Category Archives: tourism

Caribbean Tourism Organisation (CTO) and Airbnb sign partnership agreement

Photo credit: Pixabay

Alicia Nicholls

The Caribbean Tourism Organisation (CTO) has today signed a partnership agreement with one of the most visible faces of the global sharing economy, Airbnb. This is according to a Press Release on CTO’s website posted today February 7, 2017. According to the release, the agreement, which establishes a basis for mutual cooperation, is “to develop a set of policy principles and recommendations on the sharing economy for Caribbean governments and other stakeholders.”

The Agreement was signed by CTO’s Secretary General and Chief Executive Officer Hugh Riley and Airbnb’s Shawn Sullivan, public policy director for Central America, the Caribbean at the CTO’s Headquarters in Barbados.

Airbnb is a peer-to-peer online accommodation platform which was founded in 2008 in San Francisco, California, USA and has over 2,000,000 short-term rental listings in over 191 countries worldwide. A cursory search on Airbnb reveals thousands of listings from across the Caribbean, ranging from modest studio apartments to luxurious villas. Airbnb is just one of several virtual spaces where persons list for rent, or rent, vacation accommodation. Some other similar platforms are Homeaway, VRBO and Owner Direct.

Based on the information outlined in the CTO press release, the prospects for mutual cooperation covered by the CTO-Airbnb partnership agreement appear quite promising and include:

  • Sharing of data and studies with policy makers
  • Identifying ways to make the sharing economy more inclusive
  • Broadening the benefits of tourism to non-traditional actors
  • Attracting new stakeholders and focus on providing amazing and unique travel and cultural experiences to visitors
  • Providing to the CTO an economic analysis of Airbnb’s positive impact on local economies.
  • Based on this, briefing key stakeholders on the value of a peer-to-peer review mechanisms

Why is this timely?

This formalised mechanism for mutual cooperation  between Airbnb and the Caribbean’s regional tourism development agency is an important development and is timely for several reasons. Firstly, peer-to-peer platforms like Airbnb have become important players in the global accommodation sector. As millennials comprise an increasing share of global travel demand, there has been a shift towards a more authentic tourism experience, with a preference for self-catering accommodation (such as villas, apartments and condominiums) being part of that shift.

Secondly, it can be argued that peer-to-peer accommodation platforms allow for a more inclusive tourism model as they allow anyone from a retired person who has an extra room to rent to an expat with a vacation home to rent it for only a very minimal cost.

Thirdly, this demand shift toward self-catering accommodation has not gone unnoticed by the traditional hospitality sector (hotels) which have blamed the shift for weaker revenues and occupancy figures. These concerns are not unique to the Caribbean. A 2013 study (last updated in November 2016), which sought to estimate the impact of Airbnb on the Texas hotel industry found, inter alia, that the impact on hotel revenue was non-uniform, with lower priced hotels and non-business traveller catering hotels being the most affected. As far as I am aware, no similar study has yet been done for the Caribbean. The data sharing pursuant to the MOU could make such a study a possibility.

Fourthly,  traditional accommodation players complain that online market places are competing on an unequal footing. For instance, whereas a hotel has to comply with regulations and pay taxes, depending on the country a person who lists a villa or guest house on Airbnb for rent is not yet captured under the tax net and there may not be regulations for those types of accommodation.

Fifthly, as villas and some other non-hotel accommodation remain unregulated, there are concerns about potential reputational risk to a tourism destination should a guest have a bad experience in a villa or apartment rented through Airbnb or through any other means for that matter.

Given the above, this cooperation agreement is a welcomed and forward-thinking step as it will lay the framework for greater data-sharing to allow policy makers to estimate the size and contribution of the tourism sharing economy and to use this data to make evidence-based policy decisions for supporting and regulating the non-traditional accommodation sector. It will also set the framework for joint collaboration for promoting the Caribbean, bearing in mind shifting consumer tastes towards a more authentic tourism experience, and ensuring that the region’s tourism industry is inclusive and redounds to the benefit of all stakeholders.

For further information, please see the CTO’s official press release.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

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2015 Year in Review for Caribbean Region: Triumph, Tragedy and Hope

Alicia Nicholls

2015 has been a year of both triumph and tragedy for the countries which make up the Caribbean region. This article reviews some of the major political, diplomatic and socio-economic challenges and gains experienced by the Region in 2015, many of which would have been covered on this blog throughout the year. It also speaks to the prospects for 2016.

Political/Diplomatic issues

General elections led to changes of government in St. Kitts & Nevis, Guyana and Trinidad & Tobago, while voters in the British Virgin Islands, Belize and St. Vincent and the Grenadines bestowed the incumbent governments with a fresh mandate.  In October Haiti held its first round of presidential elections, as well as local elections and the second round of legislative elections. The second round of presidential voting which was slated to occur on December 27, was postponed indefinitely in December.

On the international stage, the election of Prime Minister Justin Trudeau in Canada was widely welcomed in the Caribbean Region as possibly heralding a new era in Caribbean-Canadian relations. However, the electoral defeat of President Nicolas Maduro’s United Socialist Party of Venezuela (PSUV) in the Venezuelan legislative elections in December has caused concern in the Caribbean about the future of Petrocaribe, a legacy of the late President Hugo Chavez under which Venezuela provides oil to participant Caribbean States on preferential terms.

In international diplomacy, the Region had two major triumphs. The first was the historic election of Dominica-born Baroness Patricia Scotland as the first female Secretary-General of the Commonwealth of Nations.  The second was the conclusion by 196 parties of an international climate change agreement in Paris, which though not perfect, paid consideration to the interests and needs of small states.

The catastrophic human and economic devastation inflicted by Tropical Storm Erika in Dominica in August and Hurricane Joaquin in the Bahamas in September-October, and the prolonged drought and water shortages being experienced across the Region are sharp reminders that climate change is an existential threat to the Region’s survival. Access to climate change finance will be critical in financing Caribbean countries’ mitigation and adaptation strategies. Despite the triumph of small states at Paris, this is only just the beginning and a major hurdle will be the ratification of the Agreement by all parties, critically the US.

Caribbean low tax jurisdictions’ battle against the tax haven smear made by metropolitan countries continued in 2015 after several Caribbean countries were included in blacklists by the European Union and the District of Columbia. At the 8th meeting of the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes held in Barbados in October, there was acknowledgement made that the Global Forum was the “key global body competent to assess jurisdictions as regards their cooperation on matters of transparency and exchange of information for tax purposes”. However, the fight is not over.

On the international front, the border disputes between Guyana and Venezuela and Belize and Guatemala remain unresolved.  The Guyana-Venezuela dispute came to a boiling point after the announcement that Exxon Mobil Corp had discovered large oil and gas deposits in waters of the disputed region pursuant to a contract made with the Government of Guyana. While CARICOM countries have pledged their support of Guyana’s sovereignty, Venezuela’s more aggressive diplomatic engagement of the region in recent months has raised questions about where CARICOM states’ loyalties will truly reside; with a fellow CARICOM state or with a major financier. To further complicate matters, Suriname, a fellow CARICOM State, has restated its claim to a portion of Guyana’s territory. Indeed, the expeditious and peaceful settlement of both disputes will be important for the economic future of Guyana.

While the US embargo of Cuba remains despite an overwhelming United Nations vote (191 to 2) yet again in favour of ending it, the United States and Cuba made significant advancements in 2015 in the quest towards “normalization” of relations. These included the easing of several travel and trade restrictions, the mutual re-opening of embassies in August and the announcement in December of an agreement to resume commercial flights between Cuba and US for the first time in more than half a century. The future resumption of air links between Cuba and the US is a welcomed development and instead of simply fearing the impact this will have on their US arrivals, Caribbean States should see this as an impetus to increase their marketing efforts in the US market and to improve the competitiveness of their tourism product.

Socio-economic issues

Lower oil and commodities prices have had a mixed impact on the region. They have been a blessing for services-based, import-dependent Caribbean countries struggling to overcome the lingering effects of the global economic crisis on their economies by slightly reducing their import bills and narrowing their current account deficits somewhat. For commodities exporting Caribbean states, however, the impact has been negative. Low oil prices have had a deleterious impact on the Trinidad & Tobago economy which is dependent on the export of oil and petrochemicals and was recently confirmed to be in recession after four consecutive quarters of negative growth.

The tourism industry, the lead economic driver for most Caribbean countries, saw a strong rebound in 2015 with several Caribbean countries, including Barbados, registering record long-stay and cruise ship arrivals, buoyed by increased airlift and cruise callings and stronger demand from major source markets and lower fuel prices.

However, the Caribbean continues to confront an uncertain global trade and economic climate. As recently as December, Managing Director of the International Monetary Fund (IMF), Christine Lagarde, was quoted as stating that global growth for 2016 will be “disappointing” and “uneven”. Another arena Caribbean countries must watch is the troubled Canadian economy and the depreciation of the Canadian dollar as Canada is one of the major tourism source markets for Caribbean countries and an important market for Caribbean exports.

According to an Inter-American Development Bank (IDB) report released in December, Caribbean exports are estimated to decline 23% in 2015, with Trinidad & Tobago accounting for the bulk of the decline. A bright spark is that St. Lucia, Grenada and Guyana signed on to the World Trade Organisation (WTO)’s Trade Facilitation Agreement, joining Trinidad & Tobago and Belize. The on-going reforms being made by these countries pursuant to the Trade Facilitation Agreement should help facilitate and increase the flow of trade in these countries. Barbados, Guyana and Haiti underwent their WTO trade policy reviews in 2015.

The Caribbean region continues to be one of the most indebted regions in the world. Aside from high debt to GDP ratios, several Caribbean countries continue to face high fiscal deficits, wide current account deficits and sluggish GDP growth. Regional governments will have to continue measures to lower their debt, broaden their exports and lower their import bills.

In September, the world agreed to the 2030 agenda for sustainable development in the form of the 17 ambitious sustainable development goals and their 169 targets. A critical factor for achieving these goals will be access to financing for development. Caribbean countries already face several challenges in accessing development finance owing to declining inflows of official development assistance, unpredictable foreign direct investment inflows and limited access to concessionary loans due to their high GDI per capita. Caribbean States should continue to vocalize their objection to the use of GNI/GDP per capita as the sole criterion for determining a country’s eligibility for concessionary loans.

The alarming rise in crime across the Region remains an issue which Caribbean countries must tackle with alacrity not just for the safety of their nationals but for the preservation of the Region’s reputation as a safe haven in a world increasingly overshadowed by terrorist threats. 2015 was a year marked by an escalation in terrorism, with deadly attacks in Egypt, Kenya, Paris and Beirut capturing international headlines. Moreover, the news of recruitment of some Caribbean nationals by ISIL (Daesh as ISIL calls itself in Arabic) is an issue which Caribbean States must confront.

The growing threat of terrorism has caused some concern about the security and robustness of the Economic Citizenship Programmes offered by some Caribbean countries. St. Kitts & Nevis revamped its programme and in light of the Paris attacks, the Kittitian Government announced in December that Syrian nationals will be immediately suspended from its programme. However, the fact that St. Lucia has forged ahead with the establishment of its own programme, accepting applications from January 1st 2016, shows that some regional governments strongly believe the gains outweigh any potential risks.

High unemployment and youth unemployment rates continue to be major social issues threatening the sustainability of the Region, with consequential implications for crime and poverty reduction and political engagement.

Prospects for 2016

Without doubt there are several issues and challenges which confronted the Region in 2015 and will continue to do so in 2016. Moreover, since the “pause” taken years ago, CARICOM continues to face the threat of regional stagnation and fragmentation. While Dominica must be applauded for signing on the appellate jurisdiction of the Caribbean Court of Justice, it is only the fourth out of fifteen  CARICOM States to have done so nearly fifteen years after the Court’s establishment.

However, in spite of these challenges the Caribbean Region has several factors still going in its favour, including high levels of human development, well-educated populations, political stability and a large diaspora. These are factors which it should continue to leverage but should not take for granted. No doubt a critical success factor will be the ability of regional governments, individually and together, to formulate effective and innovative solutions to the challenges faced, working towards the achievement of the SDGs, and their ability to mobilize domestic and international resources to finance these solutions. Let us also hope that 2016 will be the year where there will be a greater emphasis on increasing the pace of implementation of the Community Strategic Plan 2015-2019. The unity displayed by CARICOM during the Paris negotiations should be a reminder that the Caribbean is at its strongest when united.

Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. Please note that the views expressed in this article are solely hers. You can also read more of her commentaries and follow her on Twitter @LicyLaw.