The Caribbean Tourism Organisation held its inaugural State of the Industry conference this September in St. Martin and aviation issues featured heavily on the agenda.
Intra-Caribbean travel and the cost of airfare were two hotly debated topics at an event that attracted around 300 travel professionals from the private and public sectors.
Keynote speaker was Keith Williams, chief executive officer of British Airways. Referring to the increasingly price-driven tourism market, BA’s CEO attributed weaker than anticipated leisure demand to the ongoing weakness in the UK economy.
Citing difficulties experienced by various UK industry sectors, high levels of British unemployment and the UK Chamber of Commerce’s decision to downgrade UK growth forecasts from 1.3 to 1.1 per cent, Williams asserted that the recession was proving costly for the travel sector.
To illustrate measures that the aviation sector has been taking to confront the ongoing fiscal challenges, BA’s CEO highlighted the industry’s attempts to trigger growth, profitability and stability through consolidation, pointing to BA’s merger with Iberia and creation of IAG, the world’s sixth largest airline group in terms of revenue.
Despite current high demand for premium and corporate travel, Williams referred to dampened demand for leisure travel, concluding that increasingly high quality and a seamless leisure travel offering were more crucial than ever.
For the summer 2012 timetable Williams explained that BA will be forced to reduce capacity to the Caribbean by approximately six per cent in a bid to focus on the most profitable routes.
Attributing the reduction to lower-than-planned recovery of leisure travel demand, the BA chief linked the reduced demand to the UK’s government’s “destructive tax juggernaut” of Air Passenger Duty. Williams expressed a concern that further increases to APD could “jeopardise Caribbean routes” but confirmed a hope that the schedule reduction will be reversed in BA’s winter 2012/13 timetable.
Other key elements of Williams’ address included digital and social media and also the significance of sustainability. BA’s CEO billed today’s customers as the new journalists due to the speed with which they can now disseminate and share online their opinions on their experiences, and highlighted the associated importance for the travel industry to develop professional relationships social media.
With reference to sustainability, Williams stressed the growing importance that travellers attach to the impact of their actions on fragile eco-systems and called on conference delegates to put in place policies that protect the environment. By 2015 British Airways is hoping to become Europe’s first carrier to use sustainable jet fuels and is aiming to reduce carbon emissions by 50 per cent by 2050 through the introduction of household waste-based biofuels.
Destination marketing, strong local and regional partnerships, and an efficient, consultative airport were critical to success, according to other experts.
Most airlines have a long list of potential routes, said Chad Meyerson, director of Global Sales at JetBlue Airways, noting that his company has some 50 destinations under consideration at any given time.
With decisions typically taken a year in advance, he pointed to the importance of relationships built through site visits and face-to-face discussions with tourism boards, airport authorities, governments and other key players.
Edmond Rose, Virgin Atlantic’s director of Commercial and Revenue Planning, highlighted the critical role an airport can play.
“It must be fit for purpose and responsive to consultation with airlines,” he said.
Since airlines have a vast amount of experience with customers in airports all over the world, they can help a destination get the most from its airport. Naturally, he said, high airport taxes are a disincentive to doing business in a market.
“Have you ever come in contact with a happy hotelier?” asked Avinash Persaud. From challenges to labour and so on, there are so many stresses that may limit their smiles.
We’re lucky to have tourism industry at all,” he said. The Caribbean is dependent on consumers yet have highest crime rate in world.
“How is that sustainable? Beautiful beaches that attract travellers but have smelly landfills in same beaches. We ask people to pay hundreds of dollars for hotel accommodations but service is not up to par. The reality is that it is not sustainable.
“The tourism industry is headed in way of the sugar industry. Just 100 years ago, the region was dependent on the profitable sugar industry and 100 years later it’s a footnote in our eyes. Sugar failed because lack of investment by the private sector. Fear and complacency will take us in the same direction and we need to focus on crime, environment and service quality.”
The Caribbean needs zero tolerance for all of these factors especially crime, he said.
“If overseas governments want to help us we should welcome that. As a region we mine the environment and should invest back into it. Every country should have environment balance sheet, with assets vs. liabilities.” He added that service quality should have benchmark expectations and countries should invest in raising international standards of service provisions.
He said that the Caribbean was a mirror image of the world today, in that the Caribbean has assets but no money, which is not attractive for investors. Therefore there was a need to do a better job to engage, exploit and employ capital available in the region.
Recent efforts, he explained, to create small company markets in Jamaica have proven to be successful. One of the reasons that there was not aggressive investment was because the investment group is small and they don’t want to take risks.
“We need to democratise it and make it as hungry as all of our people and government should do. The Caribbean is the most creative region in the world: from music, to literature to creativity to our entrepreneurial mindset and education.
“We sit in the middle of two of the largest markets being North and South America, which is larger than Asia. What fails us is complacency and hunger. The region needs to come together and replace fear with desire to exploit opportunities and employee capital.”
Confidence and future
Caribbean Tourism Organisation Chairman Ricky Skerritt called on the industry to remain confident in the Caribbean’s appeal despite the economic downturn.
“While the global economic recovery may in fact be slow and unpredictable, we must not lose faith in ourselves, in our products, in our countries and in our region. We must maintain our confidence in the value that the Caribbean brings to the world of travel and tourism. We must not sell ourselves short. The Caribbean is still the best tourism region in the world,” he said.
The organisation’s priorities for the forthcoming year include establishing a region-wide marketing body, initiating a deeper statistical analysis of the market in order to inform future policy and pushing for a reappraisal of the possibilities of standardising visas to tap into the at present relatively undersold internal travel market and Diaspora market.