Browse > Home / Breaking News / Expert says: US economic slowdown not necessarily all bad for Caribbean

Expert says: US economic slowdown not necessarily all bad for Caribbean

May 8, 2008

CHTIC conference in Trinidad about investment climate in the Caribbean“Although faced with sky-rocketing oil prices, economic downturn and worries over food prices, it may not have the impact of “a silent Tsunami” on Caribbean tourism seeing the emerging markets with money to spend and US travelers expected to seek closer to home relaxation,” according to Jan Freitag from Smith Travel Research Vice President at the 12th annual Caribbean Hotel and Tourism Investment Conference.

This very unfounded and unscientific statement may hold some truth for those who like to believe in fairytales, but realism must start kicking in and the Caribbean better step up the efforts in sending messages to the “traditional markets” (since they still represent more than 70% of the total tourism volume to the Caribbean) as to why the Caribbean is still an attractive vacation destination … else, that statement will just be a lullebey for those responsible for tourism promotion.

Jan Freitag is trying to use common reasoning however does not include the following factors:

  • Food prices in the Caribbean will equally sky-rocket
  • Energy prices and energy consumption will sky-rocket
  • Only those Caribbean islands that have a “Pegged Dollar economy” will benefit from “the Buck is still a Buck”. Good example is the Dual Island Nation of St. Maarten/ Saint Martin. The Dutch side is a “Pegged Dollar Economy” while the French Side is a Euro Economy.
  • Rising labor costs (one of the most anticipated Global effects) will make every destination in the Caribbean more expensive than it is today
  • The economic impact on the European Union, seen by Mr. Freitag, as the “salvation and emerging markets” is reporting that a whopping 16% of the population will “drop” below the poverty line within the next three months
  • And last but most important, when the door to Cuba fully opens for US travelers, Cuba is ”dirt cheap” compared to other destinations since labor costs will not reach the same levels of other tourism destinations in the Caribbean within a short time span and Cuba is a “hop scotch” from Miami.

It is rather dangerous to listen to these “coveted” experts (Jan Freitag and KPMG Corporate Finance Partner Simon Townsend) since the message that was conveyed triggers complacency which is not something the Caribbean as a tourism destination can afford.

Written by admin · Filed Under Breaking News 

Comments

One Response to “Expert says: US economic slowdown not necessarily all bad for Caribbean”

  1. stringdude on May 8th, 2008 10:20 pm

    Hey Admin
    You’re entirely right in your assessment and Mr. Freitag is absolutely not an expert in this field. Emerging markets are China and India, where the middle class has now reached numbers in the 300 million (as a comparison the entire US population). But even there immediate needs are being filled and vacation or travel is not considered an immediate need. A travel budget can be alternatively spent, meaning there are options for leisure. As in any recession, those options first play at home. Theatres will be fuller, alcohol consumption will increase and home parties will become more lavish. At gas prices in Florida now reaching $3.70 per gallon ($4 along the Interstates) I can tell you that the amount of traffic is visibly decreasing. I can also tell you that SUV’s, just like real estate, have dropped sales prices to half what they were a year ago. The Caribbean better have some other cards up their sleeves, to survive the next year.

Got something to say?

You must be logged in to post a comment.