Presentation by Honourable Edmund Bartlett C.D., M.P., Minister of Tourism, Government of Jamaica at the seminar on the topic, 'Tourism Industry Reform: Strategies for Enhanced Economic Impact' on May 25, 2017 at the 47th Annual Meeting of the Board of Governors in the Turks and Caicos Islands.

1. 47th
Annual Meeting of the Board of
Governors
Presentation by Hon. Edmund Bartlett, CD; MP – Minister of Tourism, Jamaica
AGENDA FOR TOURISM REFORM IN THE CARIBBEAN: THE
JAMAICAN EXPERIENCE
1. Tourism sector in the region
The Caribbean region continues to enjoy tremendous prominence as one of the
world’s leading tourist destinations. Despite early forecasts of expected downturn in
tourism performance for 2016, amid volatility in main source markets such as The
USA and parts of EUROPE owing to Brexit, The US Presidential Elections, and terror
attacks in Brussels and in other European cities, the Caribbean witnessed an
unprecedented growth of 4.2% in tourist arrivals to the region in 2016. The region
welcomed a historic 29 million visitors in 2016, over 1 million more visitors than in
2015. Tourism growth in the region outpaced the global average of 3.9 %. The data
for 2016 also indicate that Cruise tourism in the region is booming as cruise passenger
arrivals grew by an estimated 1.3 per cent, to approximately 26.3 million in 2016.
In the broader context of the regional economy, the tourism industry remains the most
vital source of earnings and economic activity for most Caribbean islands with region
wide tourism revenues estimated at over US$27 billion. Tourism is the single largest
generator of foreign exchange in 16 of the 28 countries in the Caribbean and also the

2. sector receiving the most FDI. The region has a higher proportion of total
employment and percentage of GDP derived from tourism than any other region in the
world. It is estimated that 1 in every 4 persons is employed by the tourism-related
activities and the sector accounts for 41 % of all exports and services in the Caribbean
and 31% of all gross domestic product.
These economic indicators confirm what most of us, as key players and stakeholders
in the sector, already know; that is, unmasking the full economic potential of tourism
remains at the heart of the region’s quest to promote sustainable and inclusive growth
that will move Caribbean populations from poverty and relative poverty to prosperity.
It is indeed the pressing question of how tourism can be leveraged as a source of local
economic development (LED) and sustainable economic livelihoods for increasing
numbers of ordinary Caribbean nationals that has necessitated the urgency of tourism
reform in the region.
2. The challenge
Whilst the region’s tourism sector is booming, tourism authorities in the Caribbean
certainly cannot afford to become complacent. Regional players in the tourism
industry must continue to explore new and innovative strategies to boost and expand
the vast economic opportunities that can be generated both directly and indirectly
from tourism and tourism-related activities. Specifically, our eminent tourism master
plans must foremost address the perennial concern among a large number of citizens
that the tourism sector has failed to forge robust linkages with the wider domestic
economies of Caribbean territories. This is in the face of the expansion of the all-

3. inclusive phenomenon; a development which many see as benefitting only large
hoteliers and a select few or who Jamaicans call “the big man”.
While this recurrent concern about insufficient linkages is generally exaggerated we
must accept its broader implication and profundity and as policymakers and
stakeholders we must immediately and decisively respond to this challenge by
identifying a comprehensive multi-sector policy and implementation framework for
strengthening current tourism linkages and identifying new areas of potential linkages
with a view of maximizing the potential of the tourism sector for generating
sustainable economic livelihoods for a larger number of locals, particularly those
residing in communities in and around resort areas.
3. Leakage
One of the main phenomena that undercuts the overall benefit of tourism to the people
of the region is leakage. Leakage can be defined as “the unwanted leaving of money
from a country as a result of taxes, wages, imports, and profits that are paid outside
the country.” Leakage prevents money from flowing back into Caribbean countries
and and stimulating local economic development .Developing countries experience a
higher rate of tourism leakage than the rest of the world. It is estimated that the rate of
leakage among Developing regions range from 70% for Thailand to 80 % for the
Caribbean to 40 % for India. According to a study conducted by the United Nations
Environment Programme (UNEP) found that “only $5 out of every $100 spent on a
“vacation package” (typically, all-inclusive) by an overseas traveller from a developed
country stays in the developing country’s economy.”

4. Some leakages such as air travel, airport and booking expenses as well as hotel fees
are unavoidable, given the dominance of multi and trans-national corporations in the
global tourism. Indeed in most all-inclusive package tours it is estimated that about
80% of travellers’ expenditures go to the airlines, hotels and other international
companies (who often have their headquarters in the travellers’ home countries), and
not to local businesses or workers. Beyond these standards leakages, however, there
are other types of leakages experienced in our tourism sector that can be significantly
reduced.
The main type of linkage experienced by Caribbean countries is import leakage. This
commonly occurs when tourists demand variants of equipment, food, beverages,
supplies and other products that the host country cannot supply and thus have to be
imported, especially in less-developed countries. The average import-related leakage
for most developing countries today is between 40% and 50% of gross tourism
earnings for small economies and between 10% and 20% for most advanced and
diversified economies, according to UNCTAD. The Caribbean is known for its high
“economic leakages” averaging around 70%, which means that for every dollar earned
from the foreign tourists and excursionists, 70 cents is lost to the importation of goods
and services (Pattullo, 1996).
In Jamaica, 30% of Travel & Tourism spending leaks out of the economy through
imports. The manufacturing industry requires imports amounting to 38% of sales. A
Tourism Demand Study in 2016 found that Jamaican hotels import about one-third of
their food and fixtures, on which they spend around $70 billion. Specifically, the study
found that the annual business leakage to imports amount to $65.4 billion in the

5. manufacturing sector, representing 33% of the total annual expenditure by the
tourism sector on manufactured goods and between $1.6 billion and $5 billion in the
agricultural sector, representing 8.5 per cent to 25.5 per cent of annual expenditure on
products. Jamaica earns about US$2 billion ($240 billion) per year from tourism.
4. Strategies for combatting leakage
It is clear from the evidence that import-related leakage, in particular, poses a
tremendous threat to sustainable tourism development in the region and cannot be
ignored any longer. Whilst it is neither prudent nor optimal for Caribbean states to
embrace protectionist policies at this point in our development, we can however
achieve successful import substitution by increasing our levels of competitiveness and
productivity, particularly within the micro, small and medium enterprises sector of our
economies. Indeed if tourism sector is to deliver on its promise of sustainable and
inclusive growth for all, it is crucial to clearly identify areas where strong
opportunities exist for increased consumption of local goods and services in the sector
and to implement strategies for linking it to local industries for the overall benefit of
the domestic economy.
A strategic plan of action for reducing leakages and strengthening linkages should
have the five following elements:
1. Identifying areas where there is strong opportunity for increased
consumption of local goods and services in the tourism sector;
2. Increasing understanding of the supply chain for the industry;

6. 3. identifying specific constraints and limitations hindering tourism linkage
with the domestic economy;
4. estimating the value of leakages due to expenditure on imported goods and
services; and
5. Determining the receptivity for use of local goods and services within the
sector.
5. The Jamaican Experience : The Tourism Linkages Network
In the context of Jamaica, we have already identified the development of economic
linkages between the tourism sector and the other sectors of the economy and
strengthening the benefits derived from the industry by local residents and
communities as the main thrusts of our Strategic Business Plan for the next five years.
As Minister of Tourism for Jamaica, I have responded to the demand for strengthening
of tourism linkages through the creation of The Tourism Linkages Network in 2011
which is supported by a Tourism Linkages Council, made up of public- and private-
sector partners who oversee the coordination and implementation of effective and
sustainable strategies, which strengthen and facilitate linkages.
The Jamaica Linkages Network continues to strengthen and encourage vibrant
linkages through a number of initiatives focused primarily on human capacity-
building, assisting micro, small and medium-sized enterprises with their development,

7. greater integration of local products and services into the tourism product and
expanding the country’s potential to tap into new segments of the tourism market.
6. Five Pillar of Growth
The creation of the Linkages Network was in-keeping with what I have called by Five
Pillars of Tourism Growth, which our Ministry of Tourism is currently focusing on, as
we seek to transform the island’s tourism sector, deepen linkages and seek to achieve
our earmarked g target of 5 % annual growth over the next five years or what we have
dubbed “5 in 5”. These five pillar are:
 Identifying and aggressively targeting new markets
 Offering new products (diversification)
 Increasing investments
 Building New Partnerships; and
 The Renewal of Human Capital.
7. Five Networks
Underscoring these five pillars of growth, are five networks, incorporating several key
sectors, that will ensure greater integration of tourism with the wider society and
thereby expanding the benefits of tourism to all Jamaicans. We are confident that our
networks can increase the positive spillover effects of tourism, stimulate employment

8. and entrepreneurship, promote brand Jamaica and help to retain more of the country’s
foreign exchange earnings.
Our Five Networks are;
 Gastronomy – projected beneficiaries to include farmers, local restaurants,
distilleries and breweries, pan-chicken vendors, crab vendors, cook shops,
fisherfolks, food festivals etc
 Health and Wellness- promote medical tourism products and services such as
spa treatment, nature healing, medical diagnostic, dental and medical surgeries.
; develop key attractions
 Entertainment and Sports - capitalizing on Jamaica’s sporting excellence
and internationally-recognized culture; expanding the inclusion of local
creative and entertainment products in the hospitality sector as a means of
generating income for small businesses and local entertainers
 Shopping- creating enabling condition for the growth of local brands;
facilitating the establishment of shopping villages to include flagship stores for
international designer brands and hosting of shopping events (a la Black
Friday
 Knowledge - positioning Jamaica as the knowledge centre (think- tank, data
bank) for tourism information in the region;

9. 8. Capacity-building for MSMES
The time has come for the tourism sector to harness its full potential to be a key driver
of local economic development. We have recognized that Micro, Small and Medium-
sized Tourism Enterprises (MSMTES) in all areas but especially those in agriculture ,
attractions and tours, manufacturing , creative and cultural industries must be
strategically positioned to lead tourism renewal in Jamaica and promote local
economic development.
Jamaica’s tourism sector comprises a vast network of MSMEs including: artisans and
craft vendors, attractions and tours, transportation, beauty shops and textiles, duty-
free stores, restaurants and eateries, bed and breakfast, guest houses, farmers and
distributors of hotel supplies. The vast network of MSMEs constitute the backbone
of the sector; contributing significantly to the authenticity and quality of the tourism
experience, enhancing destination competitiveness and contributing to enhanced
brand image, the forging of positive local networks and increased productivity
(Griffiths 2013). They are recognized as important drivers of economic growth and
development in Jamaica by creating employment, facilitating wealth creation and
forming the backbone for private sector growth and expansion.
The activities of MSMEs also create value chain within the communities and environs
of their operations. Community-based tourism enterprises (CTEs), for example,
pursue sustainable tourism and return economic, cultural, social and environment
benefits to the communities in which they operate, either in whole or through joint

10. ventures. They promote the local tourism value chain through linkages, where
appropriate, to agriculture, arts and crafts, food service and related small businesses in
the communities (MOT 2014). Many are also involved in various forms of
community outreach.
We have recognized that there is significant scope for the expansion of the MSME
sector which will allow for local entrepreneurs to capitalize on the vast opportunities
of tourism growth in the island. But first we have to help these entities to build their
capacities to meet the demands. We have already identified the main challenges
facing MSMEs such as: high level of informality , lack of commercial orientation,
lack of market information and market access, insufficient access to capital for
upgrading, limited customer training and low ICT diffusion.
9. Responses of the government
I have responded to the demands of the MSME sector in Jamaica by launching the
small and medium-sized tourism enterprises loan facility in September of 2016. The
revolving loan facility will provide players in the industry with access to capital. It is
being financed by the Tourism Enhancement Fund (TEF) and administered by the EX-
IM Bank Jamaica. A total of $1 billion will be allocated over the next five years by
TEF to fund the initiative, starting with the availability of $500 million as of
September 2016. Individual loans will vary from a minimum of 5 JMD to a maximum
of 25 JMD (with interest rate of 5 % per annum). This loan facility is aligned to new
investments, new markets and new products as well as human capital investments.

11. Additionally, a special $20 million revolving loan initiative was launched in 2016
between The Tourism Enhancement Fund and JN Small Business Loans which
provides financing options for community tourism enterprises at reasonable interest
rates. This is intended to boost the compliance among small tourism properties,
attractions and businesses in various parts of Jamaica.
In 2016 we also initiated The National Community Tourism Portal This portal which
will be an excellent marketing tool designed to help local community-based tourism
enterprises keep pace with the competition by: building awareness of community
tourism in Jamaica; providing comprehensive and engaging information on Jamaica’s
community tourism product; providing an easy means for making community tourism
bookings; and providing Community Based Tourism Enterprises (CBTEs) with
affordable and cost effective e-marketing services. The TPDCo also conducts tourism
awareness activities and provides technical assistance on ecotourism, Bed & Breakfast
(B&B), agro-tourism, cultural heritage tourism, and arts and crafts development
projects.
10.Closing statement
In closing, having already initiated discussions with several airlines and tour
companies to introduce new locations to their Jamaican itinerary and having plans
already afoot to target promising markets such as Russia, China, Brazil, Colombia,
Chile, Panama and as we continue to aggressively pursuing a multi-destination
marketing arrangement with Cuba and the Dominican Republic, we are optimistic that
Jamaica will continue to experience great surge in tourism arrivals. We are confident

12. that with our current initiatives and the others that we plan to roll out very soon, we
will position ordinary Jamaicans from all walks of life to benefit from this surge.
---End--
.