Opening Remarks: CTO State of the Industry Conference by Outgoing Chairman, Senator Ricky Skerritt - October 10, 2012
Ladies & Gentlemen:
It is my distinct privilege and honor on behalf of the Caribbean Tourism Organization and the Government and people of St. Kitts and Nevis to welcome all delegates to the Annual CTO State of the Industry Conference. I thank you for choosing to be here in the midst of so many other competing demands on your time and money.
I extend an especially warm welcome to Congresswoman Christensen, who readily accepted my invitation, even though she is in the midst of her very busy re-election campaign. I especially welcome The Honorable Minister from The Seychelles, who has traveled a very long way to get here, and I thank my fellow Caribbean Ministers and Commissioners for finding the time in their very demanding schedules to visit our little piece of the Caribbean. Our Rt. Honorable Prime Minister, Dr. Douglas, is away at World Bank meetings in Japan, and he has asked me to add his words of welcome to all visitors on his behalf.
Allow me, also, to take this opportunity to publicly thank my Personal Assistant Naevisia Smith, Permanent Secretary Mrs. Patricia Martin, CEO of the St. Kitts Tourism Authority Mrs. Rosecita Jeffers, and the other officers of our Ministry and Tourism Authority for their support, and for having made it possible for me to carry out my CTO responsibilities.
I also say a special thank you to Hugh Riley and his CTO team for putting up with my aggressive obsession with achieving organizational change in a relatively short two years. Hugh and I have worked very closely together on behalf of our region, and I am proud to say that I have benefitted tremendously from his partnership. Hugh is one of the hardest working people I know, and his unswerving commitment to the future of CTO and growing our Caribbean brand has gained my admiration and confidence.
To me, it seems that the two years have passed by very quickly. And, I know that I have aged considerably in the process, because it shows. You only have to look at my head and you will see how much hair I have lost. There is a local saying that if you lose hair from the front of your head, you are brainy, and if you lose hair from the back, you are sexy. As you can see, I have lost hair both from the front and the back… That’s my story and I am sticking to it.
On a more serious note, the good news is that we have created a sound platform for strategic change and I am confident that I am handing over a stronger and more achievable vision for CTO’s improved effectiveness. Two years ago, there was an urgent need to change the perception by several CTO members that our Caribbean brand marketing strategy in North America and Europe was not providing an adequate return on our investment. Consequently, getting member countries to contribute to the CTO marketing fund has been and continues to be a major challenge.
At the same time, travel consumer demands and expectations have changed dramatically, aided and empowered by the rapid rise of social media, with the top travel priority becoming the desire by guests to enjoy greater value for the same, or even less, money. Meanwhile, cash-strapped governments on both sides of the Atlantic began looking more to the travel and tourism sector as a way to balance their debt-ridden budgets.
International aviation has therefore become a more attractive source of taxation for Governments desperate for revenue. The Airline Passenger Duty (APD) tax in the UK is an example of such taxation gone crazy. The structure of the British APD is not only prejudicial to long-haul travel to the Caribbean, but it has sent the level of ticket-related taxes to an unprecedented high, raising nearly 3 Billion Pounds annually for the British Government to use on domestic programs which have nothing to do with aviation. In CTO, we believe that aviation tariffs should be kept at a minimum. It is our strong opinion that tariffs should facilitate the delivery of proper security and better service at airports, and enhance travel-related developments to result in more people traveling, more cargo, and better value for the traveler. We disagree with the British Government that aviation should be taxed at unlimited levels for balancing budgets.
Unfortunately, in spite of CTO’s best advocacy efforts, UK Chancellor George Osborne has maintained his stance towards the Caribbean. He is still not inclined to make any adjustments to his present discriminatory aviation tax structure, in which he taxes an airline ticket from London to Hawaii at a lower rate than for a ticket from London to St. Kitts, which is a much shorter distance away. In a letter last month to CARICOM’s Chairman, Prime Minister Kenny Anthony, the Chancellor said that – and I quote – “APD makes a vital contribution to the public finances and it is important that revenues from the duty are maintained.” (END OF QUOTE)
On the other side of the Atlantic, despite US Federal taxes that already constitute 20% of airline ticket prices, new proposals are pending in the US Congress that include additional travel-related fees. Particularly with the increase in airfares to the Caribbean, consumers who are paying more to get to our region expect more from our destination when they arrive. This heightened demand by travel consumers for value dictates that we must provide them with the best possible return on expenditure.
Ladies & gentlemen, I don’t need to remind you that the ongoing raises in the price of fuel have also dramatically impacted both the airlines and the cruise lines that serve our region. In response to the double whammy of increased taxation and higher fuel costs, airlines have done the natural thing – raise ticket prices, implement new fees and pass the cost on to passengers. Cruise lines on the other hand, have slowed down their sailing speeds and minimized the use of airline seats in their own travel packages. This has resulted in the stifling of home-porting in our region, new itineraries with shorter cruising distances from more US mainland home-ports and reduced market share for the islands of the southern Caribbean. During the past year, CTO has successfully lobbied the FCCA against any further reduction in summer cruising, which was being caused by an increasing redeployment of ships away from the Caribbean to Europe. I am pleased to let you know that last week, at a meeting in Curacao, the FCCA announced that their operations committee has actively begun exploring ways and means to rebuild summer cruising in our region.
All this has taken place at the same time that too many Caribbean people are being robbed of the opportunity to visit each other wherever and whenever we want to. Every year, approximately 1.5 million Caribbean travelers do business with each other, party together, join our loved ones at family events, disappear for a weekend getaway, or jump to our heart’s content at incredible carnivals, festivals and sporting events. But, for the past six years, those numbers have been falling. Between 2006 and 2011 in the OECS countries alone, we welcomed 115,000 fewer Caribbean visitors. Colleagues, we simply cannot afford for our own domestic travel market to be stifled any further, as our smaller hotels and guest houses are hurting badly from the slowdown in intra-Caribbean business, and we owe it to all travel consumers to provide the means to travel across our region as frequently and as cost-effectively as possible.
You and I know that there are a variety of reasons for the decline in intra-Caribbean air travel. The global economic downturn has certainly affected our region severely; the high cost of travel tickets is a major deterrent; poor interline connectivity; inconsistency of the service that our regional airlines and airports deliver; the immigration barriers we erect; and the over-zealous obsession by our security officials to check and recheck our own Caribbean people to the point of what can sometimes be described as willful harassment. All these factors serve as potential inhibitors to travel within our region and provide understandable excuses for prospective travelers to stay at home or to make a decision to travel elsewhere.
Facing such critical issues over the past two years, it became even clearer to me that a strong CTO was our region’s best way to contend with them. I felt it was critical that we rebuild the confidence of our members in CTO as the regional tourism policy leader, and change the organization to be more effective in finding solutions than it has ever been. And we knew we needed to do things differently in order to get better results, so we brought in McKinney Rogers, a top international business consulting firm, to analyze our operations, help us more thoroughly understand the shifting marketplace, and become better positioned to service the needs and expectations of our diverse membership.
Given the urgent challenges we are facing in the market place, we strengthened our partnership with the Caribbean Hotel & Tourism Association (CHTA) and re-energized our joint-venture Caribbean Tourism Development Company (CTDC) with a view to achieving greater specialization in addressing our marketing and business development needs. As a first step in developing a stronger marketing program, we are completely re-designing the CaribbeanTravel.com website to be more visually pleasing and user-friendly, with additional capabilities to drive increased online bookings to our region.
Ladies and gentlemen, it is partly our own failure as a region to sustain adequate levels of investment in the marketing of the Caribbean and the development of our varied tourism assets, that has caused a decline in global market share for Caribbean tourism over the past ten years. That is why I am so convinced that the future development of CTDC is one of the most urgent challenges facing CTO in the short term. Contrary to what some people seem to think, airplanes, cruise ships and hotels cannot fill themselves. But, too many of our tourism leaders still operate as if we just need to open our doors and consumers will automatically show up. I want to remind you that CTO’s market research – and actual experience – has shown that an increase in the right types of collaborative public and private sector marketing is our best hope for growing the Caribbean’s share of the global travel market. It simply cannot be business as usual.
Ladies and gentlemen, the records will show that I have deliberately and steadfastly directed the attention of CTO to addressing ALL of the barriers to the growth of travel in our region. It is therefore not an accident that we have designed this conference to zoom in on the strategies necessary to win the collaboration of those decision-makers with the power to effect change. This week, we will examine innovative concepts and best practices that have not yet been tried in the Caribbean, but deserve to be properly explored; and we will highlight the kinds of hard data that CTO has a responsibility to provide.
The onus is on all of us here to ensure that Caribbean people can better understand why tourism is so important to their livelihoods, and that we can all acquire the skills to better tell the Caribbean story while delivering world class service to our customers. We must also protect our tourism industry from over-taxation, while at the same time helping to improve our Governments’ fiscal position. And, we must set aside the petty differences that divide us so we can truly act in a united fashion and firmly position our region in the global market as the most desirable, year-round, warm-weather destination.
Ladies and gentlemen, I firmly believe that we are now on the way to achieving all of these objectives, and it is therefore in a spirit of optimism and hope that I now officially declare open this Annual CTO State of the Industry Conference.