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Slow tourism industry recovery underscores need for key reforms in Caribbean: IDB report

The extreme uncertainty surrounding the tourism recovery in the Caribbean highlights the importance of boosting innovation and supporting transformations that align tourism destinations and products with post-pandemic global demand trends, according to a report of the Inter-American Development Bank.

Most global tourism reports predict a 2-to-4-year period for a full recovery to 2019 levels. However, the Caribbean could either lead or lag the global recovery, depending upon the specific circumstances in the main Caribbean source countries and in Caribbean destinations themselves.

Imagining a Post-COVID Tourism Recovery: Regional Overview analyzes key drivers of tourism demand in the short term, including the evolution of the pandemic and the COVID-19 vaccination roll-out, the economic environment of source countries, the split between business versus leisure tourism, and airline capacity, among others.

“Over the longer term, Caribbean countries must spur innovation and reinvigorate their tourism offerings,” said Olga Gómez, Tourism Lead Specialist at the IDB. “It is no longer enough to depend on the lure of splendid beaches. Tourism destinations need to invest in improving their competitiveness, aligning their tourism products to the broader local and global economic trends, and exploring new and traditional emerging market segments such as global nomadism or nature-based tourism.”

Even for the less-tourism-intensive economies of Guyana and Suriname, where the tourism sector economic contribution is relatively small compared to the regional and worldwide averages, there is room for improving the sector’s contribution to growth and employment in the coming years.

The report is part of the Quarterly Bulletin series produced by the economic and tourism sector team from the IDB’s Caribbean Department. While it analyses economic challenges facing member countries – The Bahamas, Barbados, Guyana, Jamaica, Suriname, and Trinidad and Tobago – many of its conclusions are relevant to the broader Caribbean region. The study contains more detailed economic overviews of the six IDB member countries.

The study presents global travel sentiment analyses and post pandemic tourism demand trends. Given travelers’ revealed preferences and the fact that most current tourism activity relies on the region’s attractive natural assets, environmental sustainability and climate change adaptation will be more critical than ever. These issues must therefore be prioritized in the public and private sector policy and investment agendas, the study says.

The report also updated the IDB’s Tourism Dependency Index, which calculates the relative dependence of over 160 countries globally on tourism for economic output, employment, and exports. Of the world’s fifteen most tourism dependent economies, eight are in the Caribbean, led by Aruba (ranked first in the world, with a score of 80 out of a possible 100 on the index), with The Bahamas, Barbados, and Jamaica joining the list of most tourist-dependent economies.

Based on a database developed from various national sources, a breakdown is also now available for tourism arrivals to the three most tourism-dependent economies. Overall, 2020 represented a contraction of international arrivals of 76 percent for The Bahamas, 67 percent for Barbados and 69 percent for Jamaica. This is in line with the estimate by the UN World Tourism Organization of a 67 percent contraction for the broader Caribbean region.

“On the positive side, firms have been adjusting business processes, and governments have been advancing in digitalization in response to the pandemic,” the report notes. “This form of innovation could lead to productivity increases that are sustained into the post-pandemic period.”

About the IDB

The Inter-American Development Bank is a leading source of long-term financing for economic, social and institutional projects in Latin America and the Caribbean. Besides loans, grants and guarantees, the IDB conducts cutting-edge research to offer innovative and sustainable solutions to our region’s most pressing challenges. Founded in 1959 to help accelerate progress in its developing member countries, the IDB continues to work every day to improve lives.

Contacts

Bachelet,Pablo A.

Press Coordinator

pbachelet@iadb.org
Bachelet,Pablo A.
External Contacts

Golda Lee Bruce

Golda Lee Bruce
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