How Are We Doing?
How Are Our Neighbours Doing?
Like David rubbing shoulders with several Goliaths, Grenada’s stock of hotel rooms accounts for only 0.7% of the Caribbean total. Like most other tourist destinations, Grenada has been negatively impacted by the global recession. There has been a downward slide in Grenada’s tourist arrivals, from 130,363 in 2008 to 112,307 in 2012 – a 14% contraction in 4 years. Similarly, Grenada’s cruise ship arrivals have declined every year since 2008, a contraction of 30% in just 4 years (source: CTO). The one ray of hope in Grenadian tourism has been the yachting sector, largely as a result of the development of Port Louis plus several increasingly popular regattas and fishing tournaments.
We cannot judge Grenada’s tourist industry in a vacuum; there must be some benchmarks against which we can compare our performance. In 2012, total visitor arrivals to the Caribbean region increased by 5.4%. In Grenada, arrivals fell by 5.1%. To put this into perspective, in 2012 Grenada was ranked #22 – out of 24. If this were a classroom, Grenada’s tourism industry would be given a failing grade. When the majority of Caribbean destinations recorded increases in tourist arrivals in 2012; why didn’t Grenada?
In established hotels, it is noticeable that as the occupancy rate decreases; the percentage of repeat guests increases; and indeed most of Grenada’s larger hotels do have high rates of repeat guests. By retaining their first-time guests, it could be said that the Grenadian hotels have “done their job”. But with such a huge fall-off in first-time visitors to Grenada; the question needs to be asked: has the Grenada Board of Tourism (GBT) done its job, in marketing Grenada internationally? The evidence suggests it has not.
Whatever marketing strategies are currently being used need to be seriously re-examined; because the message is clearly not getting across. Modern tourism marketing encompasses so much more than media ads, trade shows and brochures; and destinations can get bang for their marketing bucks by thinking outside of the box – rather than simply throwing money at the problem.
Considering the critical importance of tourism to the Grenadian economy, the Board of Tourism should be staffed by the brightest minds available in Grenada – and beyond. GBT should be led by professionals with years of experience and detailed knowledge of the latest trends the industry; not political appointees or opportunity-seekers who view GBT as a stepping-stone to greater glory.
When Small is Big
To say that Grenada is a niche tourist destination would be putting it mildly; a microcosm is more like it. With only 1,880 hotel rooms, Grenada accounts for only 0.7% of the total Caribbean stock of hotel rooms. To put this into perspective, the graph below plots Grenada’s hotel room stock against those of the principal Caribbean tourism brand names: Dominican Republic, Jamaica, Bahamas and Barbados:
This is the Caribbean competition that Grenada is up against: David rubbing shoulders with several Goliaths. Although we may call ourselves “sister islands”, the reality is that we are all competing for the same limited pool of fickle and fussy vacationers who decide that this year they are going to take their holidays in “the islands”. In tourism marketing, size does matter; there is no way that Grenada can match its giant Caribbean neighbours in terms of marketing dollars and presence in the main tourist markets of Europe and North America. In 2010, the Bahamas spent US$73.3 million on their tourism budget; Grenada spent US$4.2 million. As the late great Barbadian banker David DaCosta would say: “We a cockroach in fowl-cock party!”
The Hotel Sector
The graph below shows movement in Grenada’s tourist arrivals over the period 2004 to 2012:
Over the past four years, there has been an almost continual downward slide in Grenada’s stayover tourist arrivals: from 130,363 in 2008, to 112,307 — a 14% contraction over the last 4 years (source: GTB/CTO). Grenada still has not recovered to the performance it achieved in 2004; the year before Hurricane Ivan.
About the only good news on the Grenada tourism scene in 2012 was the purchase of La Source by the Sandals group. Sandals are the Caribbean’s biggest and most successful hotel chain – entirely Jamaican owned and managed. La Source, which was struggling under its previous American management company, will be significantly expanded and upgraded by Sandals before its scheduled reopening in November 2013 – at more than double its present 100-room capacity.
Not only is Sandals good news for La Source, it is also good news for Grenada; as the entire island will benefit from the strength and flair of the entire Sandals marketing machinery, which will quite literally “put Grenada on the map”. Grenada as a whole now needs to take full advantage of this exposure.
The Cruise Ship Sector
Globally, the cruise ship sector has been growing exponentially over the past two decades, out-stripping land-based tourism growth. The Caribbean cruise ship industry is heralded as an area of growth; the shape of things to come. Has Grenada’s cruise ship sector been all of these things?
Before we look at the numbers; a note of caution on the interpretation of cruise ship data:
- When we say that “242,454 cruise ship passengers visited Grenada in 2012”; we do NOT mean that that number of visitors actually stepped onto Grenada’s shores – far from it.
- Cruise ship data measures the total capacity of the ship; not the number of passengers on board; nor those actually getting off the ship.
- No immigration records are kept of passengers disembarking.
- Cruise ships normally operate at high occupancy rates, up to 80-90%.
- A lot of passengers – sometimes up to 20-25% – do not disembark the ship while in port; they stay on deck and claim to have “seen Grenada”.
After recovering from Hurricane Ivan in 2005, cruise ship arrivals to Grenada rose steadily, reaching a high of 348,852 in 2009; before falling for four straight years, reaching a low of 242,454 in 2012: a contraction of 30% over four years.
One important difference between the hotel and cruise ship markets is that the economic benefits from cruise ship visitors are spread over the informal and small business sectors; whereas the hotels tend to keep more of the tourism dollar in-house. The 30% contraction of the cruise ship market has had a devastating effect on the income of industry workers (taxi operators, vendors, water sports operators, etc); not only are there less cruise ship passengers, but the passengers that do come are spending less – a vicious cycle.
A recent study on the Caribbean cruise ship industry by Business Research and Economic Advisors (BREA) found that the average cruise passenger spent US$40 per day ashore in Grenada; down from an average daily expenditure of US$44 two years ago. If this is the case then Grenada has lost about EC$15 million per annum in cruise ship spending, largely in the informal and small business sectors.
Yachting: A Ray of Light
One area that has been showing growth is the yachting market. Grenada has seen increases in its yachting traffic, as a result of the development of Camper and Nicholson’s Port Louis and other first-rate marine support services; plus increasingly popular regattas and fishing tournaments.
Although the marine and yachting sector currently makes a limited contribution to the total tourism pie; this sub-sector has the potential to significantly increase in size – just look at St Vincent & the Grenadines and St. Lucia for examples of successfully developing a country’s yachting sector. The growth in the yachting and marine sector over the past few years has occurred without significant government support; it would now be appropriate for the government now to reward the sector’s positive growth with some positive incentives.
We cannot judge Grenada’s tourist industry in a vacuum; there must be some benchmarks against which we can compare our own performance. The graph below (yes, I love graphs!) plots the percentage growth in tourist (stayover) arrivals to 24 Caribbean destinations in 2012 (source: CTO; not all figures are for the complete year). This graph shows how Grenada has been performing, relative to our closest neighbours:
In 2012 the average rate of growth in tourist arrivals to the Caribbean was 5.4%, over 2011 arrivals. In Grenada however, visitor arrivals fell by 5.1%. To put this into perspective, Grenada’s performance was more than ten percentage points lower than the Caribbean average; and in 2012 Grenada was ranked 22nd – out of 24.
In her State of the Industry Report 2012; Chairman of the Caribbean Tourism Organization, Hon. Beverly Nicholson-Doty, stated that:
“All the signs suggest Caribbean tourism is rallying …. Last year, the Caribbean welcomed nearly 25 million tourists, that’s 5.4 per cent more than in 2011 and the largest number of stayover visitors in five years. This rate of growth outpaced the rest of the world which saw arrivals increase by four per cent.”
So, although individual results are mixed, the overall trend is upwards. There are Caribbean destinations that throughout the global recession have continued to record year after year increases in tourist arrivals: Cuba and Jamaica are two such examples. If Cuba, in the face of an American travel ban and the communist bogeyman; and Jamaica with its high crime rate and perceived tourist harassment; if both these countries can, consistently throughout the depths of the global recession, record increases in their tourist arrivals – then they are doing something right; and clearly we are doing something wrong. I might add that both Cuba and Jamaica attract European travellers and are as similarly affected as Grenada by the UK’s carbon tax or Air Passenger Duty.
So much for stayover arrivals; what about the cruise ship market? How has Grenada, relative to our Caribbean neighbours? The graph below (yes, I love graphs!) plots Grenada’s 2012 growth in cruise ship arrivals against 19 other Caribbean cruise ship destinations:
According to the CTO, the Caribbean attracted slightly more cruise ship passengers, 0.9%, in 2012 than it did in 2011. Geographically there has been a noted swing from the southern to the more northerly islands; a cyclical trend not uncommon in the global cruise industry; as cruise companies rotate their schedules so they do not become stale. This is reflected in Grenada’s cruise ship arrivals, which fell by a whopping 21.7% in 2012 (CTO). However, St. Lucia just an overnight’s sail to the north, recorded only an 8.7% drop in cruise ship arrivals.
A Failing Grade?
If the Caribbean were a classroom, Grenada’s tourism industry, coming in at 22 out of 24, would be given a failing grade. When the majority of Caribbean destinations recorded increases in arrivals in 2012; why didn’t Grenada? How long must we cling to the excuse that all our troubles are caused by the recession, the carbon tax and whatever else; while conveniently ignoring our own lack of performance. We need to seriously ask ourselves: Have we been doing a good job of selling Grenada?
In the 2012 Budget Statement, US$7.2 million was allocated to marketing Grenada; through the Grenada Board of Tourism (GBT). In the overall scheme of things, this is a reasonable budget; equivalent to US$4,000 per hotel room. This marketing is intended to promote Grenada as a destination, not individual hotels. When you talk to first-time visitors and ask them why they came to Grenada, many will tell you that they “heard about” Grenada, usually from friends but often from on-line and media sources; and only then did they go to their travel agent or the internet to find a place to stay. It is this group – the first-time visitor – that GBT is trying to attract; and attract back.
If we are to judge by the hard evidence (bums in beds, the industry standard), then clearly GBT’s marketing efforts have not been effective. While the numbers of visitors to Grenada have been falling in total; the real falloff has been in first-time visitors to the island; once tourists have visited Grenada once, they tend to return. It is the people who have never been to Grenada that are staying away.
Among established hotels, it is noticeable that as the occupancy rate drops, the percentage of repeat guests increases; and indeed most of Grenada’s larger hotels do have high rates of repeat visitors. It could therefore be said that by retaining their first-time guests, Grenadian hotels have “done their job”. But with such a huge fall-off in first-time visitors to Grenada, the question must be asked: has the GBT done its job, in marketing Grenada internationally? The evidence suggests it has not.
I am not privy to the inner workings of the Board of Tourism, so I cannot comment on its detailed operations as an institution. As a concerned Grenadian however, whose livelihood largely depends on the health of the tourist industry, I am nevertheless entitled to express my concern that a better job could have been done in marketing Grenada, if we are to judge solely by the superior numbers posted by our neighbours.
Whatever marketing strategies are currently being used need to be seriously re-examined; because the message is clearly not getting across. Modern tourism marketing encompasses much more than media ads, trade shows and brochures; destinations can get bang for their marketing bucks by thinking outside of the box – rather than simply throwing money at the problem.
As an example of creative marketing, Hamilton Island in Australia, a place nobody had ever heard of, advertised for an island caretaker as “The Best Job in the World”, as a way of driving awareness. The campaign achieved stunning results, with over 34,000 video entries from 200 countries, more than 7 million visitors to the website, and was a major media story. (http://www.fastcompany.com/1308374/6-lessons-best-marketing-campaign-ever) This is the kind of creative thinking Grenadian tourism needs.
Considering the critical importance of tourism to the Grenadian economy, the Grenada Board of Tourism should be staffed by the brightest minds available in Grenada – and beyond. GBT should be led by professionals with years of experience and detailed knowledge of the latest trends the industry; not political appointees or opportunity-seekers who view GBT as a stepping-stone to greater glory.
© S. Brian Samuel, 3rd March, 2013