Inflation boosts government’s tourism revenue
(CNS): The number of overnight guests visiting the Cayman Islands this year is now close to pre-pandemic levels, providing a welcome increase in government revenue, which has been boosted by inflation that has led to an increase in hotel room rates. Tourism Accommodation Taxes and Fees have already surpassed the annual budget forecast in the first six months, according to the Ministry of Tourism, and based on this trend, total revenue this year is expected to surpass the total for 2019, which was the highest on record.
Between 1 January and 30 June, revenue from tourism taxes amounted to CI$28.8 million, which is CI$12.4 million more than the mid-year projection figure in the budget, and around CI$3 million over the target for the whole year, which means that the government has already collected more money in six months than it expected for the twelve months of 2023.
The growth was said to be due to both marketing and the support and commitment from tourism partners and stakeholders. But it is also helped by an increase in the average cost of tourism accommodation. But although Cayman is one of the most expensive Caribbean destinations, the rising room rates do not seem to be putting visitors off just yet.
In a release from his ministry, Tourism Minister Kenneth Bryan said that between January and June, 235,370 stayover guests visited the Cayman Islands, which is 84% of the number of overnight visitors in the first six months of 2019, Cayman’s busiest year to date.
“Tourism performance over the first half of the year has surpassed expectations and underscores the significant rebound in our tourism industry,” he said. “Revenue collection influenced by the increase in the Average Daily Rate (ADR) of accommodations over the past year is indicating a strong and sustained interest in the Cayman Islands as a premier travel destination.”
Efforts to improve air connectivity have also paid off significantly, the ministry stated ahead of Monday’s announcement that Cayman Airways would be offering flights to Barbados. According to the MoT release, additional new flights and direct connections have resulted in increased bookings.
Over 83.6% of guests came from the United States, 7.5% from Canada and 4.4% from Europe, similar to figures recorded in 2019. Over at the port, cruise passenger arrivals for the first half of the year amounted to 738,462 passengers, or 73% the pre-pandemic visitor numbers of 2019.
Overall, the re-growth of tourism has been bolstered by robust performance in traditional source markets and emerging regions, as well as inflation. Tourism Director Rosa Harris said the revenue collections demonstrated the resilience and adaptability of the Cayman Islands tourism industry.
“I am thrilled to see the numbers are ahead of our projections for the first half of 2023, particularly since revenue and visitation targets for 2022 were also exceeded,” she said. “As we look ahead to the remainder of 2023, I am optimistic about sustaining this positive growth trajectory and maintaining the Cayman Islands’ position as a leading travel destination in the Caribbean. The Department of Tourism is also working hard to build on this momentum by continuing to implement innovative strategies to attract more visitors to our shores.”
Despite the healthy revenue collected from tourism, the opposition has criticised the government for its failure to roll out a clear cruise policy, given the expected decline in the headcount of cruise visitors. Deputy Opposition Leader Joey Hew said the ministry has no real idea what to do about the decline and no strategy to manage it.
“The minister sees no need to develop a fully considered cruise tourism strategy during a decline in the cruise business, with the jobs of several thousand families dependent on cruise tourism at risk,” he said. “It is very likely that the decline will be more than 25% and will last longer than… three years.
Hew stated that if the Progressives were returned to office, they would begin a review and a national discussion about the future of the sector in their first year. Falling short of saying they would re-start their previous plans for a cruise port, which proved to be extemely controversial and ultimately very unpopular, he said they would identify the changes that are necessary in the short term and the long term to plug the gap.
Speaking on Radio Cayman last week and in a video message on social media, Hew added that the minister did not appear interested in a national conversation about cruise tourism. He also took aim at the numbers, stating that it was not hard to surpass targets that are set so low.
- Fascinated
- Happy
- Sad
- Angry
- Bored
- Afraid
Taxes is not a bad word
https://amp.theguardian.com/politics/2023/jul/26/tax-relief-system-needs-overhaul-to-prevent-abuse-say-mps
The collection of taxes provide much needed government revenue that assist with infrustral growth and development to build roads and affordable homes
https://www.gov.uk/government/news/homes-england-launches-new-approach-to-transform-places-and-boost-housing-supply
With the Cayman Islands being a jurisdiction with no direct income, corporate or sales taxes at a time in history when we are all experiencing a digital global fourth industrial transformation, with only one quarter of the worlds population utilizing and conducting online digital business transactions, i believe that our country could and should seriously consider changing our tax collection process and proceedures for organizations who benefit from online digital sales when they register there business here in the Cayman Islands to do business online
https://trade4devnews.enhancedif.org/en/news/five-things-know-about-least-developed-countries-and-ecommerce
With more than 1.3 billion online shoppers in 2020, our giant global marketplace presents countless opportunities for people in the world’s poorest countries if the digital divide can be overcome.
An eCommerce boost could mean much for country economies, and the possibility of greater outside investment.
https://www.cpapracticeadvisor.com/2021/10/13/latin-american-countries-lead-world-in-taxing-digital-services/45801/
Access to new markets and the potential for job creation and trade growth could increase people’s earnings and there is a lot people in LDCs can do pending affordable connectivity, tools and training.
In addition, certain barriers for minorities, women, youth and small businesses could be overcome, thereby levelling the playing fields through increased inclusivity and incomes
https://unctad.org/press-material/global-e-commerce-sales-surged-29-trillion
A surge was seen in the number of online shoppers and sales which jumped by 12% and stood at 1.3 billion people, or one quarter of the world’s population.
An increase in a structured digital online platform connectivety for the other 75% of the worlds population not only create jobs in undeveloped geographic areas, increase the circular flow of cash or money in the global economy, but it also creates taxable jobs and income for governments to maintain infrustructual growth, building maintaince, pay government employee wages and continue to provide health care, education and emergency services
https://www.google.com/amp/s/abcnews.go.com/amp/Technology/AheadoftheCurve/story%3fid=5529989&page=1
https://www.newscientist.com/article/dn12339-laptop-for-poor-countries-may-be-sold-commercially/
The United Nations has an ambitious agenda to erradicate poverty by 2030.
While this is applausable, the challenges on a global scale requires wide scale contributions and co-operation.
For example, the global varience in education levels, awareness, and unstanding require great effort.
However, when we attend college to aquire a higher level of education, one begins to be exposed to classes like Economics, micro and macro that explains what , how and why domestic economies fluctuiate up and down, stratigies to expand growth and development, how to create jobs etc
Then college students are exposed to other classes like Quantative Management that explains monetary policy strategies, International Management that explains the various types of trade and investment that generates income, create jobs and investments and stimulate economies globally
This opens up the minds of college students to better understand there domestoc economy, how it works and how it relates to the global economy
College students are then offered classes like Strategic Managenent that explains what is required to start a successful business, like a proper business plan, courses in Accounting and Economics etc…..
These classes collectively equipts and prepares college students with the necessary knowledge, a better understanding and tools to partiscipate in the upper level of decision make in there economy
A good example of understanding the big picture, goes as far back as far back as the 80’s and 90’s when the world witnessed an evelution of wide scale technical inventions and supply distribution of cable television and satalite dishes
This evelution of media information via television with movies, advertisements and kids educational programs allowed organisations like the United Nations to share and market information on poverty in countries like Rawanda and Syria about people living in sepressed malnurished conditions like starvation, poor living conditions, no educational opportunities etc… and appeal to the world with charitable contributions on television advertisements
This United Nations Marketing effort drew little attention and contributions from the developed wold leading economies like the UK, the US and Canada, resulting in a UN Agenda to erradicate poverty
While this was happening, the worlds population increased putting pressure on two thirds of the worlds oceans fisheries where being depleted, less creation of jobs, infrustrial and development growth, meaning that people were earning less on a wider scale to get by, which begged for an injecterjection of inteventions to improve and increase the means of mass education, better health care and prosperity
In other words, a less educated population that is not aware of these issues meant higher taxes, higher unemployment rates, an increase in crime, higher monetary policies and less income to get by on.
With the monetary decision makers of the 80’s and 90’s like Allan Greenspan that made way for the supply and inventions of technical job creation in cable and satalite television that increased the circular flow of cash and income, decreased or stalled as the population increased and the supply of the technical television industry were exhausted
With the World Economic Fourum, the World Trade Organization, the World Bank and the United Nations all looking at global issues, where as each country is concentrated on there national or domestic issues and each country all differ on views from one country to another
For example, while businesses like auto makers in Europe and Asia are looking at manufacturing and cost savings and reloxating manufacturing plants from the US and Canada to less geographical labor and tax cost, jobs and income are lost in those countries and jobs and income created in other geographical locations
The global view of an increase in online shopping, that is viewed as the next technical ecinomical growth, since the television cable and satilite dish era, is viewed to stimulate the global economy
However, as cost increase, wages deceease and unemployment numbers soar, only pockets of geographical economic prosperity appear to be witnessed and much effort is required educationally and academically for a global equalibriun to be reached spreading out the prosperity and economic growh and infrustrial development
Inspiring stories:
During the Great Depression when 170,000 business closed, lots of laid-off workers went on to start their own businesses rather than dropping out of the labor force
https://www.huffpost.com/entry/the-recessions-effect-on_n_843679/amp
More than 170,000 small businesses in the U.S. closed between 2008 and 2010, according to analysis by the Business Journals of U.S. Census Bureau data and many who were laid off during the recession, started small businesses because they had no other choice.
https://www.huffpost.com/entry/us-lost-more-than-170000-small-businesses-2008-2010_n_1702358/amp
The proportion of commercial office mortgages where borrowers are behind with payments is rising and only the high-profile defaults are making the headlines.
https://www.google.com/amp/s/amp.cnn.com/cnn/2023/04/10/business/commercial-real-estate-banks-offices/index.html
About $270 billion in commercial real estate loans are held by banks and will come due in 2023 according to Trepp.
Roughly $80 billion and nearly a third of these commercial loans are on office properties.
Add this to the compitition of increased manufacturing online digital sales that have caused a large number of outlets in malls to close leaving commercial malls retail spaces empty and malls constantly seeking sustainable income solutions like mixed-use re-development options and a clearer economic picture will begin to develop on the domino effect of lost revenue, credit defaults, bankruptcies and foreclosurers
Which is why a mature conversation on re-developing of prime real estate is important to understand why and how so much effort are going into re-designing modern mixed-use developments with office spaces, medical clinics, luxury and affordable housing, a range of centrally located pre-school and upper level educational arrangements, merchant and retail stores, hotels, restaurants, day care and after school civic society facilities with leisure and recreactional activities to achieve a balance between senic option attractions to increase activities and foot traffic for businesses to remain operational
Maybe nobody else read your diatribe, but I did. Well done!
Inflation means those “boosts” in revenue are worth LESS! We need some fundamental economic education in this country. More dollars do not necessarily mean you’re richer when your standard of living continues to decline.
Actually not. Increased revenue due to inflation on the underlying asset (hotel room rates) is neutral from the perspective of the gummint. Neither better or worse due to inflation (they get more as prices go up due to inflation). It’s sort of like a cost-of-living raise for the CIG. Not defending inflation, it hurts us all. But your statement is incorrect.
Meanwhile many other Caribbean destinations have far exceeded their 2019 statistics in terms of visitors numbers. Turks and Bahamas being some examples.
At the expense of thousands of residents struggling to stay afloat.
We are forgotten souls.
Stay-over tourism is what we want, yes? I am also struggling, but I am glad to see these numbers. MUCH better than cruise ship numbers.
Trickle down economics is a capitalist lie.
You’re gonna love 10,000 tomorrow!
The problem is what exactly are these political kooks going to waste this revenue on???
More asphalt at the detriment of the environment.
More unnecessary CIG jobs, of course
Don’t worry about it. It has always been that way! They get all they can for themselves, and very little is left for bettering things for anyone else. It’s the way politicians work.
Once they are elected, they think they are gods!
A Government which benefits from and praises inflation!!!? WTF!??
Exactly! Countries have been struggling to keep inflation down, here we are popping shampagne and celebrating that it is up on the Rock.
No champagne for the poors. Gey back to work!
welcome to wonderland.
tune in tomorrow for more loopy news….
So basically hotels doubled their price and doubled their revenue but crying to increase minimum wages.
Protect the profits, damn the poor.
Imagine the contributions to CIG General Revenue if DART hotels weren’t allowed to also pocket the 10% Government room taxes? Do Kenny or Wayne have any clue on state of drawdown on combined USD$37.1mln NPV abatements and waivers as amended in May 2016? What is the current status of DART’s promised $400mln in new real estate projects by Feb 2025? These should have been clocking down to zero in realtime. Roy admitted he and PPM weren’t going to bother keeping track of these limited contract items, despite the significant public interest in supervising these commitments and value restricted abatements and waivers. Who do our governments work for that they don’t feel they need to keep track of every penny of this foregone public revenue?
well done dart again.
cayman would be nowhere without you!
The inverse is more true: Dart would be nowhere without Cayman; don’t forget, he burned his bridges almost everywhere else of merit.
Really? How so?
I’m new here – it seems to me that all the decent things in Cayman were built by expats, most obviously Camana Bay.
By contrast, everything the locals run – the dump, public transport, Cayman Airways route planning, etc. – seem to be a complete sh#t-show.
What am I missing?!
don’t say it like it is!!
I mean if you had a line of 1 billion you REALLY gotta try hard to not get something decent in return for millions of doll-
Oh my god.
Opposition wasn’t interested in a national conversation either as they tried to shoehorn the port through
just a by-product of the wealthy international super-rich who are awash with cash. if a real international recession hits cayman will be left high and dry.
this windfall is nothing to do with no-plan-pact.
NO. This is not a by-product of the wealthy; this is a by-product of the working middle class. Look at the photo above. You see rich people there? No, you don’t. You see hard-working people who choose — currently — to spend their money here. Let us never forget that the middle class drive the U.S. economy and ours.
cig should be thankful to the private sector who are generating this revenue…just a pity that this money is then being wasted by cig and the civil service…..
That’s world class civil service, bub.
But yet people had so much to say regarding Tourism having no substantial profit to the island….(sips tea quietly)
It’s still true. There’s a billion dollars of revenue. We collected about 30M in the busiest half of the year. Put down your tea and get a calculator.
Who are these “several thousand families dependent on cruise tourism” really? Maybe a dozen or so millionaire Caymanians, and the rest are permit workers for failing businesses. Let it shake out.
Absolutely correct. Plutocracy.
Long live King Kenny, the best tourism minister in all of the land!
Good one. We all had a laugh, thank you.