Tourist Industry Update - 2013

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Tourist Industry Update - 2013

1. World Performance

Despite a world economy which was described by the International Monetary Fund (IMF) as being in “low-gear” global stay-over arrivals expanded by 5% in 2013 to a record breaking total of 1.087 billion. The World Tourism Organization (UNWTO) reported that in absolute terms 52 million more international tourists travelled around the world in 2013. Additionally, UNWTO stated that arrivals continued to grow faster than the expected rate of 3.8%[1], with growth of arrivals to emerging economies[2] outpacing that of advanced economies[3]. All regions contributed positively to the overall performance with noteworthy performances being recorded in Asia and the Pacific (6.0%), Africa (5.6%) and Europe (5.4%), all of which attained growth levels higher than the global average. The Americas and more-so the Caribbean[4] continued to struggle to maintain significant growth levels. The Caribbean was the third fastest growing region for 2012 but only outperformed the volatile Middle East in 2013. See table 1.1 below for more details.

Table 1.1: Outlook for International Tourist Arrivals
2009 / 2010 / 2011 / 2012 / 2013
Real
Full Year, Change
World / -3.9% / 6.5% / 4.9% / 4.0% / 5.0%
Europe / -5.0% / 3.1% / 6.4% / 3.4% / 5.4%
Asia and the Pacific / -1.6% / 13.2% / 6.6% / 6.8% / 6.0%
Americas / -4.7% / 6.6% / 3.6% / 4.5% / 3.6%
Caribbean / -4.7% / 1.6% / 2.7% / 4.9% / 1.8%
Africa / 3.4% / 9.3% / -0.5% / 6.9% / 5.6%
Middle East / -5.1% / 11.6% / -6.1% / -5.2% / 0.3%
Sources: UNWTO, CTO

2. Caribbean Performance

2.1. Stay-over (Tourist) Arrivals

Based on the latest information provided by CTO’s member countries, the Caribbean recorded modest growth in 2013. The mixed performances among the destinations resulted in an estimated 25.1 million tourists visiting the region, which was 1.8% (446.0 thousand) more than the revised 24.6 million of 2012. The Caribbean region continued to be adversely affected by relatively weak economic conditions which persist in its key markets. However, double digit growth in the South American market was recorded, reflecting intense focus on attracting tourists from emerging markets. Nevertheless, the momentum which was generated over the previous two years has been significantly reduced, as month-over-month changes in total stay-over arrivals were moderate.

Growth in arrivals during the winter season[5] of 2013 was slight (+0.7%), noteworthy growth recorded was only during March. Historically, March is the month in which the most tourists arrive. The performance in 2013 was even more significant as the 2.8 million tourists recorded then were the highest number at any point in time. The early Easter celebrations would have fortified the arrivals in March and overshadowed April’s number. With the exception of July and September which were flat, stop-over arrivals to the region grew in each month of the summer season (May-Dec). The best performances during this period were recorded in May (4.7%), November (4.5%), August (3.8%) and October (3.5%). December is forecast to increase by 1.3%. Collectively, arrivals rose by 2.5% during the summer season.

Of the 26 Caribbean destinations submitting data to CTO for 2013, 18 reported increases in tourist arrivals. Only Guyana, Haiti and Montserrat managed to record double-digit increases of 11.6%, 20.2% and 37.9% respectively albeit from relatively low levels. Appreciable growth, in excess of 5%, was realized in Aruba, Belize, and Cayman Islands and the twelve (12) other countries with improved levels of tourist arrivals grew by less than 5%. Fewer tourists visited eight (8) destinations during 2013. This group included Cuba (-0.5%), the Bahamas (-5.3%) and Barbados (-5.5%). Added to these were smaller destinations which depend largely on intra-regional travel and/or visitors from the United Kingdom. (See appendix for more details).

Table 2.1.1: Tourist Arrivals to the Caribbean by Sub-region (000s)
SUB-REGION / 2013e / 2012e / % CH
COMMONWEALTH CARIBBEAN / 6,926.2 / 6,959.8 / -0.5
OECS COUNTRIES / 1,341.3 / 1,340.6 / 0.1
OTHER C’WLTH COUNTRIES / 5,583.9 / 5,619.2 / -0.6
DUTCH CARIBBEAN / 1,972.2 / 1,880.7 / 4.9
FRENCH CARIBBEAN / 1,305.2 / 1,312.6 / -0.6
US TERRITORIES / 3,916.7 / 3,776.0 / 3.7
OTHER CARIBBEAN COUNTRIES / 10,891.1 / 10,635.2 / 2.4
TOTAL CARIBBEAN / 25,010.3 / 24,564.3 / 1.8
of which CARICOM / 6,326.5 / 6,313.0 / 0.2
Note: Imputed from data on international travel to member countries.
Source: CTO Member Countries and CTO estimates.
Table 2.1.2: Tourist Arrivals to the Caribbean by Main Market
('000)
MARKETS / 2009 / 2010 / 2011 / 2012 / 2013e / %ch 13/12
Total Arrivals / 22,426.5 / 22,790.1 / 23,407.0 / 24,564.3 / 25,010.3 / 1.8
United States / 11,278.1 / 11,305.4 / 11,404.2 / 11,975.9 / 12,323.1 / 2.9
Canada / 2,558.9 / 2,677.0 / 2,865.0 / 3,063.5 / 3,085.9 / 0.7
Europe / 4,916.2 / 4,857.0 / 4,962.8 / 4,916.5 / 4,734.3 / -3.7
Caribbean / 1,457.9 / 1,487.0 / 1,584.4 / 1,562.8 / 1,595.2 / 2.1
South America / 858.9 / 898.2 / 1,131.6 / 1,289.6 / 1,456.9 / 13.0
Other* / 1,356.5 / 1,565.5 / 1,459.1 / 1,756.0 / 1,814.9 / 3.4
Note: - * The list of countries included in “other” varies from country to country. Imputed from data on international travel to member countries.
Source: CTO Member Countries and CTO estimates.

By region, market shares were generally maintained. The Other Caribbean group, which includes the large destinations like Cuba, Dominican Republic, Haiti and Suriname, upheld its dominance (44%) on the total arrivals in 2013. The performance in Cuba was flat while DR recorded an increase of 2.0%. Consequently the group had an increase of 2.4% over the previous year. The 4.9% improvement in the Dutch Caribbean number can be attributed to an 18% upsurge in travel from the South American continent and a moderate 3.4% increase in arrivals from the more traditional US market. The OECS countries - with a market share of 5.4%, experienced little incremental growth in overall tourists (0.1%). Arrivals to Other Commonwealth countries fell slightly by -0.6%. Consequently, the collective 18-nation Commonwealth Caribbean declined by 0.5 % for the year. (Refer to Table2.1.1 and Figure 2.1.3).

United States remained the most important supplier of tourists to the region as its share of total arrivals averaged 50% over the last five years. There was no further expansion of market share in 2013 despite a 2.9% increase in arrivals from this market. About 12.3 million Americans visited the region with most arriving in Bahamas, Jamaica, Dominican Republic and Puerto Rico. Several other destinations received creditable returns from this market. (Refer to Table 2.1.2).

Canadian stay-over visitors to the region moved from 3.06 million in 2012 to 3.09 million, an increase of 0.7%, making it the lowest year-over-year growth in this market since 1997. This performance reflected the fact that there was marginal growth in the number of Canadians (0.1%) undertaking international trips excluding those visiting the neighbouring USA. Altogether, total outbound travel from Canada increased by 2.0%[6] up to November. This notwithstanding, the usual large number of tourists from this market visited Cuba, Dominican Republic and Jamaica.

The ongoing challenges in Europe, though not as severe as in previous years, affected arrivals into the region as there was a further reduction of tourists from the European countries in 2013. By the end of the year an estimated 4.7 million Europeans visited the region, some 3.7% fewer than the previous year. Of the 11 destinations with 50,000 or more arrivals from this market, only Bahamas (0.5%) and Jamaica (5.5%) registered growth. Demand for Caribbean vacations is particularly reduced in the United Kingdom in light of the Air Passenger Duty and low economic growth (below an estimated 2% in 2013). This is reflected in falling arrivals from those countries with heaviest dependence on this market (See tables 2.1.2 and 2.1.3).

Table 2.1.3: United Kingdom Arrivals by Sub-Region
(‘000)
REGION / 2009 / 2010 / 2011 / 2012 / 2013 / % CH
Commonwealth Countries / 728.4 / 686.9 / 696.2 / 654.3 / 645.5 / -1.3
OECS Countries / 218.7 / 207.4 / 219.7 / 219.8 / 208.9 / -5.0
Other Commonwealth / 509.7 / 479.5 / 476.5 / 434.5 / 436.6 / 0.5
Other Caribbean / 433.3 / 432.1 / 409.5 / 353.8 / 349.0 / -1.3
Total Caribbean / 1,161.5 / 1,119.0 / 1,105.8 / 1,008.2 / 994.6 / -1.4
of which CARICOM / 660.5 / 628.4 / 639.9 / 595.4 / 584.3 / -1.9
Note: Imputed from data on international travel to member countries.
Source: CTO Member Countries and CTO estimates.

While arrivals from the main source markets were teetering, tourists from South America were flocking to the region. The numbers moved from an estimated 858.9 thousand in 2009 to in excess of 1.4 million at the end of 2013, almost 13.0% more than in 2012 and 70% more than in 2009. The main destinations to record positive results in 2013 were Aruba (26.1%), Jamaica (15.9%), Suriname (12.4%), and Curacao (9.5%) and Dominican Republic (4.6%).

Statistics for 2013 revealed that 2.1% more Caribbean residents visited neighboring destinations than in 2012. It is estimated that 1.6 million Caribbean people travelled between islands for touristic purposes. Non-Commonwealth Caribbean countries dominated in numbers with an increase of 3.7%. The Commonwealth Countries experienced a decrease in visits from Caribbean nationals of 0.5%. The OECS which have significant intra-Caribbean tourism (accounting for 20-50% of total market share across countries), showed 3.4 % contraction in the arrivals.

Table 2.1.4: Intra-Caribbean Arrivals by Sub-Region (‘000)
REGION / 2009 / 2010 / 2011 / 2012 / 2013e / % CH
Commonwealth Countries / 631.3 / 601.8 / 654.7 / 624.3 / 621.5 / -0.5
OECS Countries / 298.9 / 284.9 / 284.6 / 283.6 / 273.9 / -3.4
Other Commonwealth / 332.3 / 316.9 / 370.1 / 340.6 / 347.6 / 2.1
Other Caribbean / 826.6 / 885.2 / 929.7 / 938.50 / 973.7 / 3.7
Total Caribbean / 1,457.9 / 1,487.0 / 1,584.4 / 1,562.8 / 1,595.2 / 2.1
Of which CARICOM / 573.0 / 541.8 / 575.2 / 575.4 / 579.9 / 0.8

2.2. Caribbean Performance - Cruise Activity

For 2013, the Caribbean was reported to be the leading cruise destination by Cruise Lines International Association (CLIA[7]) and accounted for 45.3%[8] of global ship deployments. Cruise passengers to the region totaled 21.8[9] million which represented a moderate pickup in cruise activity of 2.7% when compared to 2012. The fluctuations in cruise arrivals in individual destinations ranged from declines of 21.8% (Grenada) to increases of 45.1% in Curacao. Twice as many destinations (12), of the 23 destinations upon which the estimates are based, recorded increased cruise activity in 2013 over 2012. However, many destinations which are located furthest away from the US still struggle to boost cruise arrivals. A review of the monthly performance showed that the summer months of 2013 were the best since 2010 for cruise in the Caribbean.

Table 2.2.1: Cruise Passenger Arrivals to the Caribbean
2009 - 2013 ('000)
2009 / 2010 / 2011 / 2012 / 2013 / %ch 13/12
Cruise Pax / 19,452.4 / 21,125.4 / 21,544.2 / 21,313.1 / 21,884.8 / 2.7
NOTE: Imputed from data on Cruise Passenger travel to member countries
Source: CTO Member Countries and CTO estimates.

3. Accommodation performance

All major hotel performance indicators remained positive for 2013, but at slower rates of growth. The 2013 occupancy rate (67.1%) was directly in line with pre-crisis levels. The average room rate reached US$186.55 compared to US$175.62 in 2012. The revenue per available room (revPAR) also grew in the period from US$116.42 to US$125.20. There was no month during the year in which either of these indicators fell below the 2012 level. The number of available rooms remained unchanged but room revenue increased by 7.6% (refer to Table 3.1).

Table 4.1: Estimates of Visitor Expenditure(US$ M)
2009 / 2010 / 2011 / 2012 / 2013
Total / 24,419.1 / 25,497.0 / 26,460.6 / 27,413.2 / 28,054.9
Y-o-Y % / -10.2 / 4.4 / 3.8 / 3.6 / 2.3
Source: CTO Member Countries and CTO estimates
Table 3.1: Caribbean Hotel Performance 2009-2013
(January-December *)
2009 / 2010 / 2011 / 2012 / 2013 / % Chg
Percent Room Occupancy (%) / 61.6 / 61.1 / 61.8 / 66.3 / 67.1 / 1.2
Average Room Rate (US$) / 156.32 / 161.41 / 167.56 / 175.62 / 186.55 / 6.2
revPAR (US$) / 96.25 / 98.66 / 103.59 / 116.42 / 125.20 / 7.6
% change Room Revenue -17.1 4.4 6.2 8.9 7.6 / -16.4 / 3.8 / 5.2 / 10.9 / 7.6
%change
Room Avail / 0.8 / 0.5 / 0.9 / -1.8 / 0.0
Notes: *- As reported in given year. The information contained in this table is based upon independent surveys and research from sources considered reliable but no representation is made as to its completeness or accuracy.
Copyright: 2011 Smith Travel Research

4. Visitor Spending

The collection and tabulation of visitor expenditure data is primarily obtained through the more rigorous process of surveying visitors at the ports of departure lags behind those of visitor arrivals statistics. Thus official expenditure data for 2013 is not generally available yet. However, CTO estimated that visitors spent US$28.1 billion regionally, an increase of 2.3% when compared to 2012. The positive outcome is supported by the fact that all leading hotel performance indicators are positive and the recent rising trends of visitors spending.