Caribbean braces for drop in tourism spending

By DANICA COTO | November 23, 2011 | 6:55 PM EST

Two tourists sit in the sand on a beach in San Juan, Puerto Rico, Wednesday Nov. 23, 2011. The Caribbean anticipates another surge in visitors this winter, but officials warn that the amount the average tourist spends probably will decline. (AP Photo/Ricardo Arduengo)

SAN JUAN, Puerto Rico (AP) — While the Caribbean anticipates another surge in visitors this winter, officials warn that the amount tourists spend while on vacation likely will decline.

That expected drop in expenditures is a concern for Caribbean tourism officials, who said an increase in visitors might not offset the loss of revenue considered vital to the many tiny islands scattered across the region.

"The bodies are traveling, obviously, but the spending is clearly impacted," said Josef Forstmayr, president of the Caribbean Hotel & Tourism Organization. "The larger destinations have it a little easier. They have more resources, they get better airlift, they have better products."

The economic crisis forced people to postpone their vacations for a few years, and while demand for travel has risen, tourists will not be able to afford much, said Evridiki Tsounta, an economist with the International Monetary Fund.

The IMF has encouraged the Caribbean to diversify and seek other tourism markets, especially in Latin America, where the economy has been rebounding, she said in a phone interview.

"Given that both the U.S. and the U.K. are not faring very well, and the outlook is not very rosy moving forward, it will be hard for things to revert quickly," Tsounta said.

Spending is tight amid the ongoing economic crisis, and tourists are cutting back on transportation, food and entertainment, said Winfield Griffith, research director for the Caribbean Tourism Organization.

Visitors, especially repeat ones, are increasingly choosing to board public buses instead of hailing taxis to visit popular attractions, and they are buying food and liquor at supermarkets instead of eating out, he said.

They also are booking outings through small, local operators instead of relying on hotels or buying pricey packages, Griffith said.

"They know the drill," he said. "In Barbados, for instance, you can pay $2 by public transport to go anywhere in the country. To go around the country by taxi would probably run you in the neighborhood of $150. That's a massive difference."

Last year, tourists across the Caribbean spent $22.3 billion, compared with a record $27 billion spent in 2007, said Sean Smith, statistics specialist with the Caribbean Tourism Organization.

The biggest drop in expenditures in the last decade was reported in 2002, with $18.9 billion spent, he said.

Even with falling expenditures, Caribbean countries such as the Bahamas, St. Lucia and the Dominican Republic announced a record number of visitors last year. Tourism officials hope to surpass the more than 23 million visitors reported last year this winter season.

Registration for the Caribbean Marketplace, the region's largest marketing event that will be held in the Bahamas in late January and aims to create vacation packages, is up by nearly 50 percent compared with last year, Forstmayr said.

"We expect a strong winter," he said. "Overall bookings from all the islands are up from last year."

New routes announced by the airline JetBlue from Puerto Rico to St. Thomas and to St. Maarten also could bring additional visitors, said Gilda Gumbs-Samuel, executive director of the Anguilla Hotel and Tourism Association.

Anguilla, a speck of an island in the eastern Caribbean, saw a record double-digit increase in tourists last year, the only place in the region to see such growth. But Anguilla is accessed only through St. Maarten.

"That's a bit of a hindrance," said Gumbs-Samuel. "Some people like a direct airlift."

The cruise ship industry also promises to draw in thousands of tourists this winter, said Carolyn Spencer Brown, editor in chief of

Last winter, cruise lines withdrew their ships from the Caribbean and placed them in the Mediterranean, hoping to attract a wealthy European market.

"That was a radical experiment, and it failed," Spencer Brown said. "So the ships are back in the Caribbean this year."

Puerto Rico, a cruise-ship hub, anticipates a 20 percent increase in visits, bolstered by the new arrival of the Celebrity Silhouette line that is expected to generate $3.6 million in revenue during the winter season, said Jose Perez-Riera, the U.S. territory's Commerce and Economic Development Secretary.

Spencer Brown noted, however, that tourists are demanding cheaper prices and scrutinizing deals before buying anything.

"People are very quirky these days about value for money," she said. "They'll splurge for it, but it better be worth it."

Splurging while on vacation, though, is a time-honored tradition for some travelers.

Constance Knoll, 64, of St. Louis, Missouri, said she and her husband saved up for an upcoming Caribbean cruise, paying less than $3,000 for the weeklong trip in December.

But unlike many other tourists this winter, they agreed to not set a budget during the trip.

"When it's vacation, you don't have to think that way," she said. "If you want it, you can have it. Life is short. And we're in our 60s now, so life is even shorter."