N Secretary General António Guterres has called the Caribbean Basin “ground zero” for the impacts of climate change. While countries in the region have a relatively small carbon footprint, the Caribbean will feel the impacts of climate change more acutely than other regions—particularly in the short term. At the same time, regional economies are heavily dependent on the tourism industry, which are also dependent on the Caribbean as part of their business model. Rethinking how tourism is conducted in the Caribbean and developing public-private partnerships will not only strengthen resilience critical for Caribbean nations and the tourism industry, but also support sustained economic development.
With stunning scenery, pleasant tropical weather, rich cultural heritages, and proximity to the North American market, tourism represents a significant and lucrative economic sector for the Caribbean. The decline of the Caribbean’s agriculture industry in the 1980s prompted tourism to become the region’s undisputed economic driver. While in 1970 the region received roughly 4 million visitors, it now receives approximately 28 million visitors annually. Today, tourism accounts for 13.9% of the regional GDP as well as 15% of regional employment.
Despite the importance of tourism to the regional economy and the growth in the number of visitors, the impact of growing tourism in the region has declined as the relative importance of the cruise industry in the region has expanded. According to the Caribbean Development Bank, while real tourist expenditure grew from $6.8 billion in 1989 to $13.1 billion in 2014, the average expenditure per visitor declined by 30.1%. Some of this is due to the growth of the cruise industry in the region. While a long-stay tourist spends approximately one week in their destination, a cruise passenger only stays one day in the country of arrival—with many choosing to stay aboard the ship. On average, a cruise ship tourist spends 94% less than a long-stay tourist. The result is fewer economic opportunities for local economies.
The Caribbean’s Climate Vulnerability
This reliance on tourism makes the Caribbean extremely vulnerable to external shocks, raising doubts about the region’s ability to provide long-term, sustained economic growth. While the region’s economy shrank as a result of both the 2008 financial crisis and COVID-19, the region is particularly susceptible to climate change and natural disasters—particularly hurricanes which have devastated regional economies. Scientists expect that more devastating hurricanes, droughts, heat waves, and other climate change-related events will pose increasing threats to the region. The danger of climate change and worsening natural disasters is not only a problem for the governments and peoples of the Caribbean but also for the private sector. Companies will face greater risks and may lose out on important business. The threat of more devastating hurricanes as well as biodiversity loss poses significant concerns for the profitability of Caribbean tourism. Extreme weather events and pollution endangers the region’s most valued tourism assets such as coral reefs, beaches, and tourism infrastructure including ports.
Given these concerns, it is vital for the private sector to engage with regional governments to strengthen climate resilience and climate-proof their businesses. While this should be done across the private sector, the cruise industry should play a leading role in supporting these efforts given that the Caribbean represents approximately 43% and 46.7% of total cruise passengers in 2019 and 2022, respectively. While cruise lines note that they have taken important steps, more can be done.
One way that governments and the cruise industry can collaborate to develop public-private partnerships is to increase the amount of time that cruise ships spend in port rather than traveling between destinations. By leveraging the positions of cruise ships as portable hotels, cruise lines can encourage individuals to arrive via alternative means and provide the opportunity for guests to spend greater time on location.
The Caribbean remains among the world’s most indebted regions—with an average public debt to GDP ratio of 90.8% in 2021. In addition to its high debt, the region’s middle-income status places further structural constraints both in terms of financial and human capacity to boost resilience and economic growth, and policy makers need to implement innovative solutions to not only boost the tourism industry’s resilience, but increase its competitiveness and secure long-term inclusive economic growth. Cruise lines can leverage their access to international finance to develop public-private partnerships that invest in key infrastructure.
While climate change represents an existential threat, there is a window of opportunity to reimagine how tourism works in the Caribbean with an eye toward a more profitable, sustainable, and equitable future. Looking for partnerships between Caribbean governments and the cruise sector may provide an important space to ensure more equitable development in the Caribbean while also ensuring that the cruise industry does not lose its most valuable asset—the locations of its cruises.
Editors’ Note: This article was included in our COP 28 special edition, which was published on November 21, 2023, and which you can find here. All articles were written with that publication time frame in mind.
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Promoting Sustainable Development through Tourism in the Caribbean
Photo by makenzie cooper on Unsplash
December 7, 2023
The Caribbean is reliant on tourism to keep the regional economy growing, but the cruise industry reaps most of the benefits and reliance on tourism also makes the region vulnerable to climate impacts. These are problems that can solve one another, write Alejandro Trenchi and Adam Ratzlaff.
U
N Secretary General António Guterres has called the Caribbean Basin “ground zero” for the impacts of climate change. While countries in the region have a relatively small carbon footprint, the Caribbean will feel the impacts of climate change more acutely than other regions—particularly in the short term. At the same time, regional economies are heavily dependent on the tourism industry, which are also dependent on the Caribbean as part of their business model. Rethinking how tourism is conducted in the Caribbean and developing public-private partnerships will not only strengthen resilience critical for Caribbean nations and the tourism industry, but also support sustained economic development.
With stunning scenery, pleasant tropical weather, rich cultural heritages, and proximity to the North American market, tourism represents a significant and lucrative economic sector for the Caribbean. The decline of the Caribbean’s agriculture industry in the 1980s prompted tourism to become the region’s undisputed economic driver. While in 1970 the region received roughly 4 million visitors, it now receives approximately 28 million visitors annually. Today, tourism accounts for 13.9% of the regional GDP as well as 15% of regional employment.
Despite the importance of tourism to the regional economy and the growth in the number of visitors, the impact of growing tourism in the region has declined as the relative importance of the cruise industry in the region has expanded. According to the Caribbean Development Bank, while real tourist expenditure grew from $6.8 billion in 1989 to $13.1 billion in 2014, the average expenditure per visitor declined by 30.1%. Some of this is due to the growth of the cruise industry in the region. While a long-stay tourist spends approximately one week in their destination, a cruise passenger only stays one day in the country of arrival—with many choosing to stay aboard the ship. On average, a cruise ship tourist spends 94% less than a long-stay tourist. The result is fewer economic opportunities for local economies.
The Caribbean’s Climate Vulnerability
This reliance on tourism makes the Caribbean extremely vulnerable to external shocks, raising doubts about the region’s ability to provide long-term, sustained economic growth. While the region’s economy shrank as a result of both the 2008 financial crisis and COVID-19, the region is particularly susceptible to climate change and natural disasters—particularly hurricanes which have devastated regional economies. Scientists expect that more devastating hurricanes, droughts, heat waves, and other climate change-related events will pose increasing threats to the region. The danger of climate change and worsening natural disasters is not only a problem for the governments and peoples of the Caribbean but also for the private sector. Companies will face greater risks and may lose out on important business. The threat of more devastating hurricanes as well as biodiversity loss poses significant concerns for the profitability of Caribbean tourism. Extreme weather events and pollution endangers the region’s most valued tourism assets such as coral reefs, beaches, and tourism infrastructure including ports.
Given these concerns, it is vital for the private sector to engage with regional governments to strengthen climate resilience and climate-proof their businesses. While this should be done across the private sector, the cruise industry should play a leading role in supporting these efforts given that the Caribbean represents approximately 43% and 46.7% of total cruise passengers in 2019 and 2022, respectively. While cruise lines note that they have taken important steps, more can be done.
One way that governments and the cruise industry can collaborate to develop public-private partnerships is to increase the amount of time that cruise ships spend in port rather than traveling between destinations. By leveraging the positions of cruise ships as portable hotels, cruise lines can encourage individuals to arrive via alternative means and provide the opportunity for guests to spend greater time on location.
The Caribbean remains among the world’s most indebted regions—with an average public debt to GDP ratio of 90.8% in 2021. In addition to its high debt, the region’s middle-income status places further structural constraints both in terms of financial and human capacity to boost resilience and economic growth, and policy makers need to implement innovative solutions to not only boost the tourism industry’s resilience, but increase its competitiveness and secure long-term inclusive economic growth. Cruise lines can leverage their access to international finance to develop public-private partnerships that invest in key infrastructure.
While climate change represents an existential threat, there is a window of opportunity to reimagine how tourism works in the Caribbean with an eye toward a more profitable, sustainable, and equitable future. Looking for partnerships between Caribbean governments and the cruise sector may provide an important space to ensure more equitable development in the Caribbean while also ensuring that the cruise industry does not lose its most valuable asset—the locations of its cruises.
Editors’ Note: This article was included in our COP 28 special edition, which was published on November 21, 2023, and which you can find here. All articles were written with that publication time frame in mind.
