MM writes: There is no doubt that the Cayman Islands are blessed with beauty and some of the clearest, cleanest and safest beaches of the Caribbean. Our infrastructure boasts some of the finest four- and five-star accommodations in the region, with all the best amenities and most luxurious services. Our political scene is stable, neutral and non-contentious and a vacation on our shores is coveted and anticipated by millions around the globe.
World-famous Seven Mile Beach is lined with soft, clean, white sand and truly gorgeous blue waters – the natural design of our country is intricate, detailed, pure and delightful to all.
We have always been eager to share this majestic experience, inviting any and all with open arms and welcoming them to bask in the beauty of our home; it did not take too many years before investors realized the Cayman Islands had the potential to be a first-class tourism destination.
Tourism by the official numbers
A wealth of knowledge about our tourism product can be gained simply by reviewing the publicly available statistics and researching other similar destinations. The Economics and Statistics Office provides visitor numbers from 1996 to present; however, a notation on the report states that air arrival numbers prior to the year 2000 also indicate “returning residents”. So, keeping that in mind, let us get a closer look at what the numbers say about our acclaimed tourism product.
Below I have pulled the numbers for visitors by air, by cruise and the total of both and shown the percentage increase for 4 year periods.
|Year||Air Arrivals||Cruise Arrivals||Total|
|2000 (Last year resident #s included)||354,100||1,030,900||1,384,900|
|2005 (year after Ivan)||167,800||1,799,000||1,966,800|
- The year 2000 compared to 1996 brought a 5% decrease in air arrivals and a 29% increase to cruise visitor numbers – a total increase in arrivals of 18% in those 4 years.
- The year 2005 compared to 2001, still feeling the effects of Hurricane Ivan the year before, brought a 50% decrease in air arrivals and a 48% increase to cruise visitor numbers – a total increase in arrivals of 27% in those 4 years.
- The year 2010 compared to 2006 brought a 8% increase in air arrivals and a 17% decrease to cruise visitor numbers – a total decrease in arrivals of 14% in those 4 years.
- The year 2015 compared to 2011 saw a 25% increase in air arrivals and a 22% increase to cruise visitor numbers – a total increase in arrivals of 23% in those 4 years.
Whilst the final and most recent numbers appearing on the ESO website for the year 2015 must be praised because it is the first time in almost 20 years that there has been a measured increase across the board for our tourism arrivals, I cannot help but wonder why the numbers are not higher after numerous years specializing in and investing billions of dollars towards a single industry.
For example: throughout the entire 19 year period, with all its highs and lows, between 1996 and 2015, our tourism industry has seen only a 3% increase in air arrivals, a 115% increase in cruise passenger arrivals, and an 11% increase in cruise ship arrivals and a total increase in visitor arrivals of 79%.
3% air arrival increase in 19 years! Why?
The PRIMARY difference between the Cayman Islands and any other Caribbean destination which offers first-class service and pristine natural beaches and surroundings is not simply safety, service and amenities – it is cost!
When any person, couple or family begins planning their vacation and choosing a destination, the FIRST item on the list of planning details is budget – budget will determine location, accommodations, activities, length of stay, chosen airline, coach or first-class, cruise or stay-over, what and where to eat, how much can be spent on miscellaneous buys and so forth.
When compared to other Caribbean destinations (or other alternative vacation destinations world-wide), Cayman is one of the highest. We have spent an enormous amount of time and money marketing ourselves because word-of-mouth is working against us due to the price-tag attached to a Cayman Islands vacation.
For example: if you are seeking an accommodation on Seven Mile Beach for a few days, as a couple you must factor double occupancy room rate + 13% government tax + 10% hotel fees + anywhere from US$30 to $60 per night additional hotel charges (this apparently covers your bottled water and other things).
So, a standard garden view room at one of our four star SMB hotels will have you paying US$400 + US$52 + US$40 + US$60 = US$552 per night for accommodations ONLY. Then, when we throw in air arrival tax, gratuities on meals, transportation, activities, sight-seeing and tours, nightlife, spa services and other vacation must-haves – we have the formula for a seriously over-priced vacation destination.
The accommodation tax in the Bahamas was reduced from 10% to 7.5% and the overall expense of a vacation there, though still high compared to some others, is much lower than Cayman. Jamaica charges their accommodations providers anywhere from US$1 to US$4 per accommodated room, per night.
In comparison, our government raised the local accommodation tax from 10% to 13% in 2012. This, coupled with a number of other tax increases, has caused the tourism product in the Cayman Islands to be priced far out-of-reach to the many millions of potential visitors who simply choose not to come to Cayman because the value-for-money simply does not make sense when there are equally entertaining, equally beautiful and even equally safe alternative destinations offering similar (and in some cases better) tourism products and services than our little paradise.
Let’s face it, this is 2017 – people are price conscious and would trade their soul to save a dollar, much less so-called safety and “friendly Caymanian people” – we cannot sell this to anyone anymore. People are much smarter with their money and thanks to the internet there is easy access to information and hundreds of price comparison travel websites.
Jump over to a Sandals Resort in Jamaica and you will be paying less than US$3,000 for a 7 day vacation as a couple for a suite that includes a butler, meals, drinks, some alcoholic beverages, a roster of water-sports activities, spa credit, some transportation, maybe even a tour or two, and don’t forget the mountain views and equally gorgeous beaches.
And because of the high price to do business in the Cayman Islands (especially when offering tourism services) there is no single resort with the ability to offer a truly “all-inclusive” experience here and compete.
Cruise visitors vs stay-over visitors
People choose a cruise vacation over a stay-over vacation for a number of reasons.
- They can visit a variety of destinations on one vacation period;
- Cruise visitors benefit from all-inclusive meals on-board and activities on-board;
- Many people choose a ship vacation because it offers more value for a buck (multiple destinations, all meals and accommodations included, etc);
- It helps with shortlisting an ideal location for a longer vacation in future
Point 4 is very important to Cayman. We are competing for the visitors who are “destination hunting” – we want them to choose Cayman for their future stay-over vacation without question.
According to official statistics, the average length of stay for a stay-over tourist in 2012 was 5 days compared to 8 days in 2005; there was no date provided for more recent years. Stay-over visitors in 2012 spent an average of CI$241 per night compared with cruise visitors who spent CI$84.
It is obvious that a cruise vacation is a sort of “economy vacation”. Clearly, we can see that the thousands that step on our shore for several hours may have chosen that route to avoid the high price tag associated with a longer stay. A cruise allows a visitor to swim on our beaches or enjoy a popular attraction for four hours for a fraction of a stay-over visit.
Therefore, the chance of converting that visitor to a stay-over visitor is already slim to none unless while on shore they are treated with a perfect experience that would be worth the money to extend – or they can just take another cruise next year and visit again for the same price or less than coming here only.
Many of these people have already done their vacation budgeting and comparisons and realize that they can see three or more destinations for less than spending four days in Cayman, and still get to see Cayman anyway!
The only way to change this is to find a way to reduce the cost of doing business and businesses can then provide more competitive rates with an all-inclusive experience.
While these are both very important components to our tourism success; it is no secret that stay-over (a.k.a. air arrival) visitors spend much more money during their visit than the cruise ship visitor.
The cost of our top destination façade
The irony of it all is that we have increased the tax as related to tourism services to fund a multi-million-dollar marketing campaign aimed at begging people to spend their life savings to visit us instead of “those other places” because… well… ‘we are CaymanKind’?
To get a clearer picture of exactly what we spend in an attempt to market our islands every year; here are the numbers, plucked straight from the most recent government budget:
|Budget Item||Amount||CI Budget – Page #|
|Tourism Public Relations Services||CI$2.579,261||271|
|Tourism and Business Development||CI$503,021||262|
|Tourism Industry Customer Service Training||CI$851,464||272|
|Tourism Product Enhancement Projects||CI$741,000||276|
|Tourism Education and Awareness Programs||CI$583,891||278|
Although “Cayman Islands Tourism Marketing” may have appeared on the Cayman Islands government budget under many separate names, I am sure most of us can agree that all of these budget items aim to achieve the same thing – marketing the Cayman Islands as a tourist’s only ideal destination.
I would not be opposed to such a budget if the 2015 Government Fiscal Operations report did not show me that our national income as it relates to Tourism Accommodation tax is a total of CI$21,500,000.
The income from Cruise Ship Departure Taxes totalled CI$10.3 million in 2015 and for some reason air arrival tax has no number in the 2015 column of the report on the ESO website.
I would say that the tourism pillar in the Cayman Islands is a very weak one in its current format, supported by media reviews and colourful advertising paid for by public funds earned through imposing ridiculous tax rates in order to finance a multi-million dollar tourism marketing campaign in an effort to increase visitor numbers to an over-priced destination.
It is failing to provide the level of growth we should have by now, it has been failing for years and no $200 million dollar cruise port or $55 million dollar airport expansion is going to save it – these are simply going to increase the costs of doing business and in turn the cost of a vacation and continue to deter the millions of visitors that could really turn this in to a truly profitable industry.
Cayman will never be a Dubai or a Monaco and to even make the attempt is laughable. Our geographic location makes us ideal for an all-inclusive, bargain family or couple vacation destination and here we are chasing the luxury, high-end image that is sinking us into public debt because the volume of visitors in this category is heavily outweighed by visitors planning a vacation on a budget.
The only number that has been steadily and drastically increasing as it relates to tourism in the Cayman Islands is the ministry’s budget in an effort to continue portraying Cayman as the best visitor destination in the Caribbean. As a country we should be veterans in this industry and we really do offer a beautiful, family-friendly destination and it is a shame that potential visitors and their families are discouraged to visit because of costs.