Wayne Cummings, president of the Jamaica Hotel and Tourist Association (JHTA), has said that there are early signs that tourism may slide in the year ahead. He says the industry is already seeing a 30 percent decline in forward bookings for the first quarter of 2009.
“I was talking about how the bookings are tracking; but what they are actually going to be is another matter,” he told Sunday Business.
“At this time, there is resistance to people making firm reservations and making deposits up to that level and that is quite significant, because it is a very unfortunate time because the winter tourism season is the months we depend on to create the cash flow integrity for the beginning of our year.”
Winter, the industry’s most lucrative season, begins December 15 and runs to April 15.
The JHTA president said that while for now, some hotels have reasonably full houses, which is typical for the fall months, the tracking for January to April for the forward bookings was down.
If we were to go by Cummings’ projections, this would mean that stopover arrivals could decline from 142,861 in January 2008 to 100,003 for that month in 2009.
For February, visits would slide from 156,831 to 109,782 tourists; and March, from 184,276 in 2008 to 128,987.
“If that is any indication of what the rest of the year is going to look like, it is going to be a strain on everyone,” said Cummings, who runs a Sandals property in Negril.
Cummings pointed out that as a result of the lower bookings, hotels are now facing a cash-flow deficit.
“Hotels operate on a cash-advance system,” he said.
“In the bookings for January, the deposits, particularly in all-inclusive hotels, are paid today or maybe yesterday for those arriving in January, which means our cash flow today is impacted by those bookings,” he explained.
Cummings said JHTA members are revising their operating budgets to carve off costs.
The businesses that are dependent on tourism, such as merchants and streetside vendors, should expect their earnings to dwindle, he said.
He also warned that staff in the hotels might have to be rotated.
The decline in bookings is linked to the global financial crisis, and is coming from all but one of Jamaica’s traditional markets for tourists.
“No market, with the exception of Canada, is immune to what has been taking place, because this is global. This is something that is fundamental in terms of people’s pocketbooks; there is the investment issue, there is the retirement issue,” he said.
Maintained level of growth
In January of this year, stopover arrivals were up by 10.1 percent, with the United States market up by six percent.
Year to date, Government officials say the market has maintained some level of growth at 5.5 percent.
Cummings said hoteliers would be fighting for whatever business was out there through more aggressive marketing in markets viewed as untraditional sources for Jamaica.
Tourism Minister Edmund Bartlett, in a separate interview, suggested that Jamaica would be targeting places like Mexico and Colombia while maintaining focus on the United States, from where more than 70 percent of the business emanates.
“Bear in mind that no matter what is happening in the US now, it still remains the largest and richest tourism market flow and further, our share of it is still small, it is less than 0.8 percent. The scope for more work in the US is still there,” said Bartlett.