Overview:

I am going to discuss, in greater detail, the Caribbean tourism performance in 2016 and what to expect in 2017.

2016 marked another record-setting year as for the first time in our history we received over 29 million arrivals. This is also the 7th consecutive year of growth and our estimated 4.2% increase in tourism trips is the 3rd consecutive year above the global growth rate.

Moreover, the average annual growth rate over the last 7 years slightly exceeded the average annual global growth rate of international trips. The performance in 2016 was primarily supported by sustained economic growth in the US, our main source market, and relatively low oil prices.

Following an increase in the Caribbean market share of global visits in 2015, rising by 0.1 percentage points, it remained steady at 2.4% in 2016.

Nevertheless, negative events such as a weak Canadian dollar and the most active hurricane season since 2012, especially in October, no doubt contributed to preventing our region from reaching the coveted target of 30 million arrivals.

Among the destinations, tourist arrivals showed uneven growth. Of the 28 destinations reporting data for varying periods between January and December, 22 recorded increases ranging from quite modest to a robust 17.5% (the Turks & Caicos Islands), while the remaining six destinations experienced declines. Besides Turks and Caicos Islands, 4 countries, Belize, Cuba, Guyana, and Bermuda reported double digit growth rates.

The contributing factors to these performances included greater air access from the source markets to the region and the realization of significant investments to enhance infrastructure (airport redevelopment) and product (hotels).

With the exception of the Dutch Caribbean[1] (-5.6%), the major Caribbean sub-regions reported healthy growth.

The Other Caribbean[2] countries' market, which accounts for almost half of all arrivals to the region, recorded the fastest growth rate (7.4%) in 2016.

The Commonwealth Caribbean[3] and French Caribbean[4] grew by 4.1% and 4.2%, respectively.

Market Trends
A further look into the performance of our major source markets reveals that demand for Caribbean vacations rose in all of them, except Canada, which fell by 3.4%. A weak currency and sluggish first half economic output contributed to the decline in Canadian trips to the Caribbean. More than 70% of the reporting destinations reported decreases in arrivals from this market. Consequently, Canadian market share fell to 11.3%.

There were over 14.6 million U.S. visits to the region, 3.5% more than the previous year. This performance was attributed to solid economic growth, low unemployment rate and high consumer confidence in the US.

In particular, seven destinations recorded double-digit increases within their reporting periods. This group includes Belize, the Turks & Caicos Islands, Bermuda, Antigua & Barbuda, Barbados, Grenada and Montserrat, while declines were recorded in six destinations.

Arrivals from the European market totaled 5.6 million and improved by an estimated 11.4%, the strongest growth among the main markets, in spite of terrorist attacks in some countries, the Brexit referendum and mixed economic outcomes across continental Europe. In total, 72% of the reporting destinations registered increases in arrivals from this market. The top performing destinations, which registered double-digit increases, were the Turks & Caicos Islands, St. Maarten, Guyana and Anguilla.

Caribbean intra-regional travel broke another record in 2016, as arrivals rose by 3.6% to register just over 1.7 million trips, the second consecutive year of growth. Robust double-digit growth was experienced in Guyana, St. Vincent & the Grenadines and the Turks & Caicos Islands.

The region received about 11% fewer tourist arrivals from South America in 2016 compared to 2015.

Hotel Trends
The improvement in arrivals to the Caribbean was not reflected in improved hotel performance. According to Smith Travel Research[5], the primary revenue metrics were slightly down.

The average daily rate (ADR) fell by less than a dollar to US$ 201.50 and revenue per available room contracted by 2.6% to US$ 134.48 while occupancy fell by 1.6 percentage points to 66.7%. This outcome reflects the rise of the sharing economy and additional hotel room stock.

However, it is important to note that the hotel revenue indicators are still above the performances recorded between 2012 and 2014.

Cruise Trends
2016 was also a record breaking year for Caribbean cruising, as, cruise passenger arrivals to the region grew by about 1.3% to reach 26.3 million, in line with expectations at the beginning of 2016.

Larger ships, port enhancements and new destinations on the Caribbean cruise itineraries helped to increase the attractiveness of Caribbean cruise holidays.

Overall, only 48% of the reporting destinations registered growth with the best performances occurring in the Dominican Republic, the British Virgin Islands and Grenada, which all grew by double digits, while Belize became the eighth destination to record over one million cruise passenger visits this year.

In total, the Caribbean received 33.7% of all cruise deployments in 2016.

Visitor expenditure
Consistent with increases in stay-over and cruise visits, total visitor expenditure is estimated to have increased by approximately 3.5% to reach US$35.5 billion.

Outlook
2016 saw the election of a new Republican Administration in the United States and the success of a referendum which mandates that the United Kingdom withdraw from the European Union. Both these events raise the level of global uncertainty, which could impact the performance of tourism in 2017 and beyond.

Cuba was the destination that offered the greatest growth potential. However, at the end of 2016, several US-based airlines, citing reduced demand, announced they were cutting some of the promised capacity for 2017 to the destination.

Altogether, we expect that tourist arrivals to the region will grow at a slower rate of between 2.5 and 3.5% in 2017.

Further expansion of the cruise industry is expected in 2017, as 26 new vessels with a combined capacity of over 30 thousand passengers are expected to sail from the shipyards. The anticipated rise in cruise passenger arrivals to the region is projected to be between 1.5% and 2.5%.

[1] Aruba, Bonaire, Curacao, Saba, St Eustatius, St Maarten.
[2] Cancun, Cozumel, Cuba, Dom Republic, Haiti, Suriname
[3] OECS + Bahamas, Barbados, Belize, Bermuda, Cayman Islands, Guyana, Jamaica, Trinidad & Tobago, Turks & Caicos Islands.
[4] Guadeloupe and Martinique
[5] a U.S. company that tracks supply and demand data for the hotel industry and provide valuable market share analysis for international, regional hotel chains and independent hotels

About The Caribbean Tourism Organization (CTO)

The Caribbean Tourism Organization (CTO), with headquarters in Barbados, offices in New York and London and representation in Canada, is the Caribbean's tourism development agency comprising membership of the region's finest countries and territories including Dutch, English, French and Spanish-speaking, as well as a myriad of private sector allied members. The CTO's vision is to position the Caribbean as the most desirable, year-round, warm weather destination, and its purpose is Leading Sustainable Tourism - One Sea, One Voice, One Caribbean.

Among the benefits to its members the organization provides specialized support and technical assistance in sustainable tourism development, marketing, communications, advocacy, human resource development, event planning & execution and research & information technology.

Johnson JohnRose
CTO
(246) 427-5242
Caribbean Tourism Organization (CTO)

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