Tourism is Grenada’s largest source of foreign exchange, with tourist expenditure estimated at an annual average of EC$350 million over the past ten years. The sector is projected to have generated direct employment for about 5,000 persons by the end of 2016.
TOURISM SECTOR EXPORT PERFORMANCE
In 2015, total arrivals in Grenada grew by 18.3 per cent. Contributing factors to what was considered dramatic growth in 2015 included the opening of La Source Sandals Resort, improved airlift and some very aggressive marketing by the then newly established GTA. Following on from this 2015 performance, total arrivals grew by 4.1 per cent during the first quarter of 2016, including an 8 per cent increase in stay-over arrivals (GTA and CSO).
Grenada’s new brand, Pure Grenada: The Spice of the Caribbean, has proven to be invaluable to enhancement of Grenada’s tourism product and has been successfully launched in the major target markets – that is, the UK, the USA, Canada, Germany and the Caribbean itself. The new brand speaks to the unspoilt characteristics of an eco- tropical paradise, with a focus on geo-tourism and the eco-chic visitor. The brand is also aspirational, calling for sustainability of place, people, culture and climate.
Airlift to Grenada continues to increase, with the recent additions of Delta and JetBlue. Several major infrastructural works are planned at the Maurice Bishop International Airport and on the sister isle of Carriacou to upgrade the runway there.
In terms of attraction sites, efforts are being made to commercialise government-owned assets, and the private sector is being encouraged to expand and diversify its products and services. Recently, the GIDC revised its incentives regime to stimulate investment in the sector by local and international investors.
With respect to room capacity, commencement of construction of two major hotels – Silver Sands and Riviera – is expected, and the Port Louis development project has commenced.
Tourism is cross-cutting and inter-sectoral, and therefore has tremendous cross-sectoral development impacts. In the absence of compilation of tourism satellite accounts, Grenada is unable to fully evaluate the negative and positive impacts of the sector, but, based on the available statistics, the impacts on employment and direct income generation point towards a sector with strong impacts on and potential for poverty reduction and wealth creation.
It is estimated that there are some 11,000 persons employed both directly and indirectly in the Grenadian tourism industry (WTTC 2015: 4).
Surveys conducted in recent years have revealed the following demographics among visitors and potential visitors to Grenada:
- Couples, aged 35+, with household income of EC$75,000+;
- Adults, aged 30+, with income of EC$45,000+;
- Baby boomers, aged 55+;
- Millennials, aged 20+, who attend special events;
- Professionals, executives and administrative managers;
- Families; and
- The Grenadian diaspora and their families
The same surveys reveal that visitors to Grenada expect:
- Quality and value for money;
- Quality service;
- A good and regularly refreshed product;
- Adequate airlift;
- A safe destination;
- Cultural exploration;
- Authentic experiences;
- The ability to research and purchase travel online;
- Value-added travel packages;
- New experiences; and
- 'Green’ (that is, environmentally friendly) tourism
Within the Strategy Support Network (SSN), the sector is served by MTCAC, the GTA and the GIDC. In addition, the sector’s development is supported by the GHTA, the Grenada Scuba Diving Association (GSDA), MAYAG, the Bureau of Standards Grenada, and other services delivery agencies in the public and private sector.
Following from the situational analysis, stakeholder feedback and, importantly, lessons learned from implementation of the NES 2006–11, a decision was taken to treat the continued development of the ‘Pure Grenada’ tourism brand as the main thrust of this new NES 2017–21. In so doing, the Grenada dive experience was included as a focal sub-sector and the action plan developed includes initiatives to increase the impacts of SGU in increasing stay-over arrivals to Grenada.
The yachting and maritime services sector, including the cruise–ship sub-sector, is treated as a separate priority sector within the NES 2017–21 (see The Yachting & Maritime Services Sector).
Tourism sector export policy and strategic considerations
The vision for the sector, taken from the GTA 2015–16 Strategic Plan, was endorsed following wide stakeholder consultations:
Our Vision is for Grenada to be the world’s leading tropical geo-tourism destination.
Likewise, the vision statement:
Through purposeful collaboration, we will consistently strive to develop Grenada, Carriacou and Petite Martinique as a premier tropical geo-tourism destination, strategically promoting our niche offerings and uniqueness.
The mission statement supports both of these, and is similarly drawn and endorsed:
To effectively collaborate with all Grenadians and our stakeholder partners to consistently achieve excellent visitor experiences, and to pursue and promote sustainable growth in an environmentally responsible manner that ensures economic, social and cultural benefits to the people of Grenada, Carriacou and Petit Martinique by means of nurturing national ownership of the ‘Pure Grenada’ brand.
It should be noted that several of these considerations necessarily have cross-cutting impacts across all of the focal areas – that is, improving efficiencies, minimising leakages, and adding and creating value.
Globally, international tourist arrivals are estimated to have increased by an average annual rate of 4 per cent between 2010 and 2015 (UNWTO 2016).
This growth occurred despite disruptive geopolitical developments, and the 2007–08 global financial crisis and subsequent economic downturn that preceded the period and which is expected to be sustained into the long term. International tourist arrivals are nonetheless projected to increase by an average annual rate of 3.3 per cent between 2015 and 2030, to reach 1.8 billion in that year (ibid.).
In this market context, arrivals in emerging destinations are projected at 4.4 per cent, which is roughly twice the rate projected for arrivals in advanced traditional favourite destinations, including Europe and North America. This is expected to result in an increased market share among emerging economies, from 30 per cent in 1980 to 57 per cent by 2030. In terms of arrivals, the strongest destinations are forecast to be Asia and the Pacific, the Americas (among which the Caribbean is included), Europe, the Middle East and Africa (ibid.).
In 2014, arrivals in the Caribbean were up 6 per cent, led by Dominica at 10 per cent, and followed by Cuba at 4 per cent, Jamaica at 4 per cent, Puerto Rico at 1 per cent, Turks and Caicos Islands (TCI) at 50 per cent, Montserrat at 22 per cent, Grenada at 15 per cent, Haiti at 11 per cent and Cayman Islands at 11 per cent.
In Grenada, after the construction of the Point Saline International Airport in 1985, tourism became the fastest growing sector. At that time, the GoG had embarked on a sector expansion plan that included a campaign to attract major air carriers from Canada, the USA and Western Europe to make direct flights to Point Salines, results from which were constrained by hotel room capacity, which had grown from 300 in 1983 to roughly 600 by 1986. By 1986, stay-over arrivals recorded a 34 per cent increase on 1985 figures, to reach 39,000, and cruise-ship visitors increased sharply from some 30,000 in 1984 to 90,000 in 1986 (Grenada Tourism Recovery Plan).
Based on data collated by the GTA, Table 1 illustrates that, in recent years, arrivals from North America and Latin America have exhibited strong growth, those from Europe and the Caribbean have been declining, and student arrivals have increased steadily. Following these trends, the USA, UK and the Caribbean, in this order, have continued to account for the largest share of arrivals.
Since 1986, although it experienced sharp declines in the years immediately following Hurricane Ivan and the impacts of the global financial crisis on demand for tourism, the sector has experienced a positive average annual growth rate. There was an upturn in arrivals since 2014, following sluggish figures, at best, in the years immediately preceding.
While there was a slowly rising trend in numbers of stay-over arrivals and steady growth in the average length of stay-overs between 2009 and 2015, the number of available rooms was reported to have increased only marginally – and there was a reported marginal decline in estimated receipts from tourism between 2014 and 2015.
Nonetheless, preliminary estimates revealed the sector to have been a major contributor to overall growth in GDP and to a lowering of the external current account deficit in 2015, which is indicative of continued recovery.
Market Environment and Meeting Market Demands
According to data from the World Tourism Organization (UNWTO), over the past six decades tourism has experienced continued expansion and diversification to become one of the largest and fastest growing economic sectors in the world, with international tourist arrivals increasing from 25 million in 1950 to 278 million in 1980, 527 million in 1995 and 1,113 million in 2014, and worldwide earnings of receipts from tourism rising from US$2 billion in 1950 to US$104 billion in 1980, US$415 billion in 1995 and US$1,245 billion in 2014 (UNWTO 2015: 2).
Within these growth trends, there was evidence of diversification with respect to market participants and the product/service demanded, which has driven growth in several niches within the tourism market.
Source markets for international tourists have traditionally been Europe, the Americas, Asia and the Pacific, but rising income levels have induced fast growth in demand for tourism in emerging economies in Asia, Eastern and Central Europe, the Middle East, Africa and Latin America. Europe continues to be the world’s largest source region, generating roughly half of the world’s international arrivals, followed by Asia and the Pacific (24 per cent), the Americas (17 per cent), the Middle East and Africa (3 per cent each). The ranking of countries as top-spending tourism market sources reveals China to be in the lead, followed by the USA, Germany, the UK, the Russian Federation, Canada and France. China is also the fastest growing source market for tourists. Emerging global tourism demand trends – which have increased growth potential for several Caribbean countries, including Grenada – are primarily centred on:
- An increasing demand for experience and community tourism;
- The advocacy of sustainable practices in developing the sector, to ensure that any long-term negative social and environmental impacts do not outweigh the short-term economic benefits; and
- The demand that the needs of visitors, the industry and host communities must all be met.
In this context, tourism policies in small developing Caribbean destinations in the throws of addressing climate change and poverty alleviation have emphasised aspects of ecotourism in some form or the other, whether as experience tourism, nature tourism, heritage tourism or community tourism. In addition, offshoring and business process outsourcing (BPO) have led to the emergence of offshore patient management facilities and learning institutions, which have triggered growth in medical and education tourism globally, including in the Caribbean. Despite its weaknesses , Grenada’s rich endowments of natural resources and diversity have, in recent years, fuelled the successful development of the ‘Pure Grenada’ tourism brand, which appeals to those advocating for sustainable tourism. It incorporates Grenada’s fresh produce, its cultural heritage (including community life) and the raw Grenadian experience as the USP of Grenada’s tourism product.
The ‘Pure Grenada’ brand is an excellent step towards selling the Grenada tourism product in niche markets, but it has to be well developed, packaged, showcased and marketed. This must be pursued within an integrated development policy framework that mainstreams gender issues and environmental management and targets job and wealth creation.
In this context, the strategy set out in the action plan matrix focuses on the following responses to the key issues affecting the sector mapped during strategy development discussions.
- Further develop the national ‘Pure Grenada’ brand. (Building quality and branding)
- Reduce dependence on fossil fuel. (Capacity development)
- Lower the level of indirect costs of doing business. (Cost of doing business and trade facilitation)
- Address labour force, and institutional and human resource capacity, challenges. (Capacity development)
- Improve access to finance to market and manage the destination. (Access to finance)
- Co-ordinate implementation of the tourism policy among stakeholders within an integrated national development framework and secure environmental sustainability. (Building quality and branding)
- Develop HRD programmes to nurture entrepreneurship and to develop competencies for growth of the sector. (Capacity development)
- Strengthen inter-sectoral linkages. (Capacity development)
- Enhance co-ordination and support from the SDN within the sector. (Building quality and branding)
- Target and focus promotion, and increase investments in promotion. (Market access and promotion)
- Increase levels of language skills and other competencies. (Client focus)
- Improve airlift for cross-border transportation. (Infrastructure)
- Develop and implement relevant and transparent incentives regimes. (Costs of doing business and trade facilitation)
- Improve upon the legislative and regulatory framework, and nurture a compliance culture. (Costs of doing business and trade facilitation)
- Address security concerns. (Capacity development)
- Establish strategic alliances, partnerships and collaborative approaches. (Capacity development)
- Facilitate enhanced financing options. (Access to finance)
- Facilitate enhanced access to compiled statistics for analysis and planning. (Trade information)
- Improve packaging and labelling. (Building quality and branding)
DIVE TOURISM SUB-SECTOR
When engaging in the strategic development discussion with stakeholders within the tourism SWG, dive tourism emerged as a distinct sub-sector with specific – perhaps unique – considerations. It is therefore treated distinctly with the NES 2017–21, with a view to developing its export potential more effectively.
The global diving industry has been reported to generate an estimated US$8 billion. Of this market, a third of the certified divers were classified as active divers who took a dive holiday at least annually.
The Professional Association of Diving Instructors (PADI), which accounts for an estimated 70 per cent of certified divers, is based in the USA. Despite evidence of slower annual growth in the industry, which now averages 10 per cent compared to 15 per cent in the 1980s, some Caribbean countries, including Grenada, have recorded strong growth as small-sized market participants.
Dive tourism relates to tourist trips the main purpose of which is scuba diving, which is becoming an increasingly popular component of the tourism product offered by several Caribbean countries.
It includes freshwater diving and diving in the sea, but excludes all types of snorkelling. The main requirements for provision and consumption of this service are diving cylinders and regulators, and diving suits and fins.
In addition to the dive experience provided, dive companies also offer dive certification training. Diving certificates are issued most commonly by PADI and the National Association of Underwater Instructors (NAUI), based in the USA, the British Sub-Aqua Club (BSAC), based in the UK, and the Confédération Mondiale des Activités Subaquatiques (CMAS), headquartered in Italy. Most of Grenada’s dive certification businesses are associated with PADI.
DIVE TOURISM SUB-SECTOR EXPORT PERFORMANCE
During 2008, the GSDA conducted in-depth analysis to highlight the major contribution that the scuba diving industry (SDI) makes to Grenada’s tourism product. It executed a 12-month retrospective survey of diving visitor numbers and revenue generated, collecting data from all of its members. The analysis revealed a total of 5,435 diving visitors during 2008 (4,960 to Grenada and 475 to Carriacou). To account for accompanying non- diving friends and family, each diver was attributed an additional 1.6 persons (which William Cline, a marketing and research consultancy specializing in diving, suggests is typical for a Caribbean diving holiday), to give a total of 14,131 diving-related visitors (1.6 non-divers × 5,435 divers).
The average length of stay in 2008 was found to be eight days, giving a total of 113,048 room nights in Grenada and Carriacou occupied as a result of the SDI.
The major revenue streams from diving visitors were estimated using conservative average daily expenditure rates. Based on this analysis, the dive tourism sub-sector was estimated to have contributed in the order of EC$69 million in 2008. It is recommended that resources be allocated to allow for assessment of the sub- sector’s contribution to overall tourism receipts on an annual basis.
DIVE TOURISM SUB-SECTOR EXPORT POLICY AND STRATEGIC CONSIDERATIONS
The GSDA has developed the following vision for dive tourism in Grenada:
To establish Grenada as the dive capital of the Eastern Caribbean by increasing the number of physical dives by 5 per cent per year in an environmentally friendly and exemplary ‘safe diving practices’ manner.
Its mission statement is:
. . . to promote and sustainably develop the scuba diving industry in Grenada and Carriacou by optimising and building on the island’s international reputation as an environmentally conscious, safe and desirable diving destination.
The strategic goals for the sub-sector are based on the value- chain and SWOT analyses conducted as part of the strategic development discussions, and on the strategic plan currently being implemented by the GSDA.
Summary demographic profiling of Grenada’s dive tourism market conducted in 2008 reveals the following factors.
- Divers are most commonly mature professionals (aged 40–65).
- Divers tend to be male, accompanied by family, or couples.
- In the USA, 75 per cent of divers are under the age of 50 and 75 per cent are in full- time employment.
- At least 25 per cent of active divers in the UK take an overseas dive holiday each year.
- Main sources of dive holiday-makers are the USA, UK and Canada.
- American divers either stay in their waters or travel to the Caribbean to dive.
- China is a major emerging source country.
Potential growth drivers include evidence that:
- The over-50 age group is increasingly taking up diving;
- The sector is increasingly attracting women;
- There are increasing numbers of travellers and families who are likely to engage in impromptu dives to enrich their non-dive holiday experience.
Both of these groups of factors present opportunities for growth of the sub-sector in Grenada, as follows.
- The age and employment profile of divers suggests that the SGU may be an excellent promotion platform for downstream dive business.
- There is already strong consumer preference for the Grenada tourism product in the two leading markets – that is, the USA and the UK.
- Active divers from the USA already choose the Caribbean when going on dive holidays.
In response to this market environment, potential and opportunities, the following strategic actions are recommended, again mapped against the key issues affecting the tourism sector
- Develop a national policy, and a regulatory and enforcement framework, which ensures the preservation of Grenada’s marine resources. (Building quality and branding)
- Deepen regional co-operation to develop harmonised environmental management systems that will foster the reputation of the Caribbean as a choice diving destination. (Market access and promotion)
- Develop and implement targeted tourism promotion campaigns, such as events, festivals and other special campaigns. (Market access and promotion)
- Elaborate on the key features of Grenada’s dive experience within tourism promotion material. (Market access and promotion)
- Target selected universities (that is, both alumni and parents) in the USA in promoting Grenada’s dive product/service. (Market access and promotion)
- Ensure cost-competitiveness. (Costs of doing business and trade facilitation)
- Ensure the reliability of emergency services, including airlift and decompression. (Infrastructure)
- Strengthen collaboration among dive businesses and with other key tourism stakeholders. (Capacity development)
SUMMARIZING THE STRATEGIC OBJECTIVES FOR THE TOURISM SECTOR
The competitive positioning of Grenada as a tourist destination will depend heavily on its ability to properly finance effective marketing and management. Tourist attractions can be improved by means of value-added products and services, and product/service expansion, restoration or commercialization projects that improve the value of the offer, while at the same time raise the level of standards throughout the sector.
In addition, focus on a culture of service excellence within, development of the ‘Pure Grenada’ brand and enhanced ease in doing business will all contribute to a sustained improvement in tourism exports, with emphasis placed on niches such as attractions, dive tourism and community tourism.
The strategic objective for export development in the tourism sector can be summarized as to:
- Increase employment from increased activity in the sector
- Encourage more equitable distribution of the tourism dollar
- Develop and expand product/service offerings within the sector
- Provide the supporting infrastructure for the sector’s export development
- Reduce the costs of doing business in the sector
- Ensure Grenada's exposure to regional and international tourism markets
- Develop the level of entrepreneurship and business ethics within the sector
- Raise the level of customer service throughout the sector (to include among taxi drivers, tour operators, tour guides, customs and immigration, front-desk staff, etc.)
- Conduct capacity studies for all attractions
- Diversify the available financial products to make investment funds more accessible for the development of attractions, accommodation and ancillary services
- Develop and implement mandatory standards throughout the sector
- Foster the development of expertise in heritage preservation and restoration
- Strengthen local institutions that provide for development of the skills required by the sector
- Establish a tourism export strategy implementation taskforce, to comprised key industry stakeholders and to be responsible for:
- Liaising with the NES implementation
Co-ordinator (Focal Point) (NES IC(FP)) within the MEDPT;
- Ensuring implementation of the sector strategy within the NES 2017–21;
- Ensuring resource availability for development of the sector;
- Measuring the impact of the strategy;
- Reviewing and refining the strategy; and
- Co-ordinating the SDN to avoid duplication of effort and to maximize the use of available resources.
Critical success factors to the effective implementation of the sector strategy will be as follows.
- A strong private sector (PPP)
- A realistic level of financial support available for implementation
- A dynamic, autonomous and committed tourism strategy implementation unit
- An understanding of tourism as a priority (both by government and among the general population)
- An enabling environment for tourism development and value creation
Participants in the value chain of Grenada’s tourism sector, include:
- Bureau of Standards Grenada;
- International tour operators and promoters;
- Airlines, yachting services providers and cruise lines;
- Local tour operators;
- Local transportation providers;
- Hotels and restaurants;
- Roadside vendors;
- Tour guides;
- Retailers, farmers and other local producers supplying hotels and restaurants;
- Performers in the creative industries;
- Athletes and other sports personalities;
- International health and medical facilities operating in Grenada
Of these, providers of international travel services, international tour operators and promoters, and, locally, tour operators, hotels and restaurants account for the highest share of the value chain.
In turn, imported foods and supplies account for a large share of the value of goods and services offered by the hotels and restaurants.
Based upon the value-chain analysis and value options, and on the USP of the ‘Pure Grenada’ brand on which the strategy is built, it is envisaged that the value chain will, in future, attribute a greater level of importance to standards development and training among local suppliers of goods, services and works.