The Cayman Islands Department of Tourism is represented in key territories by various offices, each tasked with bringing visitors to these shores. The Journal asked Thomas Ludington (USA), Paul Minich (Canada) and Don McDougall (UK and Europe) for their thoughts on tourism as we stand in early 2013 and beyond. Part two of this interview is to be printed in next month’s Journal.
What are the specific issues at the moment in economic terms in driving visitors to Cayman?
Thomas Ludington, USA: Pent up demand for leisure travel in the US seems to be having a positive effect on travel to the Cayman Islands. Election years tend to keep people from making large purchases, including vacations. Couple that with the US fiscal cliff issue and one can understand why the US economy suffered from uncertainty. The Consumer Confidence Index was down in November and December, which is a key data point to watch in our industry. In spite of all of that, we had a really good year and are looking forward to the final arrival figures when they are released. Now that the US elections are over, and we have not gone over the first fiscal cliff, this pent up demand is starting to be released. The mass affluent audience still feels that travel is part of their DNA, and the Cayman Islands continues to be an attractive destination for that demographic as we strategically, through our projects and programmes, effectively reach this audience in order to encourage travel.
Finally most of our wholesale and Online Travel Agent partners are already reporting higher booking activity this year over 2012 which is to be expected as we have worked on partnerships to make these distribution channels more efficient.
Paul Minich, Canada: The strong Canadian dollar continues to make Caribbean travel a good value proposition for Canadians, and we are now in our third season of sustained currency strength. Another positive contributor to visitation is the continued choice of air partners currently servicing the Cayman/Canada route from Canada.
As a result, we have seen reasonably good value in air fares as competition for market share benefits consumers. This was what we expected and why it was so important to attract additional airlift from this market. From a regional perspective, the single market of Calgary (Alberta) is experiencing an economic surge that is related to sustained strength in the energy sector. This is translating into a significant increase in leisure travel.
Don Mc Dougall, UK: Regional market economy has definitely affected all tourism to the Caribbean region, however, the Cayman Islands business appears to be holding out quite well against the competitive set. Reason being the other, more mass market destinations have been more appealing (because of lower price) to the middle income market, but it is the lower and middle income market which has not weathered the financial situation well. Among the higher income groups to which the Cayman Islands appeal, they have been somewhat more resilient to the financial crisis and holidays are still sacrosanct.
With that said, as a result of budget cuts, advertising plans in the UK have been extensively cut and we were not able to advertise Cayman Islands vacations over the cold winter period when people are more likely to be influenced to escape the cold. This is a key issue which is expected to impact business results and visitation from the UK/Europe region during 2013.
How did this alter in 2012?
Thomas Ludington, USA: Again, election years tend to keep people from making larger purchases, including their vacations. The economy was still trying to improve and the pace of that improvement continued to be sluggish. The US government’s inability to address their financial woes did drag down the market. We’re fortunate that we have positioned the destination to attract a more discerning consumer that tends to be more resilient to the woes of the US economy.
Paul Minich, Canada: The currency strength as mentioned is now in its third year and its stability has given Canadians the confidence to engage in travel planning. Competitive air fares were at their best during the launch of Westjet service a few years back and although fares have increased somewhat in 2012 we are still seeing very attractive air fares for consumers. These comments are, in a sense, suggesting 2011 and 2012 behaved in a similar and positive fashion from an economic perspective.
Don Mc Dougall, UK: From a strictly economic standpoint, 2012 was more adversely affected than 2011 as the impact of the recession continued to be felt. From a domestic perspective, the financial crisis being experienced by the Cayman Islands government is having an impact and strategies are being reviewed and revised in keeping with the reality of severely reduced funding.
How is your region recovering (or not) from the down times?
Thomas Ludington, USA: As indicated above, with the US elections behind us and the threat of the first fiscal cliff removed, discerning travellers are turning their attention to leisure travel and the Cayman Islands continues to be an attractive option especially due to the fact that we have put much value added promotions into the marketplace. While we [Cayman Islands Department of Tourism] maintain a cautious outlook in terms of predicting market strength, the signs thus far are indicating that performance in 2013 will continue to trend positively.
Paul Minich, Canada: Canada did experience a softening of demand during the height of the recession, but our ability to sign up with Westjet as a new air partner as the nation was coming out of its economic doldrums was a very significant factor. Visitation to Cayman had immediate and sustained growth in the range of 30 per cent, allowing Canada to post record (best ever) back to back visitation to Cayman. We spent our marketing dollars in a very focused way during this period and created a new interest in Cayman as a destination of choice amongst Canadians. In 2013 we are holding to this new level of increased visitation and continue to see new opportunity- specifically in western Canada.
Don McDougall, UK: As already mentioned, the market continues to suffer, unfortunately with little end in sight as it relates to economic recovery and growth.
Are there new markets ready to be targeted?
Thomas Ludington, USA: Here in the US, we’re excited about Cayman Airways committing to the Dallas Ft. Worth market. If the connection times are more favourable and the right agreements are in place, we feel that will open up the US western states, where there are some other great dive markets outside of Dallas as well, looking to come to Cayman. Dallas also has much strength and therefore having service for two years in a row will help to increase visitors from that city as well. While it’s not a ‘new’ market, we’re focusing additional sales efforts on the dive trade market in the US with a new rewards and on line educational program designed to incentivise dive shops to send their divers to the islands. Dive shops are a major distribution point that we are focusing on like never before in order to reinvigorate this market.
Of course, we have high expectations that the recently launched JetBlue services from New York and Boston will bring new visitors to Cayman that are very loyal to the carrier. When you look at the “things that really matter” airlift is king and this why we put so much time and effort into attracting Jetblue to start service.
Paul Minich, Canada: Although not a ‘new’ market, a continued focus on western Canada remains a part of our strategy for 2013 and the economic vibrancy of the west will continue to be addressed. For 2014, outreach may be expanded to include Ottawa and English speaking Montreal.
Don McDougall, UK: Growth in Cayman/Havana twin centre opportunities. We are increasing tour operator awareness and interest in operating twin centre options, thereby improving airlift capacity by working with a second destination’s air services. We are also looking at niche markets/specific interests and depending upon Cayman Airways developments offering airlift improvement opportunities out of the European region.
Are the BRIC countries still at arm’s length or are they more aware of/interested in Cayman?
Don McDougall, UK: With airlift constraints and budgets being as they are, we don’t see any plans to focus on these new markets for the immediate future.
Check out next month’s Journal for the representatives’ thoughts on key issues of 2013.