For the period January 1 to August 31 this year, Jamaica welcomed a total of 2.09 million visitors which netted the country US$1.5 billion. Speaking at the official opening ceremony of the 21 st Jamaica Product Exchange (JAPEX) tourism trade show, minister of tourism Edmund Bartlett said:
"Despite the looming global economic crisis and the many other challenges we face, our arrival figures continue to climb. Provisional figures indicate that there was a 5.7 per cent increase in total visitors between January to August of this year with 2,098,964 arrivals compared to the 1,985,784 recorded for the same period last year.
"Up to August Jamaica had earned US$1.480 billion which represents a 3.4 per cent increase over the US$1.432 billion we earned for the same period in 2010."
Since 2007, tourism arrivals have increased year on year despite the global economic downturn. Barlett and the team at the Jamaica Tourist Board headed by John Lynch have worked tirelessly to drive up arrivals and improve the product. They have had to contend with a fiscally constrained government and be very creative with their marketing efforts. Bartlett has stressed the importance of the supply side and the boost this would give to Jamaican suppliers who would not have to focus solely on exports. He has also gone in search of new markets as both North America and Europe has seen their respective economies failing.
In order to meet increasing demand, Bartlett has called for a greater room count to accommodate growing arrival numbers. In fact, tourism under Bartlett's tenure has been one of the positive bright spots on the local economy.
Last Friday, at the Palmyra Resorts and Spa in Montego Bay, online travel company Expedia gave a presentation on Jamaica. According to Expedia, 84 per cent of personal travelers use the Internet to plan their travel. The company gets over 50 million unique visitors every month and last year took in over US$26 billion in gross bookings. In the second quarter of this year its revenues were up 23 per cent with Jamaica up by 8 per cent which equates to US$30 million. In June of this year Expedia attracted 86 million visitors to its sites. It accounts for 50 per cent of all the vacation packages booked online.Expedia has 100 websites in over 60 countries and has partnered with Jamaica for 10 years now representing 135 hotels, twice more than the average online travel company. Expedia carries the widest range of hotel product across Jamaica and three to four times more than the traditional wholesale model.
Speaking at the presentation, Bartlett said it is important that from time to time the country gets a key report from its partners to ascertain how it is performing and what are the key indicators to look for to enhance the process of growth.
"It is important to see where are earnings are because tourism is for us the single most important generator of foreign exchange on the industry side. The other big generator is on the remittance side which is as you know the savings of somebody else which we benefit from. Therefore tourism has to more than hold its own. It has to grow ,expand and contribute much more. It is very important to see tourism's contribution to GDP."
Jamaica has high ADRs
In room nights worldwide, Expedia was up 21 per cent while Jamaica was down a bit. The average daily rate across the globe is up 6 per cent while Jamaica is up by twice that at 12 per cent. Jamaica is seeing aggressive growth in the hotel daily ADRs. Here it leads the region. For 2010, Jamaica's site brought in US$50 million. Expedia tends to sell a higher ADR than the market. Expedia sees ticket prices to Jamaica are up considerably and this could be a deterrent to traveling to Jamaica.
Competing in the region
For the year under review, Expedia sold 75,000 rooms in the Dominican Republic, 65,000 in Cancun and Riviera Maya combined and 31,000 in Jamaica.
Dominican Republic has many rooms which allows them to be very aggressive on price points and on hotel and airfares. It has embraced the power of the all-inclusive concept. Many of its EP hotels are moving to become all-inclusives.
In the Expedia Caribbean segment, in terms of room nights up to July of this year, Jamaica is third and is showing good growth. However the Dominican Republic has led the way and is taking visitors away from Jamaica.
Expedia sees Jamaica with a good mix of products but spots a weakness in the stagnant growth of the United States economy. Most of Jamaica's business still comes from there and so it is taking a big hit from a market that has sustained it for decades. When the United States doesn't spend it directly affects Jamaica. Expedia believes that Jamaica has to now grow its international mix. It notes the capacity cuts in some of Jamaica's key markets this year were extreme. While there was a cut in capacity, at the same time there was an increase in costs. Last year saw 80 per cent of Jamaica's business come from a combined vacation package with airfare. This year Expedia is seeing a shift and says this may be due to capacity changes and airline ticket prices. Expedia is seeing people just buying the hotel room alone and not a package. Nevertheless Expedia sees Jamaica as doing a good job of maintaining its brand presence. Jamaica really took off for Expedia at the end of 2009/early 2010 but it does see Dominican Republic and the APD tax as threats to Jamaica's product. Also plane ticket prices are going up and a plane fare to Montego Bay is within a US$100 of that of the Dominican Republic and more expensive than Cancun. There is a clear correlation between the capacity and ticket price and with Jamaica, Expedia sees capacity going down while ticket prices are going up. This affects the number of packages sold. Looking at future airline capacity more specifically over the next six months, Expedia sees Jamaica capacity from the United States down through February by about 5 per cent while United States capacity to the rest of the Caribbean is likely to be up by 5 per cent through the next six months. It also sees challenges for the region with ticket prices with Caribbean Airline Ticket Pricing (ATP) increasing year on year by 10 per cent. Over the next six months Jamaica's ATPs is set to go up by 14 per cent.
So where are all these people who are buying tickets coming from? The United States still leads room nights with 83 per cent, followed by Canada at 11 per cent and then UK/Europe with 6 per cent. Year on Year room nights sees the United States down 5 per cent, Canada up by 39 per cent and the UK up by 46 per cent.. Japan had 401 room nights which is up by 65 per cent and Australia had 387 room nights which is up by 52 per cent. Interest is picking up from Brazil, Australia, Japan, Italy, Sweden and Germany.
A look at bookings over the past 12 months for Jamaica shows ADRs and net room nights trending downward. September of last year proved to be a tough time for the region. However from July to November, registered incredible growth, which began to fall off due to falling capacity and ADR increases from the hotels spiked by 16 per cent in April. Jamaica's tourism team began a creative marketing campaign with Expedia in June of this year which saw room nights up 20 per cent. Last month's Tropical Storm Irene did have a negative impact on figures but nevertheless Jamaica continues to see positive bookings. Growth in ADRs means everybody makes more money.
Revenue for Jamaica bookings up 8 per cent
There has been the suggestion that with the downturn in the United States economy, Jamaica must look to new markets if it is to continue to see its tourism numbers rise. Director of Tourism and Chairman of the Jamaica Tourist Board John Lynch takes the point but stresses that airlift is vital and that there are visa restrictions and cost challenges to overcome.
Expedia's director of lodging for the Caribbean Demetrius Canton said: Over 1.2 million travelers used Expedia sites around the world to book their trips to the Caribbean in the past year. We are dedicated to working with our partners in Jamaica to grow that number in the years to come.
Revenue for Jamaica bookings were up 8 per cent, while average daily rates are up 12 per cent. Both are encouraging signs about the opportunity for the destination."