Can Caribbean Tourism Solve Its Problems?

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The first of three major hotel investment conferences focused on the Caribbean will be held this week in San Juan, the business, transportation and cultural hub of the region. Attendees at the Caribbean Hotel & Tourism Investment Conference will have a number of major issues to ponder that will shape the region's tourism business through the rest of the decade and beyond.

Of course, nearly every conversation about Caribbean tourism begins and ends with airlift. Since no one has figured a way to drive to the Caribbean or from island to island, air service is the most critical issue and, disturbingly, the one that is out of the control of the hotel industry and other businesses reliant on tourism. American Eagle, which for many years was the dominant inter-island carrier for the Caribbean, is on shaky financial ground and reportedly will abandon its hub in San Juan that has served for decades as the gateway to the rest of the region for both tourists and residents. As the carrier has slowly ratcheted down its Caribbean service in recent years, other airlines, notably Jet Blue, have stepped in to add flights. It's still a precarious situation.

The other airlift-related issue is the price of oil. Rising jet fuel prices mean higher airfares, particularly for flights to some of the smaller islands. Couple that with the financial pinch consumers are feeling due to higher gas prices at the pump, and it's easy to see why some tourists may skip a Caribbean vacation this year. And rising energy costs make it more expensive to operate resorts in the Caribbean, which means operators will need to raise their room rates and perhaps even add the dreaded energy surcharges.

Even though many consumers look at the Caribbean as one place, it's actually a collection of more than 30 independent countries and territories of other nations. And while potential visitors see it as one entity, nationalistic and economic factors seem to prevent the countries from cooperating on many issues, in particular developing a cohesive, integrated marketing effort that promotes the entire region as a prime destination. Several attempts have been made, but so far the results have been mostly lackluster and not long lasting. This is one challenge the region can solve on its own, but so far no country or leader has shown the skills, charisma and moxie to make it happen.

The other 800-pound elephant in the Caribbean tourism room is Cuba. At some point—tomorrow, next month, next year or five years from now—the walls between the U.S. and Cuba will finally crumble and American tourists will be able to openly and easily visit the country and U.S.-based hotel companies will be able to further develop the country's tourism infrastructure. How that event will affect the rest of the Caribbean tourism industry remains to be seen, but it's a worry for every tourism minister and hotel owner in the other 29 or so countries nearby.

So, as you can see, the delegates to this week's CHTIC and the other Caribbean-focused conferences this year will have plenty to discuss. Unfortunately, if this year's meeting is anything like the ones before it, very little will be accomplished to solve the significant challenges ahead.

I'll be reporting from CHTIC on these issues and others discussed at the conference. Follow me online at www.LHonline.com or on Twitter @LHMagazine #CHTIC.

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