Airline challenges lead to unprecedented cooperation among Caribbean governments
The current economic difficulties facing the airline industry worldwide have provided numerous challenges to the destinations they serve but have led to at least one positive in the Caribbean region in what could become an unprecedented level of cooperation and coordination among Caribbean governments.
The current economic difficulties facing the airline industry worldwide have provided numerous challenges to the destinations they serve but have led to at least one positive in the Caribbean region in what could become an unprecedented level of cooperation and coordination among Caribbean governments. The airline challenges have caused many to recognize that they can deliver far more benefits to their citizens by cooperating with other governments than by acting alone.
This coordination level accelerated recently when the chairman of the Caribbean Tourism Organization (CTO) and the president of the Caribbean Hotel Association (CHA) had the foresight to call an emergency meeting in Antigua for ministers and commissioners responsible for tourism, ministers and commissioners responsible for aviation, and members of the tourism private sector to find ways to minimize the impact on their economies brought on by rapid increases in airline fuel prices. It soon became clear to every participant at that meeting that by cooperating on the establishment of hubs, on the promotion of the region, on providing revenue guarantees to airlines and on coordinating the establishment of more efficient intra-regional carriers, all Caribbean countries would suffer less than if each country attempted to address the crisis on its own.
The case of Caribbean hubs, and in particular the case of the Puerto Rico hub, was most instructive. The Government of Puerto Rico has come to recognize that by increasing the number of flights and seats connecting through Puerto Rico, they increase the number of flights, seats and flexibility of passengers traveling to Puerto Rico. This point was made most forcefully in a recent meeting in San Juan, and many of the governments to the south of San Juan are relying heavily on decisions being made in Puerto Rico for their continued survival.
All governments also understand that with the current structure of the airline industry, it is indispensably necessary to ensure that the flights coming into Puerto Rico can connect easily to the onward carriers such that travelers traveling beyond the hub can connect online or through their travel agent seamlessly. Without those connections, many of the southern destinations are invisible in electronic booking systems. It is this interdependence that is forcing discussions between governments at an unprecedented level and at an unprecedented rate.
The same level of cooperation is beginning in the areas of marketing and in providing airline guarantees. In the past few years, an increasing proportion of the funds voted to departments of tourism across the world are being forced into escrow to cover airline guarantees. That leaves far less available for the promotion. This situation has compelled Caribbean governments to aggregate their promotional budgets for greater promotional efficiency and to devise financial arrangements that reduce the cost of these arrangements which also serve to minimize the risk.
“There is a silver lining on every cloud,” according to Allen Chastanet, chairman of the Caribbean Tourism Organization (CTO). “We believe that this high level of cooperation is being driven by the governments, the private sector and the people of each territory recognizing that we, in the Caribbean, are more interdependent than independent,” he emphasized. “Governments now realize that if they do not cooperate to maximize benefits or minimize risk to their countries, they will be called to account by their people asking why they refused to cooperate.”
Peter Odle, the president of the Caribbean Hotel Association (CHA) also commented on this suddenly-elevated level of cooperation. Odle noted that, “Even though the cooperation between CTO and CHA has grown over the past several years, I see increased cooperation on this issue even at the destination level where members of the private sector are ensuring that their governments are engaged in these cooperative ventures. I promise you, the private sector gets it. We will achieve much more in addressing this crisis through intra-regional cooperation that we can ever achieve by going it alone. I will tell you that those governments that do no cooperate will be seen as pariahs by both their own people, as well as by other governments in the region.”
At the meeting in Antigua, four task forces were established, headed by ministers to examine the four critical issues. These committees will report to the CTO and CHA Board meetings which will be held prior to the inaugural Annual Caribbean Tourism Summit (ACTS) in Washington, DC from June 21-24. The results of these committees will also be presented to the Caricom heads at their meeting in Antigua on July 2.
Governments have also come to recognize that they need to cooperate in speaking together with one voice to the government of the United States on a number of critical issues and they propose to take advantage of their presence in Washington to begin those discussions. Thus, it appears that this unprecedented spirit of cooperation will continue even beyond the current situation.