Jamaican Retirement Tourism — An opportunity beckons
IN recent weeks we have been running a series of articles, contributed by PricewaterhouseCoopers, on the worldwide retirement tourism industry. This week, our fourth article, looks at some of the economic and social opportunities that the retirement tourism industry would offer Jamaica.
The rhythmic ocean is inviting as it washes up on the pearly white shore. The trees dance in the sea breeze as One Love plays from a radio perched on the craft vendor's stall. In the vendor's right hand, is a wooden-carved Bob Marley statuette, which he passes to a tourist clad in black, green and yellow. The tourist is visiting the island for the first time and thinks the picturesque destination is wonderful! WELCOME TO JAMAICA reads the brightly painted sign across the road from the craft market, as the tourism town bustles with activity.
Every year in the last five years, over a million tourists visited Jamaica to unwind, relax and bask in the sun, most of them from North America. About 27 per cent of the tourists that visit the island are over 50, a significant percentage that has grown rapidly in the last 5 years. This growth in arrivals from the mature market is consistent with the increasing trend of retirees opting to travel abroad. This trend will become the norm as the number of Baby Boomers, persons born between 1946 and1964, approach retirement.
Hundreds of thousands of foreigners retire abroad each year. Approximately 80,000 Americans retire in Mexico and over four million Canadians spend the winter months in Arizona, Florida, the Caribbean or Latin America. According to the Washington Post, approximately 7 million Americans and Canadians are living abroad. Clearly then, the thought of selling Jamaica as a retirement destination is not far fetched.
The Demand for Retirement Tourism Exist
Retirees are demanding comfortable and secure housing commonly referred to as retirement villages/ communities. These retirement communities differ from retirement homes which may be a single building or small complex where no "common areas" for socialising exist. Many retirement villages have special facilities that cater to the demands of retirees, including amenities like swimming pools, clubhouses, golf courses arts and crafts, boating, trails, and on-site medical facilities.
The option of settling in retirement villages has become more popular in North America, as has been evidenced through the proliferation of retirement villages across the US and the creation of Certified Retirement Community programmes in six states, involving over 70 towns and communities. Nevertheless, with buy-in prices of up to US$1,400,000 and typical monthly service charges of between US$1,500 to US$4,000, a large proportion of the market in the US is unable to meet domestic price points. This has created a latent demand for high quality retirement villages with affordable prices, and thus a market opportunity for several countries in the Latin American and Caribbean region. In this regard, a few Latin American countries such as Mexico, Panama and Costa Rica have been successful at offering incentives and retirement programmes that target retirees from North American markets. In addition to these incentives, retirement villages have been developed to comfortably accommodate the score of retirees who hope to live their remaining lives in comfort at a higher standard of living than they could hope for in their home countries.
The obvious purpose of these retirement incentive programs is to encourage economic development. Bill Haas of the University of North Carolina's Institute for the Future of Retirement estimates that the economic impact of a retiree household moving to a state is the equivalent of 1.4 factory jobs. Many would argue that it's a win/win situation for the retirees and the retirement destination. The benefits increase especially when the retirees settle in a retirement village. The retiree benefits from a living experience shared with people their own age with the same type of living conditions and interests in mind. Further, any healthcare needs can be directly taken care of, with modern healthcare facilities based on or near the site. The retirement destination benefits in that jobs are created in the areas hosting these villages through the employment of gardeners, housekeepers, caregivers and a host of other functionaries. The local community also benefits; as groceries, bankers and entertainment attractions, restaurants etc earn additional revenue in meeting the needs of residents. The multiplier effect does not stop there, but innovative businesses that have done their market research can create spin off industries or products that cater largely to retirees. These may include agriculture, financial services, attraction development, health tourism including spas etc. Increased activity in these communities may attract greater investments and more foreign visitors to retirement destinations.
Why Not, Jamaica?
Jamaica has nothing to lose and everything to gain if it were marketed as a retirement destination. It goes without saying that Jamaica's close proximity to North America, excellent air-links and year-round tropical climate make us the quintessential retirement destination. We also have many underlying structural advantages that make the island commercially attractive for the development of the retirement tourism sector. First and foremost, our infrastructure and labour pool is already focused towards servicing tourists; so why not retired tourists? We are endowed with a large pool of low-cost trainable labour. Our country has modern and affordable medical facilities, a critical factor considered by a retiree looking to relocate. An important development on this note is that the Hospiten Group, a company which has established and operates hospitals in several countries, is shortly expected to obtain approvals to build a modern hospital facility in Montego Bay that will complement the existing health care facilities, and play a key role in developing Jamaica's second city as a hub for the 'health' tourism industry. When completed, this hospital will further add to the island's appeal as a retirement destination.
Although attracting retirees to Jamaica represents a clear opportunity for economic and social growth, there is still sparse legislative and marketing support to actively encourage retirees to come and live in Jamaica. To put this into context, we should bear in mind that the Jamaica Tourist Board goes to great lengths (quite successfully I should add) to attract tourists to visit the country for an average of nine days a year. It seems logical therefore that we ought to jump on the opportunity to encourage people to live (and of course spend) in Jamaica all year round ("We've got "Visit Jamaica" anyone for "Live Jamaica"?) Furthermore, from the legislative perspective, there are currently no incentives or facilitation services to encourage non-Jamaicans to enter the country on an extended basis for the purposes of retirement. In short, much more can be done to encourage the development and growth of the massive and steadily growing retirement sector. Improved marketing as well as the introduction of supporting legislation would not only serve to position Jamaica competitively in this highly lucrative industry, but would also serve as an all-important catalyst to encourage much-needed investment in this new growth sector.
This article was written by Darren Singh and Keisha Tingling, of PricewaterhouseCoopers. For further information, contact email@example.com.
Next week we publish the final article in our series of five. In the article we imagine ourselves in the year 2020, looking back at the benefits that the successful promotion and development of the retirement tourism industry has given to Jamaica.