Down but far from out: Q4 rally mitigates decline in 2018 Caribbean arrivals

While the U.S. remains the largest international market for the Caribbean overall, the Caribbean Tourism Organization said that Canada provided the most visitors to the region in 2018, with 3.9 million travellers contributing to the Caribbean’s second-strongest year on record.

And while overall tourism numbers represent a decline in arrivals for 2018, the results were less severe than anticipated, thanks in part to a surge in Q4 arrivals.

According to Ryan Skeete, the CTO’s director of research and IT, the increase in Canadians – representing 5.7 per cent year-over-year growth – was due to Canada’s “strong economic performance and increased seat capacity to the region.”

Overall, Skeete said that the Caribbean received 29.9 million tourist visits in 2018, the second highest on record, surpassed only by the 30.6 million who visited in 2017.

Year-end rally

Among the destinations, tourist arrivals showed uneven growth. Several countries reported double-digit increases in 2018 such as Guyana (15.9 per cent), Belize (14.6 per cent), the Cayman Islands (10.7 per cent), The Bahamas (10.5 per cent) and Grenada (10 per cent), attributable to factors such as sustained targeted marketing, upgraded tourism infrastructure, additional rooms and enhanced airlift, Skeete said.

While countries affected by the 2017 hurricane season recorded double-digit declines for 2018 overall, even these destinations experienced a “significant turnaround” during the last four months, Skeete said, registering triple-digit increases during this period.

“With a strong performance during the last four months of 2018, including a robust showing by countries impacted by the 2017 hurricanes, the evidence suggests that Caribbean tourism is on the upswing,” Skeete said, adding that while the first eight months of 2018 were marked by declining travel numbers, “signs of a rebound emerged in September,” when the region recorded a three per cent rise. October alone saw a 11.8 per cent growth, with arrivals in the last four months up 9.8 per cent.

While the year-end total represents a 2.3 per cent decrease in annual arrivals, Skeete added that this performance was better than the estimated three to four per cent decrease projected by the CTO. Last year marked the first decline in annual tourist arrivals in nine years, he said.

Total visitor spending also declined slightly by approximately one per cent to US$38.3 billion, although tourists spent slightly more per trip than they did in 2017 - US$1,177 per trip compared to US$1,171 in 2017.

Now trending

Among the findings Skeete shared include the following trends:

• In line with the overall decrease in arrivals to the region, hotel occupancy fell by 0.8 percentage points, according to STR Inc (formerly Smith Travel Research), a U.S. company that tracks supply and demand data for the hotel industry. However, the average daily room rates increased by 1.7 per cent to US$207.61, while revenue per available room grew by 0.6 per cent to US$135.46.
• According to air travel data firm OAG, air capacity in the Caribbean for 2018 decreased by 3.4 per cent, while the number of flights declined by 4.3 per cent. However, as with arrivals, there was a reversal of these numbers in the fourth quarter, with seat capacity rising by 5.3 per cent, while frequency grew by 5.2 per cent.
• While cruise activity was quiet for the first four months of 2018, this was followed by sustained month-over-month growth as cruise ships returned to the ports and hubs which were rebuilt after the hurricanes. In the end, the sector had its best performance ever last year, Skeete said, with cruise passenger visits reaching an estimated 28.9 million, a 6.7 per cent increase.

Looking ahead

According to Skeete, the outlook for Caribbean tourism in 2019 is "cautiously optimistic:" while global demand for international travel is expected to remain strong, underpinned by healthy economic activity, the CTO is bracing for the impact of global factors such as the outcome of the Brexit negotiations, the ongoing trade war between the U.S. and China and potential extreme weather events in the destinations and marketplaces.

“Consequently, we are projecting that tourist arrivals will increase between six per cent and seven per cent in 2019, as the damaged infrastructure in the hurricane-impacted destinations returns to capacity. Similarly, cruise arrivals should expand by a further four to five per cent.”

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