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 one of this interview was be printed in last month’s Journal.
Looking ahead at 2013, what are the key issues for the destination?
Thomas Ludington, USA: Naturally, we’ll keep an eye on the US economics, as the government looks to figure out its debt situation. In the meantime, we are beginning to receive feedback from key travel agents and operators in the US that there is nothing “new” in the destination with regards to resorts and major attractions.
While some of our hotels have gone through renovations, there is a need for new properties and/or brands that can create some additional excitement for the destination. With respect to airlift, new services that provide additional lift from some key markets will help to drive additional arrivals and perhaps keep our airfare competitive within the region.
The major concern for 2013 is budgetary. As a result of consistent cuts over a number of years, all of the less effective areas had strategically already been eliminated in the general operating areas from a few years ago when we closed offices and reduced headcount in order to protect our marketing funds which helped to deliver strong arrivals over the last two years. We are now however having to implement significant cuts in important areas such as advertising and sales promotion.
Less market presence is likely to have an adverse effect on visitor arrivals which is a concern, particularly because unlike some of our competitors in the region, the Cayman Islands does not have large hotel chains spending millions of dollars in advertising which effectively supplements any gaps. Moreover, competing destinations do not appear to be increasing their average daily rates as quickly as some properties in Cayman are attempting to. This strategy may be met with resistence in the marketplace and if so, will also impact visitation.
Paul Minich, Canada: Stay the course. The Canadian economy is stable, but it is obviously influenced by economic uncertainty in Europe, China and the USA. If the world economies stay relatively focused on ensuring modest growth, Canada as a market will continue to show strength. It is important we keep our advertising presence strong in Canada in 2013 as our competitors have definitely increased their spending in Canada as they too see the strength in the economy and with that Canadian’s propensity to travel.
Don Mc Dougall, UK: The Cayman Islands government’s cash flow and budget situation have so far prevented any destination advertising this winter which we expect will be to the detriment of bookings and longer term awareness. Other key issues worth mentioning are:
a) Major European market economies and potential further erosion of middle income group business looking to upgrade their holiday experiences.
b) Economically, the number of ex-pats living in Cayman has a direct bearing on visiting friends and relatives’ tourism. During 2012 we have seen a prominent decline of such business from virtually all European source markets.
c) British Airways decisions regarding their service operations. With their new 787s and A380s starting to arrive in 2013, this will free up other aircraft to develop routes such as Grand Cayman which have been constrained by capacity in recent years. What decisions will they make which might affect the GCM route?
What are reasonable targets for the high season, the summer and shoulder seasons?
Thomas Ludington, USA: Given what we have been hearing from the local private sector and from the US operators, we are very excited about this year. Our winter season will be one of the best in years. I don’t think it’s unreasonable to look at increase over the last year as we still work to innovate and increase excitement about the destination regardless of budget woes.
Summer could be a bit more difficult if the hoteliers enjoy a higher yield in the winter and pull back their traditional summer and shoulder season promotions however we are working with the industry on this. The rest of the region is likely to continue to offer aggressive pricing, especially in the all-inclusive market, which is extremely popular with families.
Paul Minich, Canada: After two record breaking years of visitation we have established a new level of volume of Canadian travel to Cayman so we are looking for modest growth for both seasons. We will target to expand on those numbers when Air Canada’s new leisure airline Rouge deploys larger aircraft to sun destinations and when Westjet introduces its new premium economy seating which will appeal strongly to our target market.
Don McDougall, UK: Due to the seasonality of air seats trans-Atlantic being somewhat at odds with the seasonality of Cayman accommodations, overall seasonal pricing is not a major opportunity from the long haul markets.
How much will the election and recent political issues impact on activities?
Thomas Ludington, USA: We don’t see this as having much, if any impact on US arrivals. The destination continues to be considered one that is very stable and safe which are the main concerns of the US consumer. The fact is, there is a large percentage of the American population that don’t follow US politics so what we’ve seen here in Cayman isn’t even on their radars.
Paul Minich, Canada: Canadians tend to focus on their own political and economic environments and base travel decision making on the strength and confidence in the Canadian economy. Cayman is seen as a safe and desirable destination to visit by Canadians and that perception will continue into the future.
Don Mc Dougall, UK: The same is true in the UK/European context. As the Cayman Islands is a British Overseas territory, there is a passing interest in the political happenings but for the most part, the focus tends to concentrate on our own political and economic developments and the factors that have a direct bearing on daily life in the UK.