Minister Michael Remarks – ABTA and MOT Strategy Meeting

I’d like to thank you all for attending this incredibly important strategy and planning meeting for the Ministry of Tourism and Antigua and Barbuda Tourism Authority.

I’m so glad you all could join us and I look forward with much anticipation as to what will be the tangible results coming out of this meeting.

We have organized this strategy meeting in order to ensure the future success of Antigua and Barbuda’s Tourism Industry. Not only is this session organized to strengthen our tourism strategy, but to set in place our plan for 2017, which will be a major anniversary year for Antigua and Barbuda. Our Carnival will be celebrating its 60th Anniversary, Sailing Week will celebrate its 50th Anniversary, and the Antigua Classic Yacht Regatta will celebrate its 30th Edition. All in all 2017, which is just a few months away, is set to be a landmark year for Antigua and Barbuda and for our tourism industry.

Ladies and gentlemen it is no secret that tourism is the lifeblood of our economy and represents the main source of employment to our twin islands at roughly 53% of the workforce. Tourism contributes 60% to our GDP – making it our primary industry.
It is estimated that the tourism sector provides revenues of approximately US$750 million to the country, and is responsible for 40% of all investment. Our success as a nation relies on the success of Tourism. In other words where goes Tourism there goes the Nation!

As the CTO’s General Secretary Hugh Riley said earlier this year about our region, “We are the world’s most tourism-dependent region, and we must care more than anyone else. No one should pay more attention to delivering a superb experience than we in the Caribbean.” And that ‘experience’ includes every touch point visitors have with Antigua and Barbuda.

From their research in choosing a holiday – either online or with travel agents – to the airport experience, to their actual stay on properties, to all of their interactions with the people of Antigua and Barbuda — we must provide all visitors, and potential visitors, the best and most memorable experience possible.

We must entice them to not only visit but to provide such a pleasurable experience that they are inspired to share how wonderful their experience was with their individual networks and spheres of influence, and to hopefully return again and again to our wonderful twin-island nation.

The good news is that 2016 has been a strong year for tourism, as we have seen double-digit growth in visitor arrivals and have been fortunate to announce the start of multiple new tourism construction projects.

In the last year we have opened Ocean Point that has been a hive of activity supporting the weekly Eden Viaggi Alitalia Charter, Tamarind Hills, the stunning collection of freehold villas, townhouses and apartments that are being even further expanded with one-bedroom suites, and Barbuda Belle, which has become the belle of the media with its eco-friendly luxury concept and that has renewed interest in Barbuda.

We look forward to the opportunities that will be afforded to the destination in the form of new properties and accommodations. Next month Elite Island Resorts will be re-opening the Pineapple Beach Club as an adults-only resort, with major renovations that will attract new customers.

Since convening our last strategy meeting we have opened our new VC Bird International Airport. This has allowed us to attract new carriers, as well as increased airlift from other carriers.

This will further cement Sir V.C. Bird International Airport’s reputation, as a major aviation hub in the region.

By 2019, it is estimated that the total number of stay over tourist arrivals by air will surpass 280,000 and the number of cruise arrivals will likely exceed 1,000,000 cruise tourists. We must, at a minimum, ensure that we meet these projected figures or even exceed them. We cannot become complacent on our recent success and expect this growth to continue organically.
We need to be strategic, dynamic, proactive and adaptive to all opportunities for strengthening and growing our tourism industry.

Another key issue combating the region, and Antigua and Barbuda, is the Zika virus. The region overall has seen the impact of cancelled group reservations and felt the effect of those choosing not to travel if they are pregnant or are in the child-bearing years of their life. This of course impacts the Romance tourism sector – again – a key segment of the Caribbean and Antigua and Barbuda tourism.

Thankfully, due to the diligence and productivity of the various health agencies and Government, Antigua and Barbuda have been able to minimize the spread of Zika thus far.

This continues to be a top priority for the Government, but the overall perception of the spread of Zika in overseas market is that the Caribbean equals Zika.
So our challenge is to educate our key markets, and target new tourism niches and opportunities to offset any decrease in the romance market.

I am particularly encouraged that you have included a section on “Crisis Management” in one of your sessions as you pool your creative expertise in formulating the most effective ways to counteract the negative consequences that this pandemic can have on our critical tourism industry.

Ladies and Gentlemen, occasions, such as this, are important for reviewing past performances, analyzing current conditions and determining actions for the future.

This is an extraordinary time, requiring extraordinary responses not only for the tourism industry but for the economies of the Caribbean Community (CARICOM) individually and collectively.

Right now, the world faces a high degree of political and economic unpredictability.
In the United States, the Caribbean region’s biggest trading partner and the country from which a large number of tourists come, there is great uncertainty over its future direction.

Will America become a fortress, ripping up trade agreements; closing its market; denying entry to immigrants, and forcing its business community to operate only in their domestic market, or will a more internationalist approach prevail – one in which the US continues to be an open economy that encourages liberalized trade and transnational investment?

Will the European Union with which the Caribbean has a complex relationship in aid; investment and tourism have less enthusiasm for the English-speaking Caribbean because of Brexit?

How will China and Russia respond to these developments, and just how unstable could the world become unless the Presidential elections in the US reaffirm the value of internationalism and economic integration?
And how much longer will terrorism continue to stalk the globe, creating a climate of fear and generating expanding regimes of security that adversely impact travel and tourism?

These are all legitimate questions for your meeting to consider; not to paralyze your efforts but to galvanize action to counter challenges and seek out opportunities.

I know many of you are encouraged by what looks like good tourist arrival figures for the first half of the year.

Your cheer is understandable.

In the tourist sector in Antigua and Barbuda, you have worked hard to achieve these numbers, and you have done so against considerable odds.

Last February, the International Monetary Fund, in its assessment of the Antigua and Barbuda economy, stated quite clearly that it is “on the back of strong tourism inflows and lower oil prices, the Antigua and Barbuda’s economy has returned to growth after experiencing a recession in 2012 and close- to-zero growth in 2013.

Among the hurdles around which you and other tourism operators have maneuvered are:

 High taxes on air fares, including the Air Passenger Duty (APD) which continues to be imposed by the British government, and taxes on air travel by Caribbean governments. These fares make air travel to CARICOM countries – and between them – expensive and prohibitive;
 Increased and increasing competition from within the Caribbean, especially the Dominican Republic and Cuba;
 High costs to deliver a quality product to your clients, especially for water and electricity.

Amid all this, greater pressure is put on the tourism sector to deliver employment, revenues and foreign exchange.

Indeed, tourism, on average, now accounts for a significant percentage of the Gross Domestic Product of CARICOM countries taken as a whole.

Greater demands are made on the tourism sector throughout CARICOM to deliver employment, revenues and foreign exchange as well as a competitive product.

Indeed, tourism, on average, now accounts for a significant percentage of the Gross Domestic Product of CARICOM countries taken as a whole.

Now it is to specific concerns in the tourism industry to which I turn, as much as to underscore the real challenges with which all small island states are faced, as to sound a warning to you about the survival of your industry.

Let me first acknowledge that, despite all those who often dismiss tourism as “too fragile” to be a real player in the economic development of the Caribbean, the industry has emerged as a strong and resilient economic activity that has been a fundamental contributor to global economic recovery by generating billions of dollars in exports and creating millions of job.

The UN World Tourism Barometer has reported that tourism receipts increased by US$48 billion in 2014 to reach a record US$1.2 trillion globally.

An additional US$221 billion was generated from international passenger transport, bringing the total export earnings from international tourism to US$1.5 trillion.

Remarkably, the Americas was the highest growth area for tourism in the world.

And while the lion’s share of receipts – US$210 billion – went to North America, the second highest share was earned by the Caribbean, though only US$27 billion.

Still, the Caribbean was ahead of all of South America and ahead of all of Central America – quite an accomplishment for the region.
But, the biggest beneficiaries in the Caribbean area were the Dominican Republic, Puerto Rico, and Cuba.

Between them, they accounted for almost half of the money earned.

Let us remember the three lead countries: Dominica Republic, Puerto Rico and Cuba.

Nine years ago, Sir Ronald Sanders wrote a commentary that was widely published.

It was entitled, “The Big Three and Little CARICOM”.

This is what he said in the commentary:

“By any objective analysis, the US embargo of Cuba will be lifted within the next decade.

US companies want a significant piece of the Cuban action which they now see going to European and Canadian companies, and increasingly to China and Russia.
When the embargo is lifted, the Caribbean will be a very different place.

It would be one in which its two largest countries with populations of 20 million would be Spanish-speaking and of far greater importance to the global community than the little countries of CARICOM.

It is only the US trade embargo against Cuba that now prevents an integrated relationship between Cuba and the Dominican Republic in the Caribbean that would dwarf CARICOM.

Then, there is Puerto Rico – another island territory in the Caribbean with a population of 3.9 million that is Spanish-speaking.

Even if Puerto Rico does not seek separation from the US, once the embargo on Cuba is lifted, the deepening of economic relations between Puerto Rico, Cuba and the Dominican Republic would make perfect sense.

The Caribbean will then be dominated by these “big three” – with markets and investment opportunities far greater than all the CARICOM countries.

CARICOM countries would delude themselves if they believe that with their individual small markets, high investment costs, high costs of doing business and vulnerabilities both to natural disasters and external economic shocks – such as the current global financial meltdown – they could each operate successfully in the global market place in competition with the “big three”.

Sir Ronald ended the commentary by warning that:

“CARICOM governments would do well to bolster their economies and their capacity for dealing with their Caribbean neighbours and the international community by urgently completing the arrangements for implementing their own Single Market”.

This is a task for governments certainly; but not for governments alone.
The private sector, too, has to assume responsibility; first to solidify and strengthen their own positions, and then to explore ways of engaging the emerging alliance between Cuba, the Dominican Republic and Puerto Rico.

Specifically, in regard to tourism, it has become a comfort zone for many decision makers in the industry in CARICOM to proclaim that we have nothing to fear from the lifting of the US embargo against Cuba.

In my view, those who retreat behind this refrain ignore a huge elephant in the room.

Here are a few facts that illustrate my point:

o US airlines will begin direct commercial flights to Cuba this year. Already, airlines have applied for routes into several Cuban areas. American Airlines alone wants 10 flights a day from Miami to Havana. There are another 100 routes for which airlines such as America, Jet Blue, Delta, Eastern and United are scrambling.
o Cuba is a market of 11 million people. As its economy grows and the purchasing capacity of its population increases, its attractiveness as a place for investment, including in tourism, will rise correspondingly. Located just 90 miles from the US, it is also what US President Barack Obama called “a natural trading partner”.

o Last month, more than 700 passengers went to Cuba from the US on board the Adonia, a boat that’s part of the Carnival fleet – the first in more than 50 years – and the start of many more.
o Norwegian Cruise Line wants to offer cruises to Cuba by the end of the year; the Miami-based company is already seeking approvals to sail there.

o Cuba received a record 3.52 million visitors last year, up 17.4 percent from 2014.

o American visits rose 77 percent to 161,000, not counting hundreds of thousands of Cuban-Americans.

o The tourism infrastructure, including with just 63,000 hotel rooms nationwide, has languished, but now the government is seeking more foreign investment and has plans to reach 85,000 hotel rooms by 2020. At the end of this exercise, Cuba will have updated, fresh and appealing infrastructure.

Even with the embargo still in place, Cuba is already a strong competitor for the rest of the Caribbean in tourism.

Once the embargo goes fully, in some measure the rest of the Caribbean will suffer from the diversion of US resources – both private and public – into Cuba.

As for the Dominican Republic, that country plans to Build 18,000 new hotel rooms by 2019, comprising 55 new hotel projects and more than $2 billion worth of investments.

Now, of all the CARICOM countries, Jamaica has recognized the potential benefits of a tourism alliance with Cuba and the DR.

It plans to forge a Multi-Destination Arrangement between Jamaica, Cuba and the DR.

A memorandum of understanding is planned for this month.

Interestingly, the Jamaica Minister of Tourism announced that “there is also the possibility of Russia becoming a part of this arrangement which will see airlift arrangements between Russia, Cuba, Jamaica and the Dominican Republic.”

These arrangements make perfect sense for Jamaica located, as it is, in close proximity to the Spanish-speaking islands.

But, one has to wonder whether the deficiencies in the CARICOM integration process and its failure to deliver its objectives after 43 years of existence, has not contributed to encouraging Jamaica to seek alternatives which are not limited to tourism.

No one can blame Jamaica for taking a sensible initiative, but it would have benefitted CARICOM to enter these arrangements together.

It is what CARICOM governments should have been contemplating for some time now in collaboration with the Caribbean Hotels and Tourism Association (CHTA).

It took the Cuban Vice Minister of Tourism, Luis Miguel Diaz Sanchez, earlier last month to express to the Caribbean Hotels and Tourist Association a strong desire to see the region cooperate in building a stronger Caribbean brand.

Encouragingly, the CHTA said they “will be pursuing a number of priority issues discussed during their meetings” with the Cubans.

No time should be lost in pursuing these priorities; time is not on CARICOM’s side even if, at this point, there is goodwill from the Cubans.

Such goodwill will not last forever, and Cuba’s national interest will respond to change and the lure of other sirens.

I now make two other points.

The first is that there is an obvious need for diversification of the markets from which Antigua and Barbuda, and other CARICOM countries seek tourists.

For years, CARICOM governments have talked about opening markets in China and Japan, but no meaningful action has been taken, largely because it is up to the tourism private sector to do so.

Today, in outward tourism, China is the world’s top spender with a 28% increase in 2014, reaching a total of US$165 billion.

Why would We, Antigua and Barbuda or other CARICOM countries neglect a share of that significant sum of money?

There is now a great opportunity, through multi-destination arrangements with Cuba, to tap into the Chinese market.

The opportunity lies in the reality that Air China now flies directly from Beijing to Havana. The number of Chinese tourists in Cuba surpassed 25 thousand last year.

A market and an opportunity exist.

As we look at the state of tourism in CARICOM today and the vital role it is playing in the majority of CARICOM countries and that it could play in all of them, it is significant that there is no structured meeting of CARICOM Ministers of Tourism.

Meetings of Tourism Ministers should become an organ of CARICOM, enshrined in the Treaty similar to Ministers of Foreign Affairs and Ministers of Trade.

It is time that this missing link be corrected, and I hope that Heads of Governments, and our own Antigua Hotels and Tourist Association will encourage their colleagues in the Caribbean Hotels and Tourist Association to call for it.

What we are required to do in tourism might sound like a daunting task, but I believe in you as a team.

I know that by working together we will be formable in creating plans and programs that will improve our product, attract new air and cruise lines and market and promote our country in such a way that we will continue to see increased visitor arrivals to our beautiful country.

The Government is investing in improving our overall cruise product as well, with plans already in motion for developing St John’s Harbour to include extensions of the piers that will accommodate the largest vessels, along with the construction of an additional pier to enable up to six (6) ships to be berthed simultaneously.

The development of the quayside comes with the added benefits of new high-end shopping and facilities such as a cruise passenger terminal to re-position the destination to advantage of home porting opportunities. We are actively pursuing opportunities to be a homeport with several European based cruise lines in an effort to diversify our cruise ship offering.

I am pleased to report that the Pullmantur will make 19 calls this season and will be offering home porting services from Antigua and Barbuda for the first time.

Additionally, the Government is investing in the Fort James Development project to leverage the strength of one of our best beaches by including authentic local restaurants, boutiques, tours and attractions, an outdoor amphitheater and world class Water Park, as well as a museum detailing the history of this Fort.

All of our products, investments and enhancements ultimately add value and improve the customer experience.
We must continue to improve our amenities in the area of fine dining, exciting tours and excursions, first class entertainment, and International standard of duty free shopping. These enhancements are all priority areas of consideration for the Government.

It is imperative that Antigua and Barbuda offers a memorable and unique visitor experience, not as a one-off outcome, but as an all the time phenomenon.

This meeting offers us an opportunity to listen to one another, to learn from one another and to share ideas about programs that will continue to propel Antigua and Barbuda forward in what is an already impressive momentum.

Today, we will hear the strategies and plans for our specific source markets: the UK, Europe, USA, Canada and the Caribbean as well as the Ministry and Tourism Authority. This is important to allow all ideas to contend as you brainstorm for the best possible outputs.

The Government of Antigua and Barbuda continues to applaud what’s been accomplished and further reaffirms its commitment to provide you with the resources needed to move the dial forward.

So on behalf of the Ministry and the Tourism Authority, I again extend a warm welcome to each of you and thank you for your collective efforts in what we have achieved this year.

I anticipate great plans from you as we collectively continue to make great strides in our tourism strategy, in our tourism industry and by extension the progress of our beloved Antigua and Barbuda.

Thank you and best wishes for a very successful and productive meeting!

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