Tourism overall is picking up throughout the Caribbean and as the region enjoys healthy growth it must deal with a number of external pressures that are both similar and different from other destinations.
Editor’s Note: Skift is publishing a series of interviews with CEOs of destination marketing organizations where we discuss the future of their organizations and the evolving strategies for attracting visitors. Read all the interviews as they come out here.
This continues our series of CEO interviews that began with online travel CEOs in Future of Travel Booking (now an e-book), and continued with hotel CEOs in the Future of the Guest Experience series (which is also an e-book).
When thinking about the Caribbean it’s often the larger islands of the Barbados, Jamaica and Puerto Rico that come to mind. This is one of the challenges of the Caribbean Tourism Organization (CTO) where the mission is to market the region as one destination and make sure the household name destinations don’t claim the largest slices of its marketing budget. While it’s not clear to what extent this happens the region as a whole had a record year for tourist arrivals in 2014 and so far this year has seen more records.
The Caribbean welcomed 26.3 million visitors in 2014 which was a 5.6% increase over the previous year. For the first quarter of 2015, the CTO announced it’s seeing a 6% increase over the first quarter of 2014.
Skift recently sat down with Hugh Riley, the CEO of the Caribbean Tourism Organization, to talk about visitor arrivals, air capacity growth to the region and the impact of Cuba thawing relations with the U.S.
An edited version of the interview follows:
Skift: What’s the status with the “One Caribbean” messaging that your organization employs when marketing the Caribbean? Are you seeing success from that rather than calling out individual islands? Also, how do you ensure islands like Jamaica, Barbados, and the Bahamas don’t hog all of the marketing budget and that money trickles down to smaller islands?
Hugh Riley: I think this is an important goal and in pretty much every ad opportunity we have we talk about “one sea, one voice, one Caribbean.” The real meaning of this very important tenant is that the Caribbean brand is stronger than any individual country brand in the region. To the extent that people first wrap their minds around a vacation in “the Caribbean,” we believe this is the starting point.
We would much rather have them decide on the Caribbean this year than on some other region of the world. We think that once we can attract people’s attention and lure them into our region of course the next decision is what destination within the Caribbean and what hotel, what activity and so on.
What this does not do is to remove the necessity for individual countries of the Caribbean to promote themselves. The fact is that each destination within the Caribbean has its own uniqueness and culture, color and history. We represent French, Spanish, Dutch, and English countries in the Caribbean. Big islands and small islands and some countries that aren’t islands at all so there is that diversity of which we are very proud.
Naturally there will always be more people going to the Bahamas than some of the smaller islands, that’s just the natural order of things, but I think it’s the diversity that really helps the small islands and the big islands. That people know they can have a different kind of experience depending on what size island and type of destination they’re looking for within a very small distance.
Skift: What are some challenges moving forward with that?
Riley: We’re getting closer all the time and I believe the goal will never be truly realized until we see every member of the CTO be in a position where they can functionally and effectively contribute to a budget that is large enough and sustainable enough to constantly promote the Caribbean as the destination of choice in the world. We know that this has to happen if we are to see our full potential.
We know that our individual member countries within CTO simply do not have the resources to make that kind of impact so if as a region we were spending $100 million unfortunately each of us is spending 2 or 4 or $6 million but not getting the real value, the real clout of a $100 million destination or a $100 million advertiser.
Pooling our resources is really the only effective answer to getting the resources we need for the region and for the destinations. What I have to constantly remind people of is that this does not retract from the uniqueness of the individual countries and we have to remind people, particularly those who don’t know the Caribbean well, is that if you’ve seen one island, you’ve seen one island. That’s all you’ve seen because we are so different.
Skift: Air passenger arrivals to the Caribbean are typically worth more and spend more than their cruise counterparts. Cruise passengers sometimes don’t spend anything beyond the port or nothing when they’re off the ship. What’s your view on this and how are you working to make sure everyone spends more in the destinations?
Riley: Each type of passenger has its own value and there’s no question about that. Statistically a stay-over visitor naturally spends a great deal more than a cruise passenger and in some destinations it is ten times as much. That does not mean a stay-over visitor is ten times more valuable because there are other criteria to define value. Let’s accept that cruising is incredibly important to the vacation experience and that cruising is here to stay.
Let’s also accept that because of cruising millions of people see the Caribbean who would not normally do so. Thirdly, there are people who have seen the Caribbean on a cruise ship and come back as a stay-over visitor and I imagine the reverse would also happen. But I suspect the first one happens more as a way for people to sample the Caribbean and then they can make decisions like whether they’re going to be cruise passengers forever or whether they’ll be stay-over visitors at one or two countries the most or whether they want to combine both cruising and flying, both desirable experiences. The Caribbean is still the number one choice for cruise passengers and we still have the biggest segment of cruise passengers on the planet.
Skift: During the past five years which has changed more: your relationship with cruise lines or airlines?
Riley: Well it’s not a contest of course but I think those relationships are continuing pretty much neck and neck. Both cruises and airlines have places on the board of directors of the CTO and cruise lines sit next to airlines who sit next to hotels at business meetings for the board of directors and executive committee. In my opinion it’s hard to say which of those sectors has moved ahead of the others in terms of innovation because I think all of them have made great tech innovations that are keeping Caribbean tourism vibrant.
Skift: During the past year there’s been some air capacity growth to the Caribbean such as Southwest and JetBlue’s new routes to and from the U.S. Which islands would you like to see further expansion of seat capacity to?
Riley: We’d like to see an expansion of capacity to the Caribbean as a whole. Our individual member countries use whatever means they feel are necessarily based on their national objectives. There are some countries for which the U.S. is the number one source of tourism arrivals so they’ll certainly spend more time talking to U.S. carriers and there are also some countries for which Europe is their bread basket.
Many of our member countries are now looking more at non-traditional markets, so airlift out of South America is a big focus now and so on. But our role as a catalyst is if our member countries say “we would like you do some research on some non-traditional market and let’s see what the air seat capacity would be like, and there are two or three of us who would like to work together and share a 737,” we are the catalyst for making those kinds of things happen. But these countries make their own national policies.
Skift: North American arrivals were slow in 2013 but rebounded last year. But what about visitor growth to Caribbean from the BRIC countries?
Riley: The Americas, specifically the United States, and Canada have been increasing but the U.S. is still the number one source of visitors to the Caribbean. Looking at Brazil, Russia, India, and China there has been some difference from our member countries in terms of where they want to put the emphasis there. Some of our countries have set up consular services in China and Russia and have been very successful with attracting more tourists from those countries
Brazil is a major source market for the Caribbean and share’s a lot of familial and historical connections. And Brazil is contra-seasonal, meaning when it’s cold there it’s usually warm in the U.S. so Brazil helps balance out our visitor arrivals year-round. And with India the region shares many obvious similarities such as cricket. At least half of our member countries love cricket and Indians are extremely passionate about cricket and it’s not a big secret that tourism follows passion or passion follows tourism.
Skift: Let’s talk about the elephant in the room: Cuba. Tourism to that country definitely isn’t new but is it ready to handle the inevitable influx of American tourists? What’s been the conversation in the Caribbean about Cuba?
Riley: It’s extremely exciting to think that on the horizon that there is an opportunity to attract new visitors into the Caribbean. As you said Cuba is not new to the tourism business and in fact receives the second largest number of visitors (more than 3 million a year) only behind the Dominican Republic.
Cuba is well established in the tourism business and it has the goods to be powerful, effective and attractive magnet for tourism. The fact that all of those assets can be used at some point in the near and not so distant future to attract more Americans into the Caribbean is an exciting prospect for Cuba and the region. Cuba is a member of the CTO so it’s just as important for us to understand what Cuba’s objectives are than what other members’ objectives are.
Skift: What are people getting wrong about Cuba and what is it like working with them as the CTO and a non-American actor?
Riley: We’ve grown up going to school in Cuba, training there and getting degrees there. As a non-American actor doing business with Cuba it really isn’t that different than doing business with anyone else. I think the question might get a different answer if it were addressed to an American citizen who has never been to Cuba. But I wish I had some complex, intriguing answer for you but it’s really no different for us as Caribbean citizens.
Skift: And you definitely have a lot more to focus on besides Cuba outside the region. How are you tackling rising beach destination competition from places like Abu Dhabi and Dubai? Do you see them as competition and who do you think will retain the most market share in the long-run?
Riley: We expect more countries to get into the tourism business and some countries are relatively new to the business. But we have been in it for a long time and we have to keep on by freshening our product and listening to the responses of our customers. We have to make sure that we’re not just satisfying but exceeding their expectations and we want to make sure that they not only come back but that they also recommend the Caribbean to others.
We are constantly aware of what the competition is doing but building a man-made beach somewhere and sticking up plastic palms really doesn’t compare to the authenticity of the Caribbean. Somebody’s always going to have a bigger Olympic size pool or a taller waterfall and we expect that. But no one should have a more special experience than they would get in the Caribbean because we are the most tourism dependent region in the world.
Skift: Lastly, conventions growth in the region seems to be positive and islands like Puerto Rico have done a particularly good job at branding themselves as a meetings and conventions hub during the past year. What role has your organization played in this?
Riley: What we call the “MICE” market [meetings, incentives, conventions and exhibitions] is of interest to a number of our member countries. Puerto Rico is doing extremely well with larger conventions in terms of Caribbean standards and Trinidad and Tobago have also had some success. The question is whether it’s a big meeting or a small meeting as a big meeting in some of our countries means a 1,000 people and for others “big” means 250 people. The Caribbean is seen as a reward and as a winner and it’s still an exciting feather in people’s caps to say they’re going to the Caribbean.
One thing the Caribbean does a very good job of is creativity. Even if your prospects in meetings and incentives have been to the Caribbean before, the idea behind the incentive trip is to make it different than what the individual himself could ever achieve and we love that kind of challenge.
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Photo credit: Hugh Riley is the CEO of the Caribbean Tourism Organization. Caribbean Tourism Organization