Letter: Innovation in tourism

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Dear Sir:

Mr David Jessop, consultant to the Caribbean Council, made the following observations in his article, “The new dimensions of tourism”, with regard to the future of tourism in the Caribbean.

There is a pitiably low level of retention of the tourism dollar within the regional economies. He refers this to the focus of the regional governments’ interest on the supply side of the industry and by extension the number of visitor arrivals. This, according to Jessop, has involved encouraging ever larger foreign investment in up-scale resorts – for example Baha Mar in the Bahamas – and incentivising new airlift to open new source markets and encouraging cruise ship calls.

We see this approach in Trinidad and Tobago in the plan to attract the Sandals Group to Tobago and the intent to expand the Tobago Airport building, possibly to also attract back Virgin Airlines. The game plan appears to be to attract larger numbers of tourists and benefit from the accompanying arrival taxes and others.

Unfortunately this approach, says Jessop, particularly so in the all-inclusive upscale hotels, does nothing to address the low level of retention of the tourist dollar within the Caribbean economies – now down to a low of US$0.15 in the dollar and US$0.40 at the high side. This suggests that the contribution of local production/effort is much smaller than what is demanded by the tourist even though one could say it is the region that created the tourist demand.

Mr Jessop recommends that tourism in the region should be less about attracting numbers of tourists and more about delivering lasting nation-wide social and economic growth, i.e. be of greater benefit to the small and medium sized businesses that make up some 80 percent of the regional industry. This is an important observation.

In this context let us examine the plan of this Trinidad and Tobago government to invite Sandals to Tobago to operate two of its branded hotels with infrastructure provided by the Trinidad and Tobago government. This does nothing for the small and medium sized businesses of Tobago. Allied to this, facilities will be built by this government to provide an upgraded airport terminal building.

Tourism provides an industry value chain, which a few powerful brands are rapidly moving to control throughout the world. The various modules of the chain include production/service, branding, market development, marketing and sales. The lowest rewards are provided by production/service while the highest by branding and market development.

The Sandals project in Tobago sees the government providing the production/service infrastructure for a rental (however it is termed in the contract) and the country receiving salaries/wages for service and whatever taxes – the lion’s share goes to the brand owners.

Still, we see the regional governments giving lucrative incentives – long tax holidays, waivers of taxes/duties on imports. Indeed, Sandals has aroused the ire of certain regional governments as to the unfairness of some of these incentives, the latest protagonist being the new government of Barbados.

What all of this is telling us is that accepting this kind of tourism as part of our, Trinidad and Tobago’s, diversification plan is simply not good enough, if it means that we remain at the bottom of the value chain with low retention of foreign exchange as our involvement with Sandals seems to suggest.

Jessop is telling us that we need to give some thought to the long term future of the regional industry and how we could utilise the present earning capacity of the industry, even at the bottom of the value chain, to create a sustainable economic base for the future.

This fits in with many of my pleadings with the government that we need to use some of our foreign exchange earnings to move general industry up the value chain. Hence we need to look elsewhere, away from the branded hotels.

We need to find innovative ways to differentiate ourselves and so inject ourselves higher up the value chain on this global industry. We need to attract tourists who are coming for what differentiates us from others with as good a climate.

This differentiation has to be about our people, how we live, play, our culture, which will have the tourists live and be entertained in the communities where the tourist dollar will remain. Hence, the talk about cultural, festivals, sport, music-tourism is significant.

Though many of the items that could differentiate our brand of tourism exist, they are disparate, un-coordinated, un-integrated in what should be an inter-connected business system. One can apply the theory of a national innovation system to this local industry. It is immediately obvious that some major institutions are missing.

For example, it will require a central institution that does the research, design and construction of this integrated business model and so derive its acceptance by the public. This then drives the details of the business and formulation of the other entities- the branding, market development, marketing, finance, infrastructure, programming of events, co-ordination with other allied entities (e.g. transportation on land and airlines).

Since the basic idea is to bring visitors to our shores to experience our culture, how we live, our history, our food, our tourism innovation system, via its market development and marketing, has to be intricately linked to the global tourism industry and to its innovations, e.g. Airbnb that can bring visitors directly into the communities.

In Trinidad and Tobago, Carnival, St James We-Beat, Hosay, sport, jazz, dragon boat, goat and great races and music festivals etc. etc. all become items of the year-long pre-planned programme of the tourism canvas.

Mary K King
St Augustine
Trinidad

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