Caribbean Tourism Inched Up in 2013

Despite the widespread economic downturn, the Caribbean tourism industry has survived, albeit not entirely unscathed. However, the region is once again showing an increase in arrivals and moderate growth across industry value.

Increasing investment in the hotel sector as well as in international transport means the region has also begun to see results as a number of projects under development come to fruition.

The report considers the impact of the continuing global economic uncertainty on the Caribbean tourism industry, and how the region's ongoing fiscal issues are affecting its tourism arrivals.

Following the decline of the financial services industry after the economic downturn hit in 2007, tourism has increased in importance to Caribbean economies. Although Cuba and Trinidad & Tobago have more diversified economies, the majority of the Caribbean islands are now primarily dependent on tourism as their major source of revenue.

However, the tourism industry is also struggling to expand given weak economic growth in its major source markets of Europe and North America and the Caribbean's relative expensiveness as a holiday destination. The region has recovered from its 2008-2010 slump, but growth is still slow in many of the economies.

The report is forecasting moderate growth across the region in 2013, Arrivals to most countries will grow by 2-3%, although we are forecasting particularly strong growth in the Cayman Islands, where arrivals will grow by 3.4%. Trinidad & Tobago is also forecast to grow by 4.3%, potentially making it the top-performing regional market in 2013.

Preliminary figures from the Caribbean Tourism Organization bear out our prognosis, with the Cayman Islands posting arrivals growth of 5.9% in the first seven months of the year. Other countries posting strong growth early in the year include Anguilla (6.6% between January and August); St Kitts and Nevis (6.2% between January and June) and Aruba (5.9% between January and August).