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"Strategic Objectives of the Caribbean in Tourism Development" Speech by Simón B. Suárez, Dominican Hotelier and President, Caribbean Hotel Association

 
Foreign and Commonwealth Office of the United Kingdom
Caribbean Tourism Policy Workshop
6 November 2003

The Honorable Bill Rammell, Minister in charge of relations of the United Kingdom with the Caribbean; the Honorable Manzoor Nadir, Minister of Trade, Industry and Commerce of Guyana; the Honorable Obediah Wilchcombe, Minister of Tourism of the Bahamas and Chairman of the Caribbean Tourism Organization; Ministers of Government; colleagues and friends,

On behalf of the Caribbean Hotel Association (CHA), the 800 odd hotel members, 750 allied members and 35 National Hotel Associations in the Greater Caribbean that we represent, we are honored to have been invited to be a part of this policy workshop on tourism.  We understand this to be the first workshop of its kind mounted by any EU government and we compliment the organizers for bringing together so many stakeholders from both private and public sectors to discuss this critical aspect of the Caribbean's economic future and stability. 

We hope to be able to demonstrate, along with our public sector partners, the immediate and future economic importance of tourism as, in many cases, the only means of achieving the necessary economic growth for the continued existence and future prosperity of the region.   The Caribbean Hotel Association will persist in representing its ability and willingness to act as a responsible partner for the sustainable development of tourism, the most important industry for the majority of Caribbean economies.  The assistance and decided co-operation of the Government of the United Kingdom and the European Commission will be critical to help us protect our tourism environment, to encourage our efforts in the development of the region's human resources and to attract investment to the region.  These are areas of development where CHA has been active and effective, either through the Caribbean Alliance for Sustainable Tourism (CAST), the Caribbean Credentialing program or through the annual investment conference, which has now attracted the interest of Proinvest, the EU's investment promotion agency under the Cotonou Agreement.

Our regional marketing initiatives, albeit modest, are evidence of our commitment to play a leading role in ensuring sustainability and prosperity for tourism and the communities of the Caribbean and its people.

The opportunities for achieving this challenge are great, but will require the concerted effort of all parties  - governments, the private sector and international donors - to work together in a responsible and coordinated manner.  The very future of tourism depends on us making this a reality. We need to ensure that, as with sugar and bananas in the past, tourism is at the top of every political agenda in the future when it comes to discussions between Governments and multilateral agencies.

We recognize that from a donor and public policy perspective, working with tourism is not an easy proposition. The sector's diversity and relatively high level of foreign ownership complicates tourism planning at the national and regional levels, as well as donor interventions in support of sustainable tourism development. Tourism's crosscutting nature also means that trade negotiations in a whole range of goods and services sectors will have an impact on the industry. But the sectors complexity should not mean that our industry is relegated to the bottom of the policy agenda just because it is viewed as being "too difficult". Tourism cannot be ignored. The industry's impact on the lives and welfare of so many Caribbean citizens is far too great for that. The opportunities for our trading partners outside of the Caribbean are also a reason to proactively develop tourism. 

This seminar's background paper reminds us of the fundamental importance of tourism for the Region and for the various economies within it.   The travel & tourism sector contributes more to the GDP of the Caribbean than the industry contributes proportionally to any other country or region of the world

The industry is currently expected to increase in the next decade at an annualized rate of 5.5% in total travel and tourism demand.  This should take the region from a total demand of US$ 34.6 billion to US$ 78.4 billion.  Direct and indirect employment generated by the industry should grow at 4.7% per annum and take us from 1.8 million jobs in 2003 to 2.9 million jobs over the next decade.  This is the potential growth of our industry as projected by the World Travel and Tourism Council.  It is incumbent upon us with the invaluable help from our friends and partners across the Atlantic, to achieve this potential.

Whilst these figures may seem impressive, the Caribbean tourism sector has severe challenges. CHA welcomes the increased engagement of the United Kingdom and the European Commission in searching for viable solutions to the various challenges we face. 

Allow me to highlight some of these challenges from a private sector perspective. The high cost of utilities, operating costs, airlift and attracting investment, challenge the very survival of the Caribbean Tourism product in an increasingly competitive global tourism market place.

It is no secret that many Caribbean destinations are now regarded as high cost destinations. As the President of the Caribbean Development Bank (CDB) recently stated, "To put it starkly, CARICOM destinations are pricing themselves out of the market". CHA proposes that government and the private sector - with the support of our partners here  - must urgently look at ways of reducing the utility costs for the regional tourism sector.

Creating a climate that provides an acceptable return on investment is also critical to the future of Caribbean tourism. A fresh look at how the industry is taxed would be a necessary part of the equation.  CHA therefore would like to propose a major review of tourism taxation in the Caribbean, particularly to take account of our industry's competitiveness compared to other destinations and to cruise tourism.  This review must be based on the principle that tourism services are an export industry.

Another element that undermines return on investment in the region is the inadequate availability of capital resources.  CHA is on record in proposing the establishment of a Tourism Investment Fund to harness the capital resources of the region, lower the costs of funds for development projects and act as a conduit for extra-regional resources.  We would like that our European partners to join us in analyzing the feasibility of this venture and in launching the Fund if it is to be found a feasible endeavour.

The issue of cruise tourism and its relationship to land based tourism is also of significance. While the recent stellar growth of cruise tourism in the Caribbean is welcome, CHA does not believe that this should be at the expense of the land-based tourism sector. We therefore fully support the current efforts of Caribbean governments to impose a regional and uniform US$20 head tax on arriving cruise passengers. This will go some way to addressing the competitive imbalance that exists between the cruise and land-based tourism sectors.  It is CHA's position that the funds generated should be directed to the regional marketing campaign that all destinations and all players, will benefit from.  The application of this uniform levy must be coupled with measures to improve the integration of the cruise industry through a regional cruise policy.

Of particular significance to our association is the very survival of the small indigenous tourism sector.  Over 65% of our members operate small hotels and businesses that find it increasingly difficult to operate in the current climate of mergers and vertical integration. It seems that the business strategy of the ever-decreasing number of international tour operators is to control through ownership of every element of the tourism product distribution chain, from the means to market the product in Europe, the airline, the hotel in the destination and also the local ancillary services. The danger of this is that tourism becomes a closed shop with limited participation of Caribbean companies in the tourism experience. To respond to this, CHA's smaller members need help in the enhancement of their product and its marketing, and in how they can more effectively manage their businesses. There are many others who are not affiliated to any national or regional entity and therefore have difficulty in expressing their views in a coordinated way.  Control of un competitive market practices in the countries of origin is also necessary, to diminish this effect

We understand the many responsibilities that Caribbean governments face in balancing the books and responding to the many challenges they face in serving the social and economic needs that face them. We do however; on occasions wonder why it is that so little attention is paid to the many opportunities that a vibrant and successful tourism industry could bring.  Perhaps our industry has not done a very good job in communicating its importance and its relevance; perhaps it is the lack of credible and valid research to back our arguments.  Greater recognition and understanding by all constituents of the economic impact of tourism would be a critical first step in indicating its true value as the economic engine of growth and sustainability for the majority of Caribbean economies.  CHA, with the support of its industry partners is currently working with the World Travel & Tourism Council (WTTC) to complete an economic impact study individually and collectively on 27 Caribbean countries.  We believe this effort will contribute to the necessary recognition of the industry.  The enhancement of our capacity to generate more in depth   research primarily focused on improving the competitiveness of the sector is a high priority goal for us.  This enhanced capability, along with the immensely valuable research undertaken by CTO will help us all to better understand the tourism sector and to make the necessary decisions in ensuring a successful and sustainable industry.

In spite of the fact that for the greater majority of Caribbean economies, tourism is the engine that drives them and is the major provider of jobs, the economic importance of tourism has been underestimated in terms of the important linkages that can be exploited with other economic sectors that are facing challenges within the region.  One of the ways to begin addressing this fault is by establishing throughout the Caribbean the WTTC developed system of Tourism Satellite Accounting.

Whilst we do our best to make sense of the complexities and importance of bilateral and multilateral trade negotiations, we hope that the introduction of a CARICOM single market in 2005 will help Caribbean businesses to offer more competitive and efficient goods and services to the Caribbean tourism sector. , This will be an important step.   The enhanced recognition of tourism within the scope of trade negotiations will lead or region to establish a more clearly articulated definition of tourism.

It is difficult in a short introduction, to represent all views and issues, and my colleagues will elaborate on other matters as we move forward.

Once again, my colleagues in the private sector and I thank the Government of the United Kingdom for the opportunity to take part in this most important meeting and assure you of our commitment to work with all parties to position tourism as a vibrant, successful and sustainable industry which will create jobs, wealth and prosperity for all Caribbean communities.
 
 

Simón Suárez has been related to the development of the Dominican Republicís tourist industry from the beginning of his professional career in 1974.  He is currently Vice President for Development of Coral Hotels and Resorts, S. A, a hotel management and development company with properties in various parts of the Dominican Republic.

Until recently, he was President of Unión Hotelera Dominicana, S. A., a hotel investment corporation with interests in the vacation ownership business that owns the Villas Doradas Beach Resort in Playa Dorada, Puerto Plata.  Since 1988 and until 1997, Mr. Suárez was President of Occidental Hotelsí local operating company, Occidental Hoteles Dominicana, S. A.  Under his tenure, Occidental managed twelve hotel properties in the Dominican Republic with more than 2,500 rooms.

Mr. Suárez serves as President of the Dominican Tourism Promotion Council, a not for profit organization that channels privately generated funds into tourism promotion.  He is also vice-president of the National Hotel and Restaurants Association of the Dominican Republic and Regional Vice President of the Caribbean Hotel Association (CHA).

Mr. Suárez holds a Bachelorís degree in Economics from Guilford College in Greensboro, North Carolina and a Masterís degree also in Economics from The American University in Washington, D. C.


 
Contact:
Lorraine J. Ortiz-Valcárcel
787.725.9139 
Lortiz@caribbeanhotels.org
Also See: Berthia Parle, general manager of Bay Gardens Hotel in St. Lucia Voted CHA President Elect and Recognized as the 2003 Caribbean Hotelier of the Year / June 2003
Caribbean Hotel Association, Formed in 1962, Re-examining its Goals, Products and Services / Aug 2003


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