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ugh Riley, secretary general of the Caribbean Tourism
Organization (CTO), has 28.7 million reasons to be happy.
That’s the number of visitors who arrived at Caribbean des-
tinations in 2015, up 7 percent from the previous year. Riley
is pleased that the pace of growth in the Caribbean is keep-
ing up, if not surpassing, other major tourism regions. “This perfor-
mance was above the global rate of growth, which the World Tourism
Organization quotes at 4.4 percent,” he says.
This was the second year in a row that the region outperformed the rest
of the world, and the sixth consecutive year of growth for the Caribbean.
Not coincidentally, the Caribbean has also been more likely than
other destinations to be named when airlines have announced new
flights. In the first few months of this year, JetBlue (see sidebar), Air
Europa, Cape Air, and regional carriers such as LIAT have all announced
expanded service to the region. That’s in addition to new flights
announced last year by those carriers as well as American Airlines,
Norwegian Air, and others. Martinique, for example, had a 193-percent
increase in airline capacity traveling to the island nation during the peak
December 2015-to-March 2016 period over the previous year.
Clearly, the Caribbean is hot in more ways than temperature. But
why now?
Sunny Skies
“The Caribbean is always top of mind as a vacation destination,” says
Marcos Agostini, Interval International’s senior vice president of sales
and business development for Latin America. “You have 32 island
nations, each with its own identity and appeal. Now, there’s even more
demand coming from the U.S., along with expanded demand from Latin
America as economies in the region are growing their middle classes.”
According to the CTO, South American countries generated 2.1 mil-
lion visitors to the Caribbean in 2015, an 18.3-percent increase over
2014. The main markets within South America are Venezuela, Brazil,
and Argentina, in that order.
Copa Airlines, which is based in Panama City, Panama, has aggres-
sively expanded its service to the Caribbean, adds Frank Comito, CEO and
director general of the Caribbean Hotel and Tourism Association (CHTA).
This increased airlift means traveling to the Caribbean is also much
more convenient. “With better connectivity, what was a seven-hour jour-
ney becomes a three-hour flight from the eastern U.S. and Latin
America,” Agostini says.
Caribbean nations have made substantial improvements to their air-
ports and infrastructure, making them more attractive to airlines. “Over
the past five years, there has been considerable growth in airport
expansions,” Comito says. “Governments are eager to attract more
flights to pay for those investments.”
But perhaps the biggest factor is cooperation between airlines, gov-
ernments, and tourism groups to market the Caribbean as a destination.
“Research shows that increased frequency drives
demand,” Riley says. “However, destinations, travel pro-
fessionals, vacation packagers, and the airlines all play
an essential role in raising awareness and creating
demand.”
The CTO, for example, provides reliable data on
which to analyze the industry, and generates useful mar-
ket intelligence. The group’s aviation task force also
plays a role by focusing on improving the passenger
experience, reducing the cost of travel, ensuring passen-
ger safety and security, and modernizing the legal and
regulatory framework.
The CHTA and hoteliers also collaborate with airlines,
airport authority, ministries of tourism, and ministries of
finance. “When all of those players are working together,
it really creates the best economic situation to stimulate
travel for the airline,” Comito says.
More flights will mean more visitors, according to Dave Clark, vice
president of network planning at JetBlue. “We absolutely stimulate more
demand,” he says. “There’s a lot of publicly available data, where when
we add flights, demand ramps up. Of course, we need to do it in part-
nership with destinations because people need a place to stay when
they get there. We can’t add an infinite number of seats without consid-
ering hotel growth.”
Long-Term Outlook
Whether increased airlift increases demand or increased demand brings
more airlift, everyone seems to agree that lowering costs makes flights
more attractive. Without changes to tax policy, however, there’s little
wiggle room. “If you add the taxes in the destination to the U.S. tax —
which isn’t small — that can amount to half the price of the ticket,” Clark
says. “In those situations, the taxes artificially inflate the price of what
the customer has to pay for an airline seat and will depress demand.”
Comito agrees. “By increasing fees, you lose airlines and you lose
arrivals — that has been proven over and over again. The goal is to have
the policy that makes the most sense for all the stakeholders, not to take
money out of government coffers. If we can find ways to stimulate
travel, the increased arrivals will lead to increased spending and more
economic growth.”
The International Air Transport Association has called on govern-
ments and aviation stakeholders in Latin America and the Caribbean to
work together to harness the power of aviation connectivity to drive
economic growth. “There are 130 different ticket taxes in place across
the Latin America and Caribbean region,” says Tony Tyler, the group’s
director general and CEO. “They increase the cost of connectivity for
businesses, individual travelers, and potential visitors. Ultimately, they
limit the ability of aviation to catalyze economic growth, shortchanging
the economy as a whole.”
Security concerns generated by the terrorist attacks in France and
Belgium could lead to more vacationers choosing the Caribbean in the
near term. “Vacationers from the U.S. and Europe may see the
Caribbean as an even better alternative this year,” Agostini adds.
The biggest boost in 2016, though, will probably stem from
increased U.S. travel to Cuba. As result of a U.S.–Cuba agreement
signed in February, several airlines are urging the Department of
Transportation to award them round-trip flights to Havana for a total of
up to 20 flights per day. At press time, decisions on which airlines will
be awarded those flights are expected later in the summer. American
Airlines, Frontier Airlines, JetBlue, Silver Airways, Southwest Airlines,
and Sun Country Airlines were approved as of June to fly from five U.S.
cities to nine Cuban cities other than Havana.
Judy Kenninger, RRP, heads Kenninger Communications and has been
covering the shared ownership and vacation real estate industries for nearly
two decades.
When it comes to the Caribbean, JetBlue is
all in. “We absolutely think of the Caribbean
as a big, important strategic region for us,” says JetBlue’s Dave Clark. “It’s been one of our
two biggest growth areas for the past five years, and now 30 percent of our capacity is to
the Caribbean and Latin America. If you look at U.S. airlines, the percentage of our flights
that are in the Caribbean is well more than double that of other carriers.”
JetBlue plans to add greater connectivity from airports it already serves in the U.S.,
such as Fort Lauderdale, to the islands.
The carrier has deviated from its former one-tier service model to add flights with pre-
mium service, which it calls Mint. The Caribbean is an important part of this strategy, too.
“We’re serving not just price-sensitive customers, but also the very high-end clientele,
getting people out of private jets when they go to places like to Barbados and Aruba.”
The initial response to Mint has been extremely positive, and more flights are coming
soon, Clark says. No surprise there.
H
MINT
CONDITIONS
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