Business

Airlift, tourism infrastructure outlook positive?

BY CAMILO THAME Business co-ordinator thamec@jamaicaobserver.com

Wednesday, January 02, 2013    

Print this page Email A Friend!


SOME 8,000 planned hotel rooms are still on the table, but weak economic conditions have forced a review of the time frame for construction.

Soft economies in the main markets from which tourists arrive have also restricted tourism players in their ability to increase prices.

Meanwhile, arrivals at the Falmouth pier, which quickly took over as the number one cruise port when it opened in 2011 and which has seen tremendous growth for most of 2012, fell off dramatically toward the end of the year.

Like most industries, uncertainty seems to define how Jamaica's tourism sector will do this year, but there are a few bright spots — namely, increase in airlift from new markets and the possible start of major infrastructure as early as this year.

What's more, employment by hotels and restaurants trended higher last year than in 2011 — there were 81,700 people, or 1,400 more, employed by the sector in July than the same month in 2011.

By Evelyn Smith estimation, stopover arrivals — tourists who come into the island via airplane — would have ended 2012 some two per cent higher than the year before.

But the 40,000 more visitors to stay over at hotels, villas, apartments, and resorts in 2012 (1.96 million stayed over in 2011) would have allowed some operators to improve occupancy levels, while others still remained challenged.

"Major economies from where visitors come continue to have challenges," said the Jamaica Hotel and Tourist Association president. "In a climate such as this, operators can't increase rates or, in some cases, discounting continues, albeit not as deep as a few years ago."

Indeed the Bank of Jamaica's (BOJ's) estimated Bank's Tourism Implicit Price Index (TIPI) — a measure of prices in the tourism industry as reflected by average daily expenditure per tourist —showed that average spending was slightly down, or less than one per cent in the September 2012 quarter, when compared to year-earlier levels.

The performance of tourism in the earlier part of the year was due to the resumption of flights from Dallas and Fort Lauderdale by some airlines for the summer months as well as new airlifts from Cincinnati, Nashville and Toronto.

Increased airlifts associated with wholesale tour operators and Jamaica Product Exchange conferences pushed up arrivals toward the end of the year.

Importantly, the thrust to push non-traditional markets from which tourists arrive have begun to see results.

Arrivals out of Central and South America have already been growing at 50 per cent this year.

During the January to November period of 2012, almost 23,000 tourists from that region came to the island, up from 15,200 during the comparative period in 2011.

Moreover, the number of flights coming out of Latin America to Jamaica will double come the start of the winter tourist season.

COPA Airline will fly between Panama City's Tocumen International Airport and Sangster International Airport four times weekly.

The winter season runs from December 15 through to April.

This will be in addition to COPA's regular service from Panama City to Kingston four times per week.

Apart from increasing airlift, visa restrictions from Venezuela, Panama and Colombia were also lifted.

Tour operators will also be flying charters out of Moscow, Russia and the Czech Republic during this winter tourist season.

The Russian flights are expected to carry 300 passengers per trip, which run for 10 nights, while another 100 are expected per rotation from the Czech Republic.

"We would like to know that these flights can go past March and extend into summer months," said Smith, who believes increased arrivals through to the summer months can help the local industry attain better occupancy levels.

Cruise passenger arrivals, which grew by 32 per cent for the first nine months of 2012 and which will likely end the year higher than 2011, started to decline since October.

Twenty-nine thousand less cruise passengers arrived during the two months to November, representing a decline of 19 per cent when compared to the corresponding period in 2011.

Ship calls actually from 68 to 53, with most of the decline occurring at the Falmouth pier.

Ocho Rios' port — which was already seeing decline throughout the year — received 13,000, or 20 per cent less, passengers as ship calls dropped from 27 to 21.

Montego Bay, only faltered in October, when 3,000 less passengers and one less ship arrived. And even though it received one less ship November, 800 more passengers arrived than in November 2011.

Falmouth, on the other hand, saw passenger count drop by 24,000 or 24 per cent (most in November) while ship calls dropped from 24 during October to November 2011 to 16 during the two-month period last year.

Still, the fallout in Ocho Rios has been most impacting.

"Ocho Rios sets off a ripple effect on the eastern end of the island — St Mary and Portland," said Smith.

She said that the bigger attractions in Ocho Rios would get tourists arriving at Falmouth, but with a large falloff in passenger count at the St Ann cruise destination, which began in 2011, attractions running farther east are less likely to benefit from Falmouth.

New taxes on the tourism sector were implemented last year, including a guest accommodation tax of US$1 to US$4 per room per night, depending on the size of the hotel.

But the JHTA head said that the challenges continue to surround high electricity cost and weak external economies as well as the occasional natural event, such as Hurricane Sandy, which mostly hurt smaller operators in the eastern end of the island.

"We continue to be resilient despite escalating cost, natural disaster and taxation," she said. "Some members continue to grow and expand."

Indeed, Jamaica's room stock of approximately 28,000, excluding 3,300 that belong to the 50 or more closed properties, stand to increase significantly in the not-too-distant future.

The question is, however, when?

Excellence Resorts plans to construct four hotel properties with a total of 1,650 rooms in Trelawny, while the US$2.5-billion Harmony Cove Resort (also in Trelawny) is suppose to add a total of 5,000 rooms.

The first phase of the mega project, which is a joint venture between the Government and the Tavistock Group, is once again scheduled to begin this year, with a budget of approximately US$900 million and a completion time of three years.

But the original agreement was signed in September 2006 and plans are yet to leave the drawing board.

Nevertheless, other major projects — which are earmarked for tourism enhancement — are more certain to start this year.

Key among them is the 230-kilometre, multi-lane motorway that will connect the capital of Kingston in the southeast of Jamaica with the tourism centres of Montego Bay in the northwest and Ocho Rios in the centre of northern Jamaica.

The highway, which is to be built by China Harbour Engineering Company at a cost of US$600 million, should see the leg that bypasses Mount Rosser completed by December, while the legs of either side of the winding, steep hill should be completed by the end of 2015.

ADVERTISEMENT

POST A COMMENT

HOUSE RULES

 

1. We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper – email addresses will not be published.

2. Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.

3. We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.

4. Please do not write in block capitals since this makes your comment hard to read.

5. Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed: advertising@jamaicaobserver.com.

6. If readers wish to report offensive comments, suggest a correction or share a story then please email: community@jamaicaobserver.com.

7. Lastly, read our Terms and Conditions and Privacy Policy



comments powered by Disqus
ADVERTISEMENT
ADVERTISEMENT

Poll

Did the NWC prepare adequately for the current drought?
Yes
No


View Results »


ADVERTISEMENT

Today's Cartoon

Click image to view full size editorial cartoon
ADVERTISEMENT