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Examination of Global Competition and Sustained Development

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Submitted By drashtig
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Given the size and complexity of the tourism industry in the Caribbean States I will concentrate on some of the environmental consequences along with the financial benefits and socio-political effects faced as a result of being a popular destination for millions of people. The focus of this piece will be on the following issues, issues such as water shortage, displacement of people from their traditional forms of livelihood, also the fact that the Caribbean States are over dependant on the tourism industry as a means of attracting foreign investments.

Tourism has often been described as an industry that destroys the resources on which it depends for its very existence. In many parts of the world tourism seems to be suffering from its own success. The World Travel and Tourism Environment Review quotes the Financial Times of January 9, 1993, as describing the Mediterranean Sea, a major tourism area, as a "diluted sewer." It continues, "The Mediterranean Basin is home to 130 million people and is visited by 100 million tourists annually. Jointly these generate 2 billion tons of sewerage of which roughly 30% is treated. The remainder is discharged into the sea untreated and contaminates the area with little room to escape. The result? Only 4% of shellfish from the area are considered fit for human consumption and periodic increases in algae are to be expected (WWTTERC Review 1993).

A report by the Coral Reef Alliance, in 1995, found that "at the current rate of destruction, up to 70% of the world's coral reefs may be killed within our lifetime. Of the 234,320 square miles of coral reefs world-wide, 10% are already destroyed beyond recovery; 30% face a similar fate in the next 20 years. Destruction of the reefs would mean the extinction of thousands of marine species and elimination of the primary source of food, employment and income for millions of people."

The dangers are even greater where the countries involved are small islands with fragile social and ecological systems. The Caribbean receives 14 million overnight tourists and 10 million cruise passenger visitors too. The region, relying as it does on tourism for some 25% of its export earnings, is the world's most tourism dependent region.

In 1999 visitors to the Caribbean spent an estimated US$15 billion. Direct and indirect employment created by tourism in the Caribbean states (excluding Mexico) in 1999 was estimated at around 640,000. Future predictions are that the Caribbean's dependence on tourism will become even greater. This is a function both of the reality that tourism has become the world's fastest growing industry (WTTC 1998), and that several of the Caribbean's other economic sectors are either in decline or under threat, mainly due to the chaotic development of the tourism industry.

The Caribbean States therefore have no choice but to make tourism work. They must remain globally competitive, whilst also developing the tourism industry in a sustainable manner. Tourism, however, is a very complex industry and the factors affecting its sustainability are equally complex.

Sustainable development is a concept that marries two ideas often in conflict. Development has traditionally been defined largely in terms of growth - higher. GDP, more construction, more houses, more of everything, leading hopefully to the destinations in question being able to compete on a global scale. Sustainability, which connotes survival also, has to do with balance, and balance often requires moderation and control.

Sustainable development therefore is about balancing growth with the use and conservation of resources in such a way that those resources remain intact and available for succeeding generations. The Governments of the Caribbean States, being as small as they are, frequently find themselves subjected to pressure from developers of various kinds to choose unrestrained development (growth) over planned, careful modest growth. Typically the means by which large multinationals exert such pressure is by threatening to take their investment elsewhere or by simply taking advantage of the corrupt governments that are supposed to oversee the correct development of land.

The resources being referred to are the coastline, the ground water, the delicate flora and fauna and built environments of the tourism destination. To these may be added the socio-cultural (such as the local people's traditional trade) and historic assets as well. For the Caribbean, it is such resources that make up the tourism product to the extent that people who choose the destination for a holiday do so in order to experience and enjoy the Caribbean's assets as defined above.

The hotel room is simply a base from which to do so. Any industry that manages its resources in such a manner that they become depleted, especially in cases where, like fossil fuels, they are non-renewable, must inevitably self-destruct. It is therefore a necessary condition of tourism's sustainability, in the sense of its survival, for the environmental and socio-cultural resources that comprise its product are not destroyed in the process of the tourism development activity itself. A necessary condition, yes. But not a sufficient condition. There are other factors which must also be present and which supply the frame conditions within which tourism in the region will succeed or fail.

Moreover, given the small size, along with other geographical and economic realities of the majority of the Caribbean States, dealing successfully with the frame conditions indicated is best achieved in partnerships, partnerships between the tourism public and private sector and partnerships between the several states that make up the region.

Sustaining Caribbean tourism therefore depends on the region's ability to successfully be able to achieve the following:

Product Quality

The priority has to be to maintain the product quality that has made the Caribbean the world's premier warm weather tourist destination. Without understating the importance of good service, and the need for a wide range of accommodations, food and beverage, and historic and other attractions that are good value, the product quality issue has to be seen fundamentally as maintaining the natural environment of the Caribbean. A poll of 460,000 U.S. consumers by the Caribbean Coalition for Tourism (CCT) in 1999 confirmed people's primary reason for choosing the Caribbean as a vacation destination. It was discovered that all those factors which may be summed up as the Caribbean's environment: warm and equitable climate, beautiful beaches, clean air, pure water, and tropical vegetation - other factors which provide product diversification came a distant second.

It takes little imagination to see the extent to which the Caribbean's environment actually is. Especially where the smaller islands are concerned, by the daily operation and waste disposal of 161,000 hotel rooms and 1.9 million bed-days on cruise ships plying the region. Together they cater to almost 24 million visitors per year.

A recent survey carried out by the Caribbean Tourism Organisation found that the cruise line industry, stung by a negative environmental image and operating against the background of strict legislation in the US, has started to "clean up their act". Old ships were being refitted and new ships were being built with state of the art processing facilities for treating waste. Steps were being taken to recycle waste and to reduce the volume of disposal materials brought on board. This, nonetheless, still left the problem of the disposal of ship-generated waste by ships when calling at ports in the Caribbean. Moreover, as is the case for several developing regions of the world, routine inspection of the waste received is rarely carried out.

The survey also found that 68 hotels and resorts in the Eastern Caribbean were pursuing disposal practices that were impacting negatively on the marine environment. Corals and fishing resources, all of which are considered to be economically and environmentally necessary for the viability of the fishing resources of the region were being affected in an irreversible manner.

Legislative provisions to control effluent discharge are weak, or non-existent, and the enforcement capacity of agencies responsible for monitoring and enforcing the legislation is lacking. In addition, there is no regional consensus on appropriate sewage/waste water effluent and coastal sanitary water criteria.

Maintain a competitive presence as a tourist destination.

Tourism is a business and to survive it must be profitable. Profitability must however be sought within the context of projects that are in harmony with environmentally and socially acceptable standards. Profitable businesses pay taxes, employ people, earn foreign exchange, and provide surpluses for reinvestment. From the point of view of the Caribbean context, tourism has to do much more. It has to earn enough foreign exchange to meet an import bill for a region that imports most of what it consumes. Hence, revenues from tourism for this region must try to out perform the volume of leakage that is suffered.

According to Pannell, Kerr and Forster's "Trends In the Hotel Industry," lodging establishments in the Caribbean generate the highest rates per available room of any region in the world, yet yield the lowest net income. This points to basic structural weaknesses in the accommodation sector.

A major contributor to the hotel's profitability problems is the burden of taxes and duties which have increased as other sectors have become less able to contribute to government revenue. Other contributing factors to hotel non-profitability, however, are the high cost of labour and utilities, the need for massive importation of goods and services due to weak inter-sectoral linkages, high payments to middlemen in the distribution system, and low productivity due to inadequate training facilities to develop efficient human resources.

The solutions point to regional approaches. Caribbean governments need to agree and develop a common concept of the tourism industry as an export sector, and to provide a regime of incentives that assist it to operate profitably. As far as possible, these incentives should be tied to increased local or regional purchases, thus allowing the Caribbean to make money for itself. With respect to tourism training, a region so dependent on tourism must have access to quality tourism training at all levels within the region itself. The cost of operating and staffing such institutions needs to be shared by the region as a whole.

Regional Promotion.

The Caribbean has formed the Caribbean Coalition for Tourism (CCT). The coalition created a large pool of resources for co-operative marketing by drawing on the resources of the widest range of "players," both in the public sector and the private sector, including the non-tourism specific private sector, which are beneficiaries of Caribbean tourism. The objectives of the coalition were to create the volume needed to match those competitors spending millions of dollars in the market, and to keep the Caribbean region at the top of the minds of those choosing a holiday destination. Through co-operative effort the world's first regional creative advertising tourism campaign that, while promoting an entire region as a single destination, comprised of individual countries that normally compete with each other, was created and able to name 28 countries in one single brochure.

Regional Air Transportation.

To survive, Caribbean tourism must be guaranteed air transport access at an acceptable and competitive price. For the Caribbean, a region comprised of many small countries scattered in or on the borders of the quite extensive Caribbean Sea, air transportation is the very breath of life. As important as it is to the tourism sector, its role in making possible ethnic intra-Caribbean travel for social and other business purposes it is critical. Its absence would reduce the population of several small states to being virtual prisoners on their islands.

In brief, no set of countries, economically and geographically placed as are the Caribbean countries, can depend solely on foreign carriers, which understandably must make decisions about services, routes, and schedules according to the best interests of those who own the carriers. These will not, and cannot, always coincide with the best interests of the Caribbean states. Moreover, the Caribbean has seen major carriers, like Eastern Airlines and Pan Am which served the region, disappear almost without notice. It has constantly to ask itself "what if any other major carriers serving the region were to disappear". In short, there must always be viable Caribbean owned and managed carriers and their future sustainability lies in functional co-operation between them.

Co-operation between Caribbean States regarding this issue would yield the following benefits:

The creation of a better Intra-Caribbean air transportation system vital for intensifying the Caribbean integration process, Intra-Caribbean vacation travel, and multi-centre vacations.

Reduction of airline unit costs through economies of scale.

Creation of critical mass of Caribbean owned and controlled air transportation services, which could pose serious competition to foreign carriers and, in crisis situations, provide a viable alternative.

Security and Public Acceptance

To survive Caribbean tourism must be able to guarantee the safety of the visitor. This must be done even in the face of threats from crime generally, illegal drugs in particular, "acts of God" and any social upheavals that may arise. Solutions to these problems must begin at the national level. But no Caribbean country can fight the drug menace on its own, or recover from a major disaster without the help and support of its neighbours. It makes good sense therefore to be proactive in our planning and by joining our resources seek strength in unity.

Strengthening Intersectoral Linkages

Finally, tourism's economic role needs to be enhanced by creating and strengthening linkages with other economic sectors, particularly agriculture and manufacturing, thereby creating jobs outside tourism itself and expanding tourism's benefits to a wider cross-section of the Caribbean community. These linkages must be created not only within individual states, but across Caribbean state boundaries by enhanced regional trade. A serious effort must be made through such regional co-operation, to reduce the bill of some four billion dollars (US) spent annually in importing goods and services from outside the region to supply the tourism industry. In short, tourism profitability must be seen to directly benefit local Caribbean populations, if their support for it is to be sustained.

I end as I began by restating that tourism's survival in the Caribbean will depend on several factors, only one of which, though a critically important one, is the protection of our environment. The best strategy for achieving our objectives, however, seems to lie in the greatest possible co-operative action between Caribbean states. It seems to me that in a very real sense, those of us who live in the Caribbean Sea are all in the same boat and will sink or swim together.

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