INTRODUCTION Current status - globally and regionally State of the major economies Individual market performance and prospects Cruise Activity in the Caribbean Hotel Performance Airline Capacity Prognosis for medium term 1
Global Arrival Levels International arrivals around 1 billion - 2012 Additional 25m (5%) in Jan-Jun 2013 travelled globally 2
Global Arrival Levels 1. Emerging economies (up 6%) continued to outperform Advanced economies (up 4%) during the period. 2. Strongest growth was recorded in Asia and the Pacific, Europe and the Middle East. Growth was weaker in the Americas and Africa, although positive. 3
Global Arrival Trends Table 1: International Tourist Arrivals 2010 2011 2012 2012 2013 Jan-Jun Full Year, Change YTD World 6.4% 4.9% 4.1% 4.9% 5.2% Europe 3.0% 6.5% 3.6% 3.8% 5.1% Asia and the Pacific 13.2% 6.5% 7.2% 8.0% 6.2% Americas 6.6% 3.6% 4.5% 4.7% 2.2% Caribbean 1.6% 2.7% 5.5% 5.8% 0.0% Africa 8.7% -0.8% 4.4% 7.2% 3.8% Middle East 11.6% -5.6% -5.2% 0.9% 12.9% Sources: UNWTO, CTO Strongest growth in Middle East (12.9%). Weakest growth in the Americas (2.2%). 4
Caribbean Performance A total of 15.6 million tourists visited the Caribbean between January and July this year. No change when compared to the same period last year; but actual levels still remain above pre-crisis levels. 18 destinations so far reported data on arrivals for at least seven months of 2013. 5
Caribbean Performance 17 destinations (65%) have recorded increases in tourist arrivals with 10 growing faster than the world average (5.2%). 10 fastest growing destinations are: Anguilla, Aruba, Belize, Cayman Islands, Curacao, Guyana, Haiti, Montserrat, St. Kitts & Nevis and Suriname. 6
Thousands Caribbean Performance by month 3000 Figure 2: Monthly Tourist (Stop-Over) Arrivals 2009-2013 2009 2010 2500 2000 2011 2012 2013 1500 1000 J F M A M J J A S O N D Month The best monthly performances in were in March and July reflecting the celebration of Easter and summer Carnival Season respectively. 7
Caribbean Performance Table 3: Tourist Arrivals to the Caribbean by Sub-region (000s) (Jan-Jul) SUB-REGION 2013 e 2012 e % CH COMMONWEALTH CARIBBEAN 4,770.5 4,820.7-1.0 OECS COUNTRIES 730.0 731.2-0.1 OTHER C WLTH COUNTRIES 4,040.4 4,089.5-1.2 DUTCH CARIBBEAN 1,309.3 1,251.3 4.6 FRENCH CARIBBEAN 836.1 827.6 1.0 US TERRITORIES 2,974.6 2,961.6 0.4 SPANISH CARIBBEAN 5,224.2 5,261.5-0.7 TOTAL CARIBBEAN 15,616.3 15615.5 0.0 of which CARICOM 3,641.1 3,713.0-1.9 Note: e - CTO estimate Imputed from data on international travel to member countries. Source: CTO Member Countries and CTO estimates. Dutch Caribbean is the best performing sub-region. Other sub-regions are relatively flat or declining. 8
Market Performance Jan-Jul Table 4: TOURIST ARRIVALS TO THE CARIBBEAN (2008-2013) ('000) MARKETS 2008 2009 2010 2011 2012 2013 %ch 2013/12 Total Arrivals 15,328.9 14,122.2 14,513.5 14,812.7 15,615.5 15,616.3 0.0 United States 7,774.8 7,150.6 7,351.2 7,397.4 7,749.8 7,815.0 0.8 Canada 1,669.5 1,805.9 1,823.4 1,987.5 2,158.2 2,125.5-1.5 Europe 3,315.3 3,000.6 2,897.0 2,934.1 2,956.5 2,807.1-5.1 United Kingdom 765.1 668.0 618.4 623.0 548.8 546.8-0.4 Caribbean 492.3 459.4 458.7 473.0 487.6 487.9 0.1 Other 2,077.0 1,705.8 1,983.1 2,020.7 2,263.4 2,380.7 5.2 Note: Imputed from data on international travel to member countries. Source: CTO Member Countries and CTO estimates. Other, which is dominated by South America, is the best performing market. The main markets are relatively flat or declining. 9
US Market Marginal growth of 0.8% was recorded in the Jan-Jul period. About 7.8 million tourists visited the region from the United States. The market share for the US rose slightly from 49.6% in 2012 to 50.4%. 10
US Market (Cont d) Most (13 out of 22) of the reporting countries recorded increased arrivals originating in the US. US Outbound travel thru to May was flat. (OTTI Office of Travel and Tourism Industries). 11
Canadian Market Canadian market contracted by 1.5% in the review period (Jan-Jul) 2.1 million Canadians visited the region so far in 2013 compared to 2.2 million in same period in 2012. Market share fell marginally to 13.1% 12
Canadian Market (cont d) An equal number of destinations recorded increases as did decreases. Canadians took 1.6% fewer outbound trips to places other than the US. Trips to the US increased by 4.3%. We need to pay attention to this shift. 13
European Market European arrivals to the Caribbean declined by 5.1% so far this year. 2.8 million tourists came to the region s destinations. Only 10 destinations showed improved numbers over the 2012 level. 14
UK Market 0.4% fewer British tourists came during Jan to Jul. There was a 4.1% drop in arrivals to the OECS countries from this market. CARICOM countries registered 1.7 percent fall-off in U.K. arrivals. However, visits by UK residents aboard have increased by 2.2%. 15
Thousands Cruise Tourism 3500 Figure 3: Monthly Cruise Passenger Arrivals 2009-2013 3000 2500 2000 1500 2009 2010 2011 2012 2013 1000 500 J F M A M J J A S O N D Month 4 of the 7 months (Feb May) this year recorded declines. Significantly, these months are largely within the high season. 16
Cruise Tourism 13.4 million passengers cruised the Caribbean up to the end of July Mixed performances across destinations resulted in overall marginal decline (-0.8%) 17
Cruise Tourism (cont d) 10 countries showed falling numbers, including countries which did well last year, namely: Sint Maarten, Curacao, Jamaica and the Cayman Islands. 18
Cruise Tourism (cont d) CRUISE PASSENGER ARRIVALS BY SUB-REGION (%Change) 2009 2010 2011 2012 2013 Northern Caribbean 13.6 16.3 10.0 5.1 2.7 Eastern Caribbean -0.6-3.9 5.5 3.0-4.8 Southern Caribbean 4.0 14.4-3.9-5.6-5.6 Western Caribbean -3.3-7.6 15.2-0.9 1.4 Total -1.6 0.5 8.6 2.0-1.0 19
Hotel Performance Table 5: Caribbean Hotel Performance 2009-2013 (January-August) 2009 2010 2011 2012 2013 % Chg Percent Room Occupancy (%) 65.4 65.5 65.9 70.0 71.1 1.6 Average Room Rate (US$) 157.56 166.07 171.52 180.75 191.44 5.9 revpar (US$) 103.08 108.81 113.05 126.85 136.09 7.3 % change Room Revenue -21.5 6.3 5.7 9.1 8.1 Notes: The information contained in this table is based upon independent surveys and research from sources considered reliable but no representation is made as to its completeness or accuracy. Copyright: 2011 Smith Travel Research All major hotel performance indicators were positive to the end of August. 20
In 2013, 61% of Caribbean air seat capacity will be from/to the U.S. Mainland; Europe will account for 17% of the capacity Published 2013 Caribbean Capacity by Region Full Year 2013 Scheduled Seats Source: Sixel Consulting South America 7% Central America 5% Canada 10% Europe 17% U.S. Mainland 61% 21
The Dominican Republic, Puerto Rico and Cuba will account for 48% of air seat capacity to/from the Caribbean in 2013 Published 2013 Caribbean Capacity by Destination (All Regions) Full Year 2013 Scheduled Seats Source: Sixel Consulting Barbados 3% Haiti 3% Curacao 3% Trinidad & Tobago 4% St. Maarten 2% Martinique 2% U.S.V.I. 2% All Others 11% Dominican Republic 21% Puerto Rico 17% Aruba 5% Bahamas 7% Jamaica 10% Cuba 10% 22
American and JetBlue will account for Nearly Half of the U.S. Mainland Caribbean Capacity in 2013 Published 2013 U.S. Mainland Caribbean Capacity by Airline Full Year 2013 Scheduled Seats Source: Sixel Consulting AirTran/Southwest 6% Caribbean 4% Spirit 2% All Others 8% American 26% United 7% US Airways 10% JetBlue 23% Delta 13% 23
Capacity Share Legacy Carriers Now Operate Less than Two-Thirds of U.S. Mainland Caribbean Capacity U.S. Mainland Caribbean Capacity: Legacy Carriers Versus Low-Cost Carriers 100% 80% 60% 94% 94% 92% 89% 2003 2013 Scheduled Seats Legacy Carriers Low-Cost Carriers 85% 82% 75% 72% 68% 65% 63% 40% 20% 6% 6% 8% 11% 15% 18% 25% 28% 32% 35% 37% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 24
Key drivers shaping International Tourism Economic drivers: Rise in travel activity from BRICS. Changing spending behaviors. More visitors are demanding greater value for money. 25
Key drivers shaping International Tourism Technological drivers The most significant impact has been the internet and growth of online travel. Development of mobile applications. Rise of social media shifted power to consumers e.g. TripAdvisor, Twitter etc. 26
Emerging Economies Advanced Economies Projected Economic Growth in Major Source Markets Table 2: Economic Outlook projections Source Market 2013 2014 USA 1.2% 2.6% Canada 1.6% 2.2% U.K. 1.4% 1.9% Euro Zone -0.4% 1.0% Brazil 2.5% 2.5% Russia 1.5% 3.0% India 3.8% 5.1% Source: IMF China 7.6% 7.3% South Africa 2.0% 2.9% 27
Projected Tourism Growth in Caribbean Prognosis Bedeviled by protracted global recession. Stiff competition in international arena keeping prices under pressure. Based on current trends I% is our most optimistic expected increase by year end. Indications are that 2-3% growth in 2014 is the best to be expected in this economic backdrop. 28