The tourism sector and the global economic crisis: development implicatins for the Caribbean

Over the past two years the global economy has experienced substantial economic turmoil, resulting in severe economic contraction. While there has been a recent return to growth, this situation has impacted all economic sectors worldwide. In the highly tourism-dependent region of the Caribbean, the impact of the global economic crisis has been most notable on the tourism sector, which, from the early 1990s, became the key driver of economic growth for the region. The eventual emergence of this sector reflects an economic development history which was previously underpinned by the export of agricultural commodities, and subsequently by the adoption of the import substitution industrialization model as promulgated by Arthur Lewis. This was further stimulated by spectacular economic contraction in Caribbean economies during the 1980s as a result of changes in the global terms of trade for commodities, generally low levels of competitiveness for manufactured goods, as well as weak institutional and governance frameworks. Ultimately, many economies began to reflect fiscal and balance of payments constraints. By the end of the 1990s, too, evidence of declining competitiveness even in the tourism sector began to become apparent particularly when evaluated under the framework of the Butler Tourism Area Life- Cycle (TALC) model. The recent economic crisis, therefore, provides an opportunity to reflect on the overall approach to economic development in the Caribbean, and to assess the implications of the region’s response to the crisis. This analysis makes the case for the future development of the sector to be based on two broad strategies. The first is to deepen the integration of the tourism sector into the broader economy through the diversification of the regional tourism product, as well as the enhancement of linkages with other sectors, while the second is to expand the tourism sector into a total service economy through the introduction of new services. Considering linkages, the development of clusters and value chains to support the tourism sector is identified with respect to agriculture and food, handicraft, and furnishings. Among the new services identified are education, wellness, yachting and boating, financial services, and information and communications technologies (ICT). This overall strategy is deemed to be better suited to the macroeconomic realities of the Caribbean, where high labour costs and other structural rigidities require a high-valued specialty tourism product in order to sustain the sector’s global competitiveness.

Saint Lucia: the Yachting Sector

This study is a measure of the impact of the yachting sector in Saint Lucia specific to the terms of reference as presented by the Economic Commission for Latin America and the Caribbean (ECLAC). This study is part of the project: Development of a Subregional Marinebased Tourism Strategy, co-funded by the Government of the Netherlands, which is aimed at the development of sustainable yachting in the Eastern Caribbean and focuses on the island arc from the British Virgin Islands in the north to Trinidad and Tobago in the south. This study was compiled based on information gathered through interviews, reviewing of existing data and current findings and observations in areas where data was not presented. This study reviews specifically the yachting sector, or pleasure boat industry, which can be defined as a complex set of activities that are required to sustain boating and cruising in Saint Lucia. These activities are emphasized by yachting tourists, who are visitors to the island, staying for more than 24 hours on their vessels. A comp