Tourism in The Caribbean could be poised for some hard times within the next two years, based on trends with the U.S. and European currency predicted Sir Roland Sanders, a former diplomat to the Caribbean.
In a commentary appearing in Caribbean Net News Sir Roland pointed out that there is little time for the Caribbean to brace itself for the impact that such changes could have on the industry.
He said the boom in the industry right now was in the wake of disasters in areas which made the Caribbean more attractive as a tourist destination.
According to the former diplomat, “Over the last three years, Caribbean tourism has benefited from calamities in other parts of the world starting with the terrorist attacks in New York and Washington, now notoriously known as “9/11”, and ending, so far with the Asian tsunami last December.
“In the face of these calamities, the Caribbean became an attractive alternative to areas that were beset with wars as in the Middle-East, terrorist attacks as in Kenya and Bali, or fears of terrorist attacks.”
In addition, Sir Roland explained that a weaker U.S. dollar has been a factor in the number of European visitors to the Caribbean, especially areas where the dollar is pegged to the U.S. “An effective devaluation of the U.S. dollar at about 20 per cent has meant a similar devaluation of Caribbean currencies. The Caribbean became affordable to many who would otherwise not have contemplated it,” said Sir Roland in the commentary.
But it’s a situation that he predicted would not last beyond another two years. because the “U.S. economy simply cannot afford” a weak dollar.
“The U.S. government agencies will act to curb these developments before they get out of hand,” he said. “When this happens, the U.S. dollar will strengthen and the effective value in an exchange with Euros and the Pound will rise.”
He noted that Caribbean currencies pegged to the dollar would strengthen in sync with the U.S., suggesting that the region would again look less attractive or affordable to many travellers, particularly European travellers. Currency appreciation would bring additional pricing pressure to an already overpriced Caribbean tourism product, Sir Roland maintained.
“The dollar looks set to remain weak over the next year, although the U.S. Federal Reserve will take steps to increase interest rates given the fact that its Chairman, Mr Alan Greenspan, has stated that both the U.S. trade and budget deficits are unsustainable,” said Sir Roland.
The Caribbean should start thinking of ways to reposition itself to face the competition in the next two years Mr Sanders urged.
“Among these things are greater technological efficiencies in hotels, better training for staff to create more productivity, and better facilities to create profit centres,” Mr Sanders suggested.
Social problems such as crime also have to be addressed in order not to offset potential gains for tourism. “Government too have a small window to tackle some of the problems that have recently beset the region’s tourism. Among these are increasing crime, transportation arrangements for tourists, and decaying infrastructure, particularly roads and airports.”
By BARRY WILLIAMS, Nassau Guardian Staff Reporter
