Travel & Tourism in the Caribbean: Prospects for Growth
June 2022
Policy Guidelines
Policy Guidelines
With a 13.9% contribution to economy GDP in 2019 and 9.1% in 2021, the Caribbean is the region most reliant on Travel & Tourism globally. In fact, eight out of the ten most tourism-dependent countries globally in 2019 were in the Caribbean region.
Travel & Tourism supported 15.2% of all jobs in 2019 and 13.4% in 2021.
Between 2010 and 2019, although the sector’s average annual growth rate of 3% outpaced the regional economy growth of 1.3%, it lagged behind the global average Travel & Tourism growth of 4.2%.
The Caribbean relies on international visitors more than any other region in the world. Therefore, the right measures to support the restoration of international tourism post COVID-19 are vital for the full recovery of the sector.
As a result of the pandemic, Travel & Tourism GDP dropped by 53.2% in 2020, worse than the global average decrease of 50.4%. Meanwhile, the sector’s employment declined by 25.8%, amounting to a loss of 708,000 jobs.
In 2021, the Caribbean Travel & Tourism sector experienced the second-fastest recovery of all regions, with its contribution to GDP growing by 36.6%. Nevertheless, GDP was still 36.1% below the 2019 level.
In terms of Travel & Tourism jobs, the Caribbean saw the fastest recovery of all regions, with 15.2% growth and the addition of 311,000 new jobs in 2021.
Although the region enjoyed a strong recovery, the rate of growth differed vastly across economies, in part reflecting contrasting travel restriction policies.
The recovery in the region is expected to continue throughout this year with Travel & Tourism GDP set to grow by 27.2% year-on-year but below the global average of 43.7%.
Over the next decade, according to our current growth trajectory, Travel & Tourism GDP in the Caribbean is forecasted to increase at an average annual rate of 5.5%, more than double the overall economy growth of 2.4%. Meanwhile, Travel & Tourism jobs are forecasted to grow by an average rate of 3.3% annually, creating more than 916,000 new jobs by 2032.
However, there is potential for this to be significantly higher. The Caribbean’s Travel & Tourism sector could outpace the current growth trajectory and achieve an average annual rate of 6.7% to reach US$ 96.6 billion in 2032, up from US$ 50.5 billion in 2022. Meanwhile, Travel & Tourism jobs in the region could grow by an average rate of 4.5% annually, creating 1.34 million new jobs by 2032.
This additional growth of US$11 billion in GDP and 428,000 jobs above the current growth trajectory can only be achieved if governments, in collaboration with private sector, implement initiatives and policies such as lowering aviation fees, strengthening intra-regional collaboration, and investing in digital and physical infrastructure. They also need to focus on enhancing sustainability, recruiting and retaining the workforce, diversifying product offers, and increasing preparedness for future crises.
Contents:
Key Takeaways
Economic Impact of Travel & Tourism in the Caribbean Region
Key Challenges
Recommendations
Conclusion
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Travel & Tourism in the Caribbean: Prospects for Growth
June 2022
Policy Guidelines
Policy Guidelines
With a 13.9% contribution to economy GDP in 2019 and 9.1% in 2021, the Caribbean is the region most reliant on Travel & Tourism globally. In fact, eight out of the ten most tourism-dependent countries globally in 2019 were in the Caribbean region.
Travel & Tourism supported 15.2% of all jobs in 2019 and 13.4% in 2021.
Between 2010 and 2019, although the sector’s average annual growth rate of 3% outpaced the regional economy growth of 1.3%, it lagged behind the global average Travel & Tourism growth of 4.2%.
The Caribbean relies on international visitors more than any other region in the world. Therefore, the right measures to support the restoration of international tourism post COVID-19 are vital for the full recovery of the sector.
As a result of the pandemic, Travel & Tourism GDP dropped by 53.2% in 2020, worse than the global average decrease of 50.4%. Meanwhile, the sector’s employment declined by 25.8%, amounting to a loss of 708,000 jobs.
In 2021, the Caribbean Travel & Tourism sector experienced the second-fastest recovery of all regions, with its contribution to GDP growing by 36.6%. Nevertheless, GDP was still 36.1% below the 2019 level.
In terms of Travel & Tourism jobs, the Caribbean saw the fastest recovery of all regions, with 15.2% growth and the addition of 311,000 new jobs in 2021.
Although the region enjoyed a strong recovery, the rate of growth differed vastly across economies, in part reflecting contrasting travel restriction policies.
The recovery in the region is expected to continue throughout this year with Travel & Tourism GDP set to grow by 27.2% year-on-year but below the global average of 43.7%.
Over the next decade, according to our current growth trajectory, Travel & Tourism GDP in the Caribbean is forecasted to increase at an average annual rate of 5.5%, more than double the overall economy growth of 2.4%. Meanwhile, Travel & Tourism jobs are forecasted to grow by an average rate of 3.3% annually, creating more than 916,000 new jobs by 2032.
However, there is potential for this to be significantly higher. The Caribbean’s Travel & Tourism sector could outpace the current growth trajectory and achieve an average annual rate of 6.7% to reach US$ 96.6 billion in 2032, up from US$ 50.5 billion in 2022. Meanwhile, Travel & Tourism jobs in the region could grow by an average rate of 4.5% annually, creating 1.34 million new jobs by 2032.
This additional growth of US$11 billion in GDP and 428,000 jobs above the current growth trajectory can only be achieved if governments, in collaboration with private sector, implement initiatives and policies such as lowering aviation fees, strengthening intra-regional collaboration, and investing in digital and physical infrastructure. They also need to focus on enhancing sustainability, recruiting and retaining the workforce, diversifying product offers, and increasing preparedness for future crises.
Contents:
Key Takeaways
Economic Impact of Travel & Tourism in the Caribbean Region
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