SECTORAL DEBATE 2008
PRESENTATION
BY
DR. WYKEHAM McNEILL, MP
OPPOSITION SPOKESPERSON ON TOURISM
June 3, 2008

Firstly, I am working with the assumption that we all want what is best for Jamaica. It is my role as Opposition spokesman on Tourism to assess the things that are being done by the government in this area.  I will support them when I think that the actions are correct, but I will critique and offer alternatives when I disagree. I do so not in my individual or personal capacity but as the representative of what are legitimate interests of our country.

Secondly, I want to say to the minister that governance is difficult. It is difficult because in our democratic society governance means constantly consulting with the people, the stakeholders!  It means listening to them and ensuring that our polices reflect their inputs. If you take the ministers words at face value I don't think that in principle we are at odds in this matter of governance.  The reason I make this statement here today is that there are some concerns that we the Opposition have about some procedures and actions at the official levels of the industry, and as they relate to governance and we will high- light these concerns later in the presentation.

Mr. Speaker

We in the opposition are extremely proud of our track record in tourism. We have laid a substantive base for the continued development of the industry.

While in government we were able to accomplish a number of things, among them we were able to

• 1. Substantially increase our numbers in visitor arrivals, setting various mile stones on the way. For example for the first time we had

a) More than a million cruise ship arrivals

b) More than three million visitors in a year.

C) More than a million stopover visitors from the US market in one year.

2. We were able to pass regulations to make the industry more environmentally friendly and sustainable.

• 2. We increased the number and diversity of attractions.

4. Attracted more investments to the industry than ever before in the history of our country

5. And we put in place the Infrastructure to sustain a modern tourism industry poised to achieve rapid growth.

Mr. Speaker                                                                                              

These achievements did not come about by accident but instead they came about because of painstaking planning, investment promotion and facilitation. An important element in this equation was embodied in the tourism Master plan.

While in government, we undertook the process of preparing a Master Plan for sustainable tourism development.  Amongst other things the process achieved three goals.

• 1. It engaged the people especially the stakeholders in an extensive consultative planning process.
• 2. It helped to raise public awareness about the importance of Tourism and gave people a sense of inclusiveness in the planning process.
• 3. It gave us a consensus on the general path forward for the development of Tourism in Jamaica.

While the Master Plan has been and continues to be a very important and useful tool we in the Opposition support the initiative to review it. We do this because we understand that the only constant in life is change.

However in keeping with canons  of good governance I would like to urge the Minister that he ensures that during this review that there is a proper consultative process similar to that undertaken in preparing the original Master Plan.

Mr. Speaker

Amongst the most critical recommendations of the Master plan was the need for reform and strengthening of existing institutions.

The two main agencies in the Ministry at the time were the Jamaica Tourist Board dealing with marketing and the Tourism Product Development Company, that has responsibility for product development.

The first thing that was tackled was the reorganization of the Jamaica Tourist Board and here credit must be given to a very strong team led by Mr. Dennis Morrison and the then Director of Tourism Mr. Paul Pennicook. Prior to their appointment, there were many complaints about the Jamaica Tourist Board. It was felt that too much of its resources were being spent on administration. It had too many offices, irregular advertising campaigns and that in general it was inefficient.  A total restructuring was undertaken which saw the Board consolidating its operations from five offices in the USA to one. The JTB's internal systems were revamped and there was strategic planning of the marketing program which led to the structured placement of advertisements. The end result of these moves was that it transformed the JTB into one of the most efficient national tourism organizations in the world allowing it to win many top honors as a bureau at the World Travel Awards.

During the restructuring process a decision was taken to address the problem of Jamaica's dependence on the US market, with approximately 70% of our stopover arrivals coming from the USA and 70% of these from the Tri State area.  We recognized that we had to diversify our markets. We had to decrease our exposure to the consequences of any problem in the US market. Hence, a marketing program was fashioned specifically to direct business from the Canadian, British and Continental European Markets to Jamaica.  Canada was established as a region on its own, separate from the United States and a dedicated office was opened in Germany to service the continental European region.

The positive results of this initiative have been evident in the great increases in arrivals from these markets over the last few years. Later in my presentation I will return to this issue.

Simultaneously, a restructuring of the Tourism Product development Company was undertaken, making it more efficient so that it could better achieve its goals of maintaining high standards in our industry, and working to develop attractions. However, we understood that the most important resource of our tourism product is our people and therefore a special emphasis had to be put into training.

We developed partnerships with HEART and other training institutions so that we could move towards a highly trained work force in the industry.

 An important part of the structure of TPDCo, are the resort boards.  These resort boards are active bodies in each resort area. They are able to get information about the needs of the specific resorts, because they incorporate all the stakeholders. These bodies are an important element of that partnership between the Government and the communities on the ground. They are able through their chairpersons to take the needs and important issues of the resorts to the level of the Board of the TPDCo where they can be addressed.  It also allows for transparency as expenditures and decisions are discussed at this level.

Another recommendation of the Master Plan was for the formation of a dedicated fund to support the process of Tourism Development. Therefore, the Tourism Enhancement Fund was established. I am sure the Minister will agree that it has turned out to be one of the boldest and most important developments in our tourism industry.  This agency was formed, as its name implies, to enhance what we have to offer as a tourist destination. We would be able to use the funds in a systematic and planned manner to assist with the building of attractions, enhancement of our historic and cultural assets and the funds would be provided on a predictable basis.

Mr. Speaker the TEF is one of the most important institutions developed for the tourism sector for a long time.  The Minister knows that handled correctly this innovation can go a long way to ensuring the success of our tourist industry.

INFRASTRUCTURE /INVESTMENT

Mr. Speaker, not only did the Master Plan recognize the need for institutional strengthening but in order to achieve an enhanced visitors experience and to attract investment we needed to upgrade our physical infrastructure and create a platform on which to develop our industry. With this in mind the then government undertook a massive infrastructural development that included the development of

 1. Roads -North Coast Highway phases 1, 2 and 3 (which is underway).  Highway 2000 

2. Upgrading of water supply systems,- Logwood, Great  River.

3. Building of sewage systems in many resort areas.

4. The upgrading of the Donald Sangster and Norman Manley International Airport.

Mr. Speaker these projects have laid the foundation for the tremendous investment that we have seen in Jamaica.  We have seen the growth in Spanish investors, and these are important given the number of rooms that they have built, but we also have the Ritz Carlton, the massive upgrading of the Wyndham Rose Hall, the Palmyra group and plans for Harmony Cove. But, we have also seen local investors like the Sunset group, Couples and the Courtleigh who have been very successful as well as the many local attractions that have been developed.

Mr. Speaker, none of this was by accident as I said it was a well planned process involving not only the Ministry of Tourism but also nearly all government Ministries and agencies including Jampro with investment, transport, works, water .Everything was coordinated and I want to go back to what I said earlier about diversification.

 We had JTB targeting not only USA but placing special emphasis on Europe and Canada. We targeted investments out of Europe especially from Spain and Germany, working with our partners to get new airlift out of these markets.

Mr. Speaker, the result of these initiatives is that while the USA still remains our dominant market the growth out of Canada and Europe has been impressive.

Mr. Speaker the wisdom of these moves was proven last year when, because of the US passport initiative arrivals out of the United States decreased by 4.9%, and yet we were still able to record a positive growth in tourist arrivals for the year. Largely due to increases last year out of the Canadian market of an impressive 24.1% following a 31.4% growth from the previous year 06, and a 12.8% growth out of Europe last year coming after a 17.1%  the year before.

So, Mr. Speaker the foundation has been laid for the development of a successful Tourism Industry in Jamaica. As a country we should all be proud of the accomplishments in this area to date, but Mr. Speaker the work has to continue towards the goal of making us #1tourist destination in the world.

SO WHERE ARE WE NOW

TARGETS

We are confident that while in office we did much work to lay the basis for growth in the sector for this year. So we would like to see as much growth in visitor arrivals as possible, because this means more jobs, more foreign exchange and more revenue for the government.

Minister Bartlett has spoken of a target of 13.5% growth in arrivals for this calendar year. I have pointed out over the last six months, that I think that we are going to have some difficulty achieving these targets, for a number of reasons.

• 1. The first difficulty is that the USA is going through a recession. From December of last year we have seen the storm clouds looming. We must anticipate that a recession in our largest market will have a negative effect on us.
• 2. This is an election year in the United States, People travel less in election years especially with the excitement of having either the first African American or female candidate. We also know that during an election year the cost of advertising is going to be increased.
• 3. Thirdly, the cost of jet fuel has gone up by 80% in the last year and with it the price of airfares, especially on long distance travel. These factors will have an impact on our tourism.

The Minister has stated that we have had a 13% increase  for the period of January to April (page 7 Budget presentation). Surely this must be an error. We know that the January to March final figure was 13.3% .But we also know that April was virtually flat. It is therefore impossible for the January to April figure to have been 13% as he said. The minister needs to review this and make the necessary corrections.

With the best months behind us, except for August which should show a bump over last year because of the fallout from Hurricane Dean,  it is going to be very difficult to achieve double digit growth for every month through to the end of the year. It is for this reason that I have suggested to the minister that a more realistic figure of 9 to 10% is what we might end up having.

This is not something that we need to be arguing about as they are after all only targets ,but for the record for every 1% of growth that we do not achieve, this equates to a loss of earnings to the country of approximately 17 million US dollars. If we were to achieve 9%, that is 4.5% less than projected we would be looking at fallout of about 75 million US dollars or the equivalent of the total earnings from sugar export in 2005.I repeat Mr. Speaker we want as much growth as is possible, but we have to be careful not to create false expectations.

Tourism Enhancement Fund

Mr. Speaker

I spoke earlier about the Tourism Enhancement Fund but there are a few things I would like to elaborate on. We have noticed that the Spruce Up Jamaica Campaign II, has just been launched. As the Opposition we have no problem with a cleanup programme being funded provided all the necessary and proper procedures are followed. But I would like to remind you this was never the primary purpose of the Fund.  This fund was meant to enhance and build on our historical and cultural assets as well as to transform the landscape of our resort areas in a systematic and planned manner.

For example, it's not just about cleaning and bushing the verges between Negril and Montego Bay. More importantly it is about proper landscaping according to a plan. It is for this reason that we decided to contract the services of professional resort architects who after consultation with the stakeholders would provide us with first world plans to develop our resorts.

 I have already indicated to the Minister verbally that I have concerns about how the process is unfolding.  First, of all the contracts have been signed and work commenced by the architects without the necessary consultation having taken place with all the stakeholders.  Certainly, in the case of Negril, a meeting was recently called on short notice to discuss a first document even before the community and I had been properly briefed as to the planning process.

 It goes back to what I said earlier about governance.  If the tourist industry is to be a success people have to feel a part of the planning, development and implementation of the policy.

Something as important as the preparation of an architectural plan for the development of the resort areas must have the initial input of the stakeholders. They must have a say in shaping their resort in terms of its look and feel. In the spirit of good governance I would like to suggest to the Minister that he ensure that there is a full understanding by the stakeholders of what the process is going to be and that proper consultations take place in all the resort areas.

Further, in the interest of transparency each year he should table in Parliament the work programme of the TEF. That way Parliament, people in the industry and the country at large would know that the TEF is fulfilling its mandate. I raise this issue, because while I am seeing individual projects, I am not sure how they fit into an overall original vision of the TEF.

POLARIZATION OF RESORT BOARDS

Mr. Speaker, I am very concerned about some developments at TPDCo. I spoke earlier of the resorts boards and that we think that they are an important part of governance system of the industry. They allow for a level of inclusion and transparency. Unfortunately, there seems to be a move to marginalize these resort boards.

The first thing that was done was the removal of the chairpersons of the resort boards from the TPDCo board, thereby disconnecting the resort boards from the main decision making body of TPDCo.  Mr. Speaker bear in mind that these chairpersons are democratically elected by the resort boards and are not political appointees. Furthermore they are volunteers and do the work out of a commitment to nation building. What this means in effect is that the governance system has been interrupted and decisions about the resort areas are being taken solely by political appointees, by-passing the democratic structures in place.

Secondly, I understand that when the Spruce Up Campaign was initially announced, individuals were picked in each resort area by the Minister to implement the works. These handpicked individuals determined what was to be done and who was to do it.

Thirdly, there have been reports of attempts to try and take over and politicize some of the resort boards.

Mr. Speaker It is our impression that this is a backward step. We should not be spending government funds, utilizing selected individuals rather than the resort boards that were put in place to ensure transparency and accountability.

 It is also a fact that when the boards are a part of the process they take ownership and protect it, and contribute their own resources towards it thereby minimizing costs and ensuring quality.

Mr. Speaker, there are further rumors that the government intends to disband these resort boards altogether. I hope that this is not so, as it is important that the stakeholders in the resorts have a structure through which they can participate in the planning and development of their areas. I am calling on the Minister to state, what are his intentions towards the resort boards and how he intends to proceed with regard to the implementation of Spruce Up 11.

CASINO GAMBLING

Mr. Speaker, I want to touch on the issue of casino gambling. In his budget presentation the Prime Minister announced that the government would be moving to introduce casino gambling in Jamaica.

With regard to this announcement, there are some issues that we in the opposition would like to have addressed.  When news of the possibility of gambling was first mooted by the minister of tourism some months ago we were told that he had been mandated to consult with the various interest groups. These groups included the Church, who has voiced strong opinions on this matter.

To date, we have heard of no such consultations and for certain there have been no discussions with the Opposition on this matter.

Casino gambling is a very emotive issue and people are usually very much for it or very against it.  Last September (9 months ago) we had a general election and both parties

presented their manifestos. The manifesto of the JLP did not have any reference to casino gambling. This might have been a good thing for them, because the latest Anderson polls show that 51% of Jamaicans are strongly opposed to it and 5% slightly opposed making a total of 56% against. Given the closeness of the last general election it was probably wise for them not to have mentioned it.

 Another important thing is that the government has sought to imply that we had in some of our previous agreements approved casino gambling. Mr. Speaker, for the record the previous government, neither under the Most Honorable P.J. Patterson nor under the Most Honorable Portia Simpson Miller, approved casino gambling in Jamaica. 

This government has indicated that they intend to introduce it.  What we are asking is that they have the strength of their convictions and accept that this has been solely their decision as a government.

Mr. Speaker, we also need to know as quickly as possible what is the regulatory framework and what are the terms and conditions to be applied to the licensees.  It is difficult to understand how predictions can be made as to what sort of expansion can take place at a Harmony Cove and Palmyra, if investors still do not know what they will have to pay for the license and how much of the proceeds they will have to pay out to the government.     

Nonetheless we look forward to further discussion on this matter.

CRAFT MARKET

Mr. Speaker, I want to turn my attention to the craft markets. This is an important part of our tourism product. At my insistence TPDCo was working on a comprehensive programme to deal with the craft industry in Jamaica.

Recently, I met with a number of the presidents of craft markets in western Jamaica and they indicated that they feel a sense of unease about their future. Among the most important issues that they brought to my attention was a lack of business and the, uncertainty about their facilities including the possibility of relocation.

 I would like to suggest to the minister that there is an important need for dialogue. They have been hearing about plans that affect them and do not believe that they have been properly included in the discussions especially with regards to relocating some of the craft markets. There is another major concern in that, most of the shops are full of merchandise representing their life's investment.  Business is slow and we are at the start of the rainy season. They are concerned that, the basic repairs to the roofs of many of the markets have not been done and they could lose a lot to water damage.

On behalf of the craft traders, I am asking the minister to have a dedicated meeting with them to iron out all the problems and to ensure that TPDCo moves as quickly as possible to begin work on the markets.

CRUISE SHIPPING

In closing I want to touch briefly on cruise shipping. In this area we have had phenomenal success in the last few years. We were the first island to sign a guarantee with the cruise lines with regards to the number of passengers that they bring and we had tremendous growth in arrivals moving from approximately 700,000 passengers in 2000 to a high of 1.3 million in 2006.

We also have been able to win ant the World Travel Awards the Caribbean's Leading Cruise Destination award three years in a row 05, 06, 07.

On top of this we were named the World's Leading Cruise Destination two years in a row 06, 07.

An important part of this success has been the consolidation of strong relationships with the individual lines.

In our relationship with Royal Caribbean, it is usual for them to bring in the latest ship in their fleet to Jamaica.

At present, both the Freedom and the Liberty stop in Jamaica. In discussion with Royal we indicated that we wanted the Genesis when it was built to come to Jamaica.

We were told that it could not go to either Montego Bay or

Ocho Rios and hence we began discussions about a joint venture in Falmouth.  The discussions on this project are ongoing and this project can be extremely beneficial for Jamaica if it is implemented correctly, but some questions have to be asked.

• 1. What is it going to cost?
• 2. How much is Royal's contribution?
• 3. At present, Royal guarantees 400,000 visitors to Jamaica. Will Falmouth attract additional visitors or is it a relocation of passengers from Ocho Rios and Montego Bay?

In essence what, we are simple saying, Mr. Speaker is that the numbers must make sense. It must be able to pay for itself.

Also, Mr. Speaker, I understand that the Liberty of the Seas will stop calling on Montego Bay this year and will be moving to Ocho Rios. This is going to leave a big dent in the cruise arrivals to Montego Bay, of up to 70,000 visitors less. We need to aggressively go out and see what replacements can be found in the short to medium term to alleviate this shortfall. And we must determine the reason for its redeployment, address the concerns and build back the business.

To this end, it is important that the Port Authority, the Tourism Ministry, and all the stakeholders on the ground work together to protect and build our cruise industry