Can a high price, low quality industry rescue itself?

The IMF’s Country Report of January 2011 inspires quiet introspection while it raises vexing questions: Why are our brightest sons and daughters so happily uninformed about political decisions taken in our name? Why do we so often fail while other countries in many ways similar to ours, and obviously less endowed, succeed? Why do we spout nonsense about our sovereignty and our independence yet cannot survive but for the kindness of strangers? Will we ever face up to the fact that Saint Lucia is not New York, neither Miami nor London?
According to the cited report, tourism has been the most significant contributor of long-term growth for the Eastern Caribbean and helped to offset the negative impacts of geography and being small. The paper reveals that over the period 1970-2007 tourism played the most significant role in the growth of the ECCU, with arrivals higher than the world average—which added 5.0 percentage points to growth in the ECCU.
“At the same time,” the report points out, “growth in the ECCU has been lower by 0.3 percentage points and 3.1 percentage points on average because of being small and given the island geographical nature of the ECCU respectively. The relatively high investment ratios (about 15-20 percent on average) and low inflation in the ECCU have also been positive contributors to growth.”
“But specializing in tourism has been the most advantageous,” says the report, “and indeed has offset some of the limitations that come from being a small island economy (for example, remoteness, higher transportation costs, diseconomies of scale). “
Clearly gung-ho on tourism, the IMF report underscores “the positive relationship” between average real GDP growth rate during 1981-2007 and tourism concentration in 1981, “where tourism concentration is measured as tourist arrivals or tourism receipts normalized by population or land size. This implies that the tourism sector on average brought higher economic growth for those countries which developed this industry at an early stage.”
For example, there were Antigua and Barbuda and St. Kitts-Nevis, which “switched from an agriculture-driven economy to a tourism-based economy early on.” The islands had on average “grown at about four-and-a-half percent during this period, compared to an average of under three percent for Dominica—which had remained mostly an agriculture oriented economy.”
While in tourism loss of market share in arrivals is often interpreted as a loss of competitiveness, the paper explains, it may also reflect a shift in strategy from mass tourism to upscale tourism, resulting in higher tourism receipts. “Hence, changes in market shares in arrivals are assessed in conjunction with changes in shares of tourism receipts from 1990-95 to 2005-2008.”
The results suggest: Antigua and Barbuda, and Grenada have seen declines in both arrival and receipt shares—a clear indication of loss in competitiveness. St. Kitts-Nevis and Saint Lucia have recorded increases in shares of arrivals but declines in shares of receipts, which may reflect a shift toward mass tourism achieved through cost and price-cutting, provided that the loss in share receipts is temporary. “Otherwise it may reflect a loss of competitiveness as the countries are not earning income proportional to the number of visitors they host!”
Anguilla, Dominica and St. Vincent and the Grenadines have recorded increases in shares of both arrivals and receipts, indicating improvements in competitiveness.
The report blames higher prices and low quality—not limited room supply!—as the main reason for the loss in market share by ECCU countries within the Caribbean.

“Between the periods 1990-95 and 2005-08 the ECCU has gained shares in room supply within the Caribbean. Nevertheless, the price charged per room is relatively high in some ECCU countries, with Antigua and Barbuda having the highest hotel prices in the region. This may explain the loss in the shares in both stay-over arrivals and tourism receipts.
“On the other hand, St. Kitts-Nevis and Saint Lucia have lost shares in tourism receipts, even though they have gained some market share in stay-over arrivals, reflecting perhaps lower average hotel costs. Anecdotal evidence indicates that enhancing the quality of services and diversifying the kinds of services would give a boost to the tourism sector.”
Meanwhile, I’m praying for a small miracle: Dear God, just this once, please prove Einstein wrong. Let the tourism problems confronting Saint Lucia be resolved by the same retards that created them! As for the umpteenth time I reconsider the election promises of the incumbent and opposition parties, reality hits home: their respective election manifestoes are both products of the same cobwebbed mind. On the one hand, there is this from the Blueprint for Growth, where it refers to a stronger tourism industry:
“The SLP is convinced that tourism will remain a major [not the major?] contributor to economic development, employment and export revenue in Saint Lucia for the foreseeable future”— as if after ten years of multi-million-dollar promotions that went nowhere the party’s belief in baseless belief were not already common knowledge. “We will ensure that tourism development is afforded high priority in the development agenda.” (When wasn’t it afforded “high priority?”)
How? By repeating what had been done for the last three decades without useful change: by “creating more linkages in the tourism industry to ensure that economic benefits are balanced and accrue to as many people as possible.” Good, but doesn’t that require a viable industry capable of delivering those economic benefits?
Then there is this stale crayfish in fresh wrapping: “The SLP government will re-examine and improve the Tourism Incentive Act to provide new and additional incentives to small hotels, guest houses and for the development of tourism ancillary services.” But already we know room availability and ancillary services are not the problem, right? Rather, it’s the cost to the visitor that needs improving. Besides, might someone have mentioned the coming of VAT with its several implications for local tourism?
Better to stick to familiar ground: “We will build on what we started during Cricket World Cup and create a unique heritage tourism experience.” Way to go, guys, way to go: spruce up the old structure, a new coat of paint here, a new fence there, a two-headed goat, and voila: “A unique heritage tourism experience!” (By the way, when it
comes to “heritage areas,”
the experts agree Saint Lucia trails St Vincent and the Grenadines and Dominica. Just saying.)
Here, now, the UWP vision, as contained in the party’s manifesto entitled The Power of We: “Our goal is to develop a world-class, high-end tourism destination with a well diversified and competitive tourism product with strong linkages [that word again!] to agriculture, manufacturing and other sectors as we transform Saint Lucia into the number one destination in the Caribbean. We aim to double the number of stay-over visitors to our country within the next five years and increase by at least 50 percent the contribution of tourism to our GDP.”
How exactly? How do you link one almost not there industry to another that exists only in the imagination? You “streamline the budgetary resources earmarked for tourism marketing; refine marketing approaches; deepen Saint Lucia’s presence in the established source markets; expand into Latin America and elsewhere; aggressively seek additional airlifts . . .” Yes, piece of cake!
But already you’ve taken the point, dear long-suffering reader: the cited election manifestoes offer nothing new or relevant. Same old same old, regardless of party color—while the drunk dance their drunken dances in the street to carnival sounds they alone can hear. (By the way, remember those better days when VAT was a blended Scotch whisky?)
Our usual problem solvers have at the usual high price prescribed the usual remedy: tourism diversification and analytical studies of new attractions and packages. They advise that tourist boards should convene meetings of hotels and tour operators “to discuss packages and public relations-advertising programs to market them.” (Please people, tell me that’s the one thing no one can say we haven’t tried!)
Additionally: “Governments will be expected to contribute toward core budgets for these programs but donor assistance should be sought for the initial promotion.” (For sure, that’s new!) Tourist boards should undertake intensive programs of public education to sensitize local publics to the importance of the new tourism strategies for local economies and to solicit their full support in marketing the packages.
Additionally: “Determined efforts should be made to find new markets, e.g. Eastern European members of the EU, Southeast Asia and high-income sectors in Latin America. (At least we know now where Kenny got the idea!) Of course, “charter services for these new markets should be explored.”
Not least of all: “All the OECS states already recognize the need to engage in vigorous promotion of local, regional and foreign investment in their tourism sectors. This would necessitate efforts by governments themselves to encourage product improvement and innovation and the maintenance of an environment free of crime and harassment.” Of course!
Obviously there is precious little in the cited election manifestoes indicative of our politicians’ familiarity with the current realities of the world economy, let alone the impact on now besieged former donor countries, borrowing, and travel—in particular, travel to one of the world’s more expensive destinations.
Disinclined as they are to read anything that does not resemble a paycheck, surely our peripatetic leaders know the U.S. and the UK are more than ever hell-bent on keeping their people at home! While the UK makes it more and more difficult to fly to Saint Lucia, American promoters of tourism are spending billions in the national effort to persuade citizens to forget expensive and dangerous zones such as ours in
favor of newly family-friendly Vegas and thousands
of other U.S. venues
that don’t require passports, visas, return tickets, and extra money for nuisances taxes—to say nothing about two-legged snakes in the
grass waiting to pounce at first sight of something
shiny on an unprotected white wrist!