With the tourism industry experienc-ing a crisis which threatens not only the viability of the sector but its ability to continue to be the country's leading foreign exchange earner and a major employer, calls have been made for government intervention to alleviate the stresses and save jobs.

Already the secretary general of the United Nations World Tourism Organisation (UNWTO), Francesco Frangialli, is advising governments the world over to provide financial assistance to hoteliers. Acknowledging that tourism is a primary revenue earner and a pivotal arm of the economy, it is therefore imperative that the government acts expeditiously to avert a calamitous blow to a sector that the country can ill afford to see severely diminished.

According to the president of Jamaica Hotel and Tourist Association (JHTA), Wayne Cummings, figures for the upcoming winter season look grim. He estimates that bookings are down 30 per cent and that is conservative. He pointed out that this could lead to a cash-flow deficit for many hotels as Jamaica is viewed as a mid-market destination and it is this particular market that will be the hardest hit by the global financial downturn.

Speaking with Caribbean Business Report earlier this week Cummings said: "Many of the high-end and low-end hotels should fare well but the mid-market will bear the brunt of the reduction in visitor arrivals. Top-end visitors are unlikely to make severe lifestyle changes and to date hotels who cater to that kind of visitor have not reported significant reduction in bookings. The lower-end hotels are expected to benefit from visitors on the lookout for bargains and those forced to curb their discretionary spend.

"We cannot afford to lose the momentum of the winter season as this sets the tone for the rest of the year. You no doubt are aware that the winter season runs between December 15 and April 15."

According to Minister of tourism Ed Bartlett, tourism has raked in some US$1.6 billion to date and he expects the figure to reach the US$2 billion target during the upcoming winter season. He added that since the start of this year two million tourists have visited Jamaica - 1.5 million in stopover visits and 800,000 in cruise ship visits.

Bartlett has remained optimistic about visitor arrivals and predicted a bumper year for 2009 but he may well have to temper this exuberance in light of the prevailing fore-boding numbers.

"We still remain on target for growth, albeit single-digit growth of between four to five per cent. We are now taking a critical look at the entire industry and will be looking to keep Jamaica competitive. We will not be responding in a knee-jerk fashion to the current world financial crisis. How will we respond? We will be making serious adjustments to our marketing strategy as a response to the new realities of the economic downturn. You can expect a major new appointment very soon.

"People should not despair, because tourism will not die.
Visitors to Jamaica will continue to look at price point and airlift capabilities as well as affordability. What we have to do now is pay greater attention to the quality of our attractions, appeal to the passions of the various visitors and concentrate on building niches so that the destination appeals to visitors in search of different kinds of experience and not just the tried and tested all-inclusive one," said Bartlett.

Speaking last week at the UDrive Association's AGM held at the Terra Nova All-Suite Hotel, Kingston, minister of finance, Audley Shaw's assessment of the sector went some way in supporting Bartlett's rosy optimism.

Shaw said that despite the dismal economic environment, tourism arrivals have been five per cent ahead over the comparative period last year.

"It is projected that up to December it will be 5.5 per cent over last year," declared Shaw.

David Jessop, writing in last Sunday's Barbados Advocate, said that the current crisis illustrates just how dependent the Caribbean is upon earnings from tourism.

"Visitors and what they spend now touch virtually every form of economic activity across the Caribbean," he wrote. "This means that it is no longer just the hotel owners or the employees who will suffer, but everyone, from the accountant and lawyer to the beach vendor who makes a living from the industry. Moreover, a recession touching tourism will have the dangerous slow-burn effect of causing tax revenues and foreign exchange reserves to fall, making it more difficult for government to fund social and other programmes and, by extension, maintain present levels of employment in the public sector."

Jessop's grim prognostication is that the region is about to enter a period of considerable economic uncertainty during which tourism will decline. He is of the view that while Jamaica's decision to diversify its product and marketing approach will continue to pay off and cushion it from the full impact, more common will be the experience of the Bahamas which is forecasting a six per cent decline in visitor arrivals this year and a slowdown in tourism development. This has lead to the IMF cutting its growth estimates for the country.

"Although some all-inclusive owners seem unfazed in public by the recession, there are signs that in private they, too, are becoming concerned as occupancy levels fall below the magic percentages that ensure that their cash flow and margins remain strong.

"As a consequence, some are believed to be pressing government for rapid concessions on taxation in order to maintain competitiveness," declares Jessop who is
the director of the Carib-bean Council.

Chairman of Sandals Resorts International, the largest all-inclusive hotel chain in the English-speaking Caribbean, Gordon 'Butch' Stewart, said that it is unreasonable to expect that the world financial crisis will not affect the tourism industry.

"We must act quickly like we did after 9/11," said Stewart. "The Jamaican Government must help the entire sector with assistance with taxes and utilities. This current crisis is far deeper than that of 9/11 and the Government should take a leaf out of UK Prime Minister Gordon Brown's book. He moved quickly to help that country's financial sector with an effective bailout plan that will go some way to resuscitate finance houses and restore confidence in them. The last thing we want to see is widespread redundancies in the hotel sector."

The president of the JHTA said that his body had presented the Government with a list of proposals that would go some way to alleviate the current predicament. These include:

. Waive GCT payment for six months beginning from October this year;

. Impose a deferment of statutory payments on the employer side and remove penalties for the next six months;

. A roll back on import duties on vital operating items again for six months;

. The Government should create a J$1-billion access fund so that hoteliers in need of short-term cash in order to weather this present storm could do so at rates at around five per cent.

To date, the JHTA has not heard from the Government on its proposals, but expects that it will do so in the very near future.

While many hotels report falling occupancy levels, many of the Spanish chains are reporting favourable figures. A leading hotel manager, speaking on condition of anonymity, surmised: "That may be so, but the Spanish hotels will have to revise their numbers going into next year because Europe is already in a recession. They are discounting heavily and that will hurt small Jamaican operators.

"No one points out that this strategy brings about an integrity issue. Once the recovery begins, and it will, tour operators will find it difficult to sell at elevated rates. Visitors become disgruntled and that damages the brand. You never truly recover from heavy discounting."

Earlier this week, one of Jamaica's greatest hoteliers, John Issa, chairman of SuperClubs, underscored the importance of the hotel industry to the Jamaican economy. Delivering the main address at the annual luncheon and awards of the Realtors Association of Jamaica (RAJ) at the Hilton Kingston Hotel earlier this week, Issa said: "It is widely accepted that our country cannot grow, prosper or even survive without a vibrant hotel industry. Its full potential has never been realised. It is also the only major industry that is so widely spread around the country. Its benefits are felt by almost every sector. So, if the hotel industry is so essential and important, why is the economy not so structured as to make it achieve its full potential, without needing so-called special treatment?"

Issa has long called for the hotel industry to be viewed as a major export driver and he
used his address to return to that theme.

"The tourism sector is being negatively impacted by many factors," he said. "However, testing times can also be times of great opportunity. In the case of tourism, it may finally create the conditions for the Government to do the right thing and to treat the hotel industry as the export industry, which in fact it is and has always been.

"I was very pleased when I read the Jamaica Labour Party's manifesto which pledged in Section 11.2 that if elected, the JLP government would give export status to hotel operators. Correctly giving export status to hotel operators would also have the socially beneficial effect of integrating this industry into our broader industrial base."

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