Earlier this week the CEO of Paymaster and chairperson of the Tourism Product Development Company, Audrey Marks, addressed the Rotary Club of Kingston with the theme of bolstering the country's tourism product and facing the many economic challenges that it has to contend with. Below are edited highlights of her speech.
YESTERDAY AFTERNOON just as I sat down to write this speech, I heard 'You got mail' and there on my computer was the Pan Caribbean Financial Services 'Leading Economic Indicators Report' for November 2003.
The usual dismal macro-economic picture depressed my spirit; Inflation 13.1 per cent (my God inflation is now going), YTD (year to date) fiscal deficit of ($21.7 billion, at $630 billion. Public sector debt now at 150 per cent of GDP. (gross domestic product) What did we sacrifice for? Frightening, but wait, there was something unusual about the report; the commentary was not the usual economic analysis, it was speaking to Jamaicans tenacity and will to excel!
To paraphrase "We are renown internationally for our sports, music, food, culture, tourism, our tenacity has enabled us to marvel the world through excellence and hard work. We now need this tenacity to face our greatest challenge our debt problem." It gives examples of Brazil that simultaneously cuts interest rates yet achieved appreciation of currency; Ireland, which cut taxes, focus on winners and balanced its fiscal budget. It ended "given our challenges, our solution requires a strong dose of courageous leadership, teamwork and most of all the collective Jamaican tenacity to achieve and deliver the economic growth and equity we desperately desire."
COLLECTIVE VISION FOR
ECONOMIC PROSPERITY
AND SOCIAL HARMONY
Two hours before this e-mail, I was at the office of the United Nations Development Programme (UNDP) looking at the work of the Civil Society Steering Committee led by Justice Ian Forte. Based on UNDP's case studies in the year 2000, they conducted a civic scenario/civic dialogue workshop in which it examined the case of South Africa. Following the dismantling of apartheid, South Africa faced several possible scenarios as it contemplated the future. Dr. Noel Watson shared with me four of those scenarios and place them in the Jamaican context. He looked at the next 10 years and wondered what the possible headlines would be in our country, in the year 2008 and 2013. Let us look at the scenarios. First, the 'Lame Duck Scenario', we would agree with the solution but adopt the sitting on the 'One-One Coco' approach, resulting in a everyone plodding along in a paralysis of inaction. This indecision would result in failure of government to address the economic and social problems and a situation where no matter how hard the nation tries, it cannot get off the ground. Sounds familiar, sound like Jamaica over the last 30 years.
Under this scenario, I invite you to travel with me to the year 2008 and the evening's major news as the anchorman reports: "Finance Minister returns from Washington empty handed." Secondly, the 'Ostrich Scenario', we would be hiding our heads in the sand from the realities that confront us. Our country would be a paradise lost as we throw in the towel in despair and allow those who tear the society down to take control. The business climate worsens and the economy remains stagnant. Opposing parties are forced back to the negotiating table, under worse social, political and economic conditions than before.
It is the year 2008, and as we are mired in the ostrich approach to governance, the major news of the day has the following headline: 'Demonstrators force the closure of Parliament as they protest pending salary increases for Parliamentarians'.
Fast forward to the year 2013 and the headlines are even worse: 'Thousands of workers join the unemployment line as major businesses move operations elsewhere'.
On top of all that, the unthinkable has happened, a 'don' has been sworn in as our new prime minister and he will be interviewed on the same newscast!
Thirdly, the Icarus scenario, like the mythical Greek figure, we would become so eager to achieve too much too soon, that caution would be thrown out the window as we seek the quick fix. The attitude that 'nose must run' for good to be achieved is a high price to pay for consolidated gains that are quickly lost. Social and economic crises remain inadequately addressed, government is indecisive and investors are discouraged. In other words let us be careful how we call for State of Emergency and other police state management to our problems.
We should not be surprised if it is the year 2008 and the major news of the day tells us: "The war on crime is an immediate success, crime rate is reduced 70 per cent since government's decision to treat crime as a number one priority. But: HIV/AIDS reaches epidemic proportions. International health agencies are being called upon to assist."
And would you be surprised if in 2013, the headlines screamed: 'Vigilante justice rears its ugly head as citizens take the law into their own hands'. And: 'Three more major hospitals close their doors, plunging the health services into deeper crisis'.
The fourth approach is the 'Flamingo Scenario' or in the words of Bob Marley, 'Get up stand up', we take off slowly together and then soar to great heights together when, stable conditions for economic growth and broad participation by all stake holders, allow for a balance between social reconstruction and sustained growth. Goals are achieved because everyone works together in achieving the vision for a brighter future.
Come with me then to the year 2008 and tune in to the major news headlines which read: 'Jamaican economy on the move. GDP growth stands at five per cent. Per capita income is US$2,900 and the average inflation rate is now 6.5 per cent'.
And fast track to 2013, when the major news cast reports: "Murder rate falls by 50 per cent in the last five years the lowest figure in 20 years." And: "tourist arrivals exceed six million for the first time in Jamaica's history.
Today, I could stand here and lambast the government on the economic state of the country, the devastating interest rates, the unstable exchange rates, the crime, the social decay, corruption, tribalism. So many ills, but I am in a 'Get up stand up mood'. The reality is, I am frustrated with our condition but I am in love with Jamaica and it's potential, and there is something happening! Civil society is waking up.
Over the last six months at Tourism Product Development Company (TPDCo) we have met with over 15 civic organisations such as the JCCP (Jamaica Cluster Competitive Project) , UNDP, CCAM (Caribbean Coastal Area Management Foundation), JET (Jamaica Environmental Trust), New Kingston Civic Association, Steve, Frank, Chamber of Commerce, KRC (Kingston Restoration Corporation), PSOJ (Private Sector Organisation of Jamaica), AMCHAM (America Chamber of Commerce) and JGA (Jamaica Golf Association). We have met with over 15 public sector organisations such as the Contractor-General, National Environment and Planning Agency (NEPA), Urban Development Corporation (UDC), HEART/NTA, National Housing Trust (NHT), Metropolitan Parks and Markets (MPM), National Youth Service (NYS), Port Authority, Jamaica Tourist Board (JTB), Social Development Commission (SDC), Resort Boards, JAMPRO, National Works Agency (NWA), National Water Commission (NWC) and Jamaica Hotel and Tourist Association (JHTA). We have met with six ministries namely: Industry & Tourism, Local Government, National Security, Transport & Works and Land & Environment, Water & Housing and we have also met with seven media representatives from the Gleaner Company, Jamaica Observer, RJR, CVM, HOT 102, Power 106, and Irie FM. From everyone there is a collective vision for Jamaica that is eerily similar, but there is a disconnect. Everyone is trying to in their own way to drive their vision but the collective energy is not maximised.
TPDCO'S MISSION TO FACILITATE THE COLLECTIVE VISION
Against this background I would wish to share today the vision of the TPDCo. Firstly, I must use this occasion to state very clearly TPDCo. can no longer continue to be the stopgap agency. We cannot be security managers, Parish Council road maintenance people, etc. etc., we must get our focus very clear.
Our 10-year vision puts us in year 2013, where we are speaking to our achievements co-ordinating Jamaica's shared vision for a better future using tourism as the catalyst.
We look at the past 10 years with pride and enumerate some of our achievements: Firstly, product diversification
We have acted as a catalyst, facilitator and co-ordinator creating a number of far-reaching projects to further diversify our Tourism product that has catapulted us into the Number one Tourism destination in the Caribbean.
Today Jamaica can boast of two international PGA tournaments held annually on Certified PGA courses and 10 cultural festivals showcasing Jamaica's diversity to the world.
Each resort area is professionally laid out, identified with its own resort branding.
Our sports tourism golf trails, sport fishing, professional team camps provide major sports attraction.
Casinos, water parks and jungle trails provide theme attractions.
Culture tourism tours featuring eco-tourism, food, heritage, music are defining community farming products.
Our accommodation has greatly increased with the new time share condominiums and the Bed & Breakfast programme, all operating at 100 per cent quality standards.
We have enhanced Jamaica's tourism product by further diversifying the services and facilities in the industry. We have created a world-class destination for sports, entertainment, conference, and eco and heritage tourism. This has resulted in increased visitor satisfaction, increased community involvement, increased employment, and improvement in the physical appearance of major towns and an overall improvement in the quality of life for all Jamaicans.
ORGANISATIONAL EFFECTIVENESS
In the year 2013, TPDCo has achieved collaboration between all agencies and stakeholders in meeting common objective in tourism development. World-class standards have been achieved in the areas of health, security and environment. TPDCo has aided the development of world-class personnel and aided in the socio-economic advancement. Through our first class project services, TPDCo has become self-financing.
SOCIO-ECONOMIC DEVELOPMENT
In the year 2013, there are thriving urban and rural communities throughout Jamaica, which are engaged in a variety of Tourism-based economic activities. TPDCo identified and nurtured the development of community skills and products grounded in our heritage and culture, which is a demonstration of growth and development through entrepreneurial energy and creativity of Jamaicans. By engendering a collective vision, TPDCo has created sustainable synergies for environmental protection and social harmony for the mental, spiritual and economic prosperity of our people.
Quality
In the year 2013, TPDCo has facilitated the positioning of Jamaica as the premier warm weather destination and is now the benchmark in world standards, manifested through total voluntary compliance of standards across various sub-sectors of Tourism.
Continuous maintenance of high visitor satisfaction
High quality of visitor experience
Delivery of tourism services
The quality and diversity of attractions
A highly-trained staff across all sub-sectors
Increased efficiency and sustainability through implementation of operational and environmental management systems
The ability to respond to the dynamics of the demands from the international travel and tourism markets
Economic Impact
In the year 2003, the country's Debt Servicing Ratio is 65 per cent of GDP. In 2003 The Tourism Sector was envisioned as the engine of economic growth. Now 10 years later.
There has been a reduction of the Debt Servicing Ratio from 65 per cent of GDP to 30 per cent of GDP, primarily through the growth in the Tourism Sector.
Visitor arrivals increased by 4 million to 6 million.
Foreign exchange earnings increased from US$1.5 billion to US$5 billion.
Direct employment in the Sector increased from 77,000 to 200,000.
This achievement was achieved within the framework of the Tourism Master Plan and TPDCo's involvement in its implementation.
Our vision is possible if we start today! And so our Mission today is "to achieve socio-economic growth and development to the benefit of all Jamaicans by facilitating tourism product diversification and development while enhancing visitor experience. This will be accomplished with competent, committed and motivated staff; by being customer-oriented and standards-driven; and by building consensus and strategic alliances with other agencies, communities and industry stakeholders."
Five 1st stage Objectives were identified for the next three years. Facilitation of;
1) 100 per cent implementation of Resort Partnership Plan in one resort
2) 100 per cent compliance with regulatory requirements
3) Two new JTB-licensed attraction categories, including PGA certification of one 6-course trail
4) 25 per cent improvement in visitor experience rating
5) 4 JTB-licensed viable heritage attractions/craft villages
Now it is critical that Jamaica understand that no matter how bad we think the situation is there are those who will seize the opportunities, at this point it is mostly foreign investors who seem to find Jamaica attractive and are investing huge sums and getting returns.
BUSINESS OPPORTUNITIES
What does TPDCo's Vision, mission, strategic objectives, repositioning mean for you and Jamaica? An analysis of Bear Stearns November Report states that since 1997/1999, Tax Revenue has risen only 9 per cent, hence it is a little wonder the economy has not grown. This has contributed to the continued fiscal deficit and the cycle of increasing debt. The Report reflects on two options; an unorthodox approach of pre-emptive debt restructuring but concludes; "The fundamental problem is that the public debt is so huge that even if the domestic debt was withdrawn by 100 per cent debt ratio Jamaica would still look like double - B comparable. A restructuring of the domestic debt would likely technically bankrupt most of the financial institutions in the country, opening up another major problem." It therefore recommends and endorses the orthodox way i.e. for the government to generate fiscal surplus and foster conditions for economic growth, thereby lowering the debt-to-GDP ratio overtime. It cites Ireland and Indonesia as two examples of countries where the debt-to-GDP ratio exceeded 100 per cent, and these countries have managed to stabilise their debt dynamics using the general policy model. "However, these countries had special conditions that do not seem to be present in Jamaica. In Ireland's case they had a structural boost to economic growth and policy discipline that EU convergence brought. In the case of Jamaica, structural forces are arguably exerting negative economic impulses at this time namely; secular declines in manufacturing and loss of protected markets for sugar and bananas, among others."
Therefore, what do we have what will allow us an economic recovery? The answer is Tourism. The National Industry Policy states that "Tourism is the largest and most important sector in the Jamaican economy. Contributing 13.2 to GDP, 45 per cent of Jamaica's foreign exchange inflows from the productive sectors and 8 per cent of national employment." Despite this importance, Jamaica's Tourism is not contributing near its potential to the economy. With more than half (54.9 per cent) of the world cruise ship capacity deployed to the Caribbean, with SARS and WARS, Jamaica should be crawling with Tourists.
Barbados with a population that is equivalent to 10 per cent of Jamaica's population and a landmass of 3.7 per cent to size of Jamaica is having 50 per cent of the stop over arrivals in Jamaica. Other small islands such as Antigua and Barbuda show similar performance gaps with 2.6 per cent of Jamaica's population and 30 per cent of Jamaica's arrival count.
Our premier products are SAND, SEA and SUN. This is so for all of competitors without crime and bad press issues. Hence, having outperformed our competitors for much of the 1990s, we are now underperforming; our competitive advantages in the Sand, Sun, and Sea Market are being eroded rapidly. Our all-inclusive product is now being copied by Cuba, Dominican Republic etc. Those are what can be copied and competed with. What we have not capitalised on that will give us a complete distinctive competitive advantage is Jamaica's outstanding natural, cultural, historic and built heritage. Our attraction sector has been dominated by a single attraction; Dunn's River Falls. Why have we not capitalised on our natural diversity, cultural uniqueness and strong mystic brand 'Jamaica'?
I ask myself the question "Why is a sector that has so much to contribute to national development, still existing on the fringes of the consciousness of the ordinary Jamaican? Why is this important sector not entrenched in our national consciousness? The answer is that there is a perception that the tourism sector is elitist, that it exists for the benefit and the glory of only minority of the Jamaican people, the belief that the sector exploits the small man while concentrating wealth in the hands of few wealthy interests.
This perception has perhaps been fed by the early origins of the sector and the fact that much attention has been focused on particular sectors and particular players in sector.
Just as the saying that Jamaica is more than a beach, the island's tourism sector is so much more than one hotel or attraction. The brand Jamaica is to be a multifaceted commodity, running the gamut from small breakfast operations to large hotel chains; from adventure attractions to shopping, entertainment, craft, ground transportation and others related to the sector. The benefits of tourism have far reaches beyond the confines of the tourist resorts.
In the Bahamas and Barbados, tourism is not only a livelihood, it is a way of thinking, a way of doing things, and people are always mindful of how their actions will impact on the sector. Even the media in these countries are conscious of how their reporting can affect the sector and therefore their lives, and as such they are always careful in their reporting of the news.
For the first time in Jamaica, Tourism is the priority. We have always had many choices: sugar, banana, and bauxite. Tourism is now identified as the lead industry, we must focus on making it a success.
In so doing, TPDCo's approach to achieving our vision and mission will be two fold -
Facilitate the information flow, or
Re-education on tourism, "Team Jamaica" awareness throughout Jamaica. We will include our nearly one million (1,000,000) students and 22,000 teachers as we enrol every Jamaican to be a Tourism Ambassador.
Secondly, we will be the facilitators for investment in the numerous tourist opportunities that will evolve over the next 10 years. The master plan calls for over US2$ billion to be spent over the next 10 years, we are already seeing over US$100 million per year from private sector investments. To achieve the targets of the master plan (Table B) and place us in a position to capture opportunities for the Cricket World Cup in 2007 while positioning ourselves for the explosion of cruise business we are now seeing, we will have priority focus on the development of attractions, resort town, support service and accommodation.
Attractions include the broad area of Entertainment and Sports to provide:
Visual & Performing Art Centres, Night Club
Man made attractions - Theme Parks
Leisure complex
Sports and Recreation facilities
Videos and films ('Smile Orange' and 'The Harder They Come' - classics that showcase Jamaica - use media to positively project Jamaica
Events and tours sports tourism
Focus in this area includes developing golf trails and golf product packaging, and going after the 50 million high spending golf market. Employment on one course involves all skilled or (unskilled) levels. Both Ireland and Kabas in Mexico, credit Golf Tourism for the influx of over five million golfers per year, since developing their golfing product less than 10 years ago. Ireland with three months of summer!
The development of resort type casinos and theme parks and entertainment centres can be a strong catalyst for investment, attracting Foreign Direct Investment and having a significant multiplier effect on the rest of the economy through construction, impact on retail stores, restaurants, entertainment etc. Initial economic impact from adding this attraction is estimated at US$132 million with a one-time impact on GDP of US$61 million.
2. Jamaican Music and Culture
From Bob Marley through to Shaggy and now Sean Paul, Jamaican music has captured the world stage but on entry at the airport of Jamaica, through our hotels etc. there are no real major attractions celebrating this achievement. This cannot continue.
3. Heritage Attractions - From historical towns, Great Houses, Forts, the story of the Maroons, slavery and emancipation, our churches, there has been no development. It's a shame to see the rotting of our great houses, some of the finest Georgian architecture.
4. Our natural wonders - waterfalls, caves baths, mountains, gardens
5. Health attractions - retirement villages, health spas (Tapping in on the wellness industry)
6. Support Services
Food and beverages - our cuisine is slated for major development as a product
Ground transportation - tours will have to expand and tour guides will be needed
Shopping - in bond, craft, clothing, all will have a market
7. Accommodations
While we continue to pursue major chains, a part of a diversified product offering calls for time-share, villas and Bed and Breakfast.
TPDCo will help getting persons to the standard to be certified Bed and Breakfast facility - this is your own home if you have a 3-6 bedroom home and your children have left or you are a returning resident or you are on pension. There will be the potential to earn from US$30.00 per night with no additional overheads.
The opportunity is now; we have to develop our attractions using our strength as the first step. A flow can be depicted as follows:
Infrastructure Support - air, sea roads, telephones, electricity, water (all in place)
Marketing
Attractions
Support Services
Accommodation
The marketing has started, JTB has launched a targeted marketing plan, which will see Jamaica going after 10 different marketing segments including:
1. Sports/Adventure market - 100 million
2. Health & nature market - 75 million 3. Eco/Nature Tourism, 50 million
4. Honeymoon
5. VFR, non-resident Jamaicans, Reunions
6. Groups and Convention Market
7. African American 35 million
8. Family - 70 per cent of US travel market (still untapped for Jamaica)
9. Gospel market
10. Cultural/Heritage Market/Domestic Market
Even a 1 per cent success will see Jamaica achieving over five million visitors per year. What will that mean for the economy? Well it depends to some extent on the level of local vs. foreign investments. American Airlines has moved its hub from Jamaica to Haiti, Haiti is doing great business. Does that mean that majority of the people are benefiting in a real way? No.
Let us not make Jamaica earn without most Jamaicans having their share. Jamaica how has 60 per cent of the fundamental infrastructure - Airport, Sea Ports, Highway, Access to everywhere in two hours will become a reality.
Sustainable tourism for all Jamaicans should have your investments but won't wait for it. There are numerous incentives. Well, firstly the ability to earn foreign currency income;
1. Tourism Industry Fund
2. Tax incentives
3. Training Grants
4. Technical Assistance
5. Credit line a lower interest TPDCo Vision is tied in with facilitating your creativity to become profitable ventures for you and the country. Now I know, in this current climate it's hard to think investments, this is 2003, but let me encourage you. From personal experience I know there are issues; the playing field is not perceived as level for local investors. The, FINSAC experience for those who try etc., etc. On the other hand, Michael Lee Chin is investing in Jamaica's tourism. His track record is not of idle investments, so let's stop but, but, butting. Let us not be goats but flamingos.
Audrey Marks is CEO of Paymaster and chairman of the Tourism Product Development Company
