dream and AIDA Bella - home porting in Montego Bay, which positively impacted stopover arrivals. Tourists would have to fly to Jamaica to board the sea vessels on which they stay for days at a time.

That helped push up stopover arrivals from the UK during the period December 2014 to March 2015 by 31 per cent over year-earlier levels to 64,000 persons. It didn't help reverse a decline in visitors from the rest of Europe - the number of long-stay travellers from outside the United Kingdom who crossed the Atlantic fell by 11 per cent, owing largely to a dramatic reduction in charter flights from Russia and France.

Stopover arrivals from Canada also fell by four per cent from year-earlier levels.

Tourism Minister Wykeham McNeill blamed the decline from the smallest of the three North American markets on a "tapering off" of phenomenal growth over the previous decade, as the Canadian economy slowed down.

On the other hand, the Caribbean saw nearly seven per cent more Canadian tourists overnighting this winter than in the 2014 season, according to preliminary statistics published by the Caribbean Tourism Organi-sation. That growth was almost entirely attributed to Cuba. In fact, the Spanish-speaking island essentially led the region with its double-digit growth. What's more, if it wasn't for the 15 per cent increase in arrivals from Europe to Cuba, the Caribbean wouldn't have reported the modest 0.3 per cent growth in the number of trans-Atlantic visitors during the cold months.

The acceleration in the pace of growth in arrivals to Cuba comes as the US announced relaxed travel restrictions to the socialist state. The country experienced average growth in stopover of less than four per cent during the past five years, but reported 12 per cent this winter, reflecting an increase from all its markets.

NO COMPARISON

Incidentally, Jamaica's tourism growth also does not match up with the other two major Spanish-speaking Caribbean destinations - Dominican Republic (the largest market across the archipelago) and Puerto Rico, which ranks at number four behind Jamaica in terms of international vacationers. Tourist arrivals to each of those countries grew by over five per cent each year, on average, since 2009, whereas Jamaica's figures grew at half the pace - approximately 2.6 per cent.

Looking forward, 1,600 rooms should be added to Jamaica's room stock over the next eighteen months. Moon Palace is pushing to open this summer following delays caused by worker unrest on its construction site and the Courtyard by Marriott Hotel in New Kingston is scheduled to commence operations in July.

"The summer is looking strong," said Nicola Madden Greig, president of the Jamaica Hotel and Tourist Association (JHTA) in a telephone interview with Sunday Business. "May has been very strong and it is typically a very soft month."

Still, local hotel operators tend to be more concerned about the Fall months - September through to November - when arrivals are seasonally at the lowest levels. A planned joint promotion between the JHTA and the JTB should help, according to Madden-Greig. The promotion will be announced in the coming weeks. It should provide a welcome boost as heavy advertising by the tourism ministry in segments of the US market (New York, Chicago and Philadelphia) from late October to mid-November last year seemed to help boost arrivals from the largest North American market by 9.5 per cent this winter.

What's more, a reduction in the air passenger duty charged to travellers out of the UK this month, is expected to have a positive impact on the tourism numbers. The adjustment to the travel tax should result in a £50 ($9,000) saving on ticket prices for UK nationals wishing to visit the Caribbean.

Also, airlines are increasing airlift to the country. This week, Vacation Express introduced flights from Hartsfield-Jackson International Airport to Sangster International Airport in Montego Bay, which should increase capacity out of Atlanta by six per cent.

Additionally, Southwest Air-lines will start daily flights from Houston on November 1. United Airlines, which currently services that route, historically ramps up the number of trips from Houston to daily flights during the summer months - more specifically, in June and July. However, the airline tends to cut back to once-a-week in the fall.

But with all that growth, where are the jobs?

The Statistical Institute of Jamaica's January 2015 labour force survey showed a 0.7 per cent increase in the number of persons employed to the hotel and restaurant industry, when compared to a year before. Put another way, that's 600 more jobs, compared to 28,000 more tourists, excluding cruise passengers.

Madden-Greig suggested employment would likely have been reflected in supporting services to the tourism trade, such as transportation, as hotels moved to fill unused capacity. Occupancy rates across the island stood at less than 70 per cent last year.

"Once you get over a certain occupancy you are going to see similar staff level," she told Sunday Business. "They may work a more occupied day than usual, but sales, reservation and other staff stays the same. So, it wouldn't necessarily translate into increased direct employment."

Indeed, the number of persons employed to the transport, storage and communication industry grew by 5,500, or 7.7 per cent year over year, according to Statin.

The Government announced that the 130-room Marriott in Kingston should provide approximately 430 new jobs when it opens this summer. Using that measure, Moon Palace should add at least 1,000 more jobs.

 

Source:
Camilo Thame
camilo.thame@gleanerjm.com
Jamaica Gleaner
Sunday May 17, 2015

http://jamaica-gleaner.com/article/business/20150517/2015-shaping-another-record-year-tourism