Address By The Hon. Dr. Kenny D. Anthony On The Occasion Of The Formal Opening Of The Almond Morgan Bay Resort
ADDRESS BY THE HONOURABLE DR. KENNY D. ANTHONY
ON THE OCCASION OF
THE FORMAL OPENING OF THE ALMOND MORGAN BAY RESORT
SATURDAY, MAY 18, 2006
ASSUMING RESPONSIBILITY FOR THE ECONOMY
“Expectations and Performance of Tourism”
The tourism industry is poised for further increase despite persistent threats imposed by rising oil prices and terrorism. Global trends in tourism are positive, and expectations are that Saint Lucia and the rest of the Caribbean region will continue to harness positive returns from tourism into the foreseeable future.
Ladies and Gentlemen, it is against this background of an optimistic outlook for the tourism industry that we have gathered together to celebrate the official opening of the Almond Morgan Bay Resort.
This is a momentous occasion for the Almond Resorts chain for it marks the expansion of the hotel brand into the CSME arena. I am pleased to welcome the Almond Resorts Chain to Saint Lucia and I derive much pleasure from the fact that Almond Resorts is an authentic Caribbean brand. This demonstrates to the rest of the world the ability of our Caribbean entrepreneurs to achieve world-class standards and compete internationally in the tourism industry.
I am very happy to celebrate the opening of this resort, and the improvement and expansion of this specific property. It is indeed a joyous occasion for the Almond Team, for the people of Saint Lucia, and for the Caribbean region.
Chairman and Chief Executive Officer of the Company, Mr Ralph Wendal Taylor, is to be personally commended for his vision and expertise in the achievements of this company. Ralph Taylor initially established himself in the area of hospitality accounting and financing and took the bold step to become a professional hotelier. He is credited with introducing the all-inclusive resort concept to Barbados and proving its success. Today, Ralph Taylor is demonstrating that Almond is well on its way to becoming a CSME Brand.
I am aware that Mr Taylor’s interests are not limited to his personal business. He is involved in tourism at the national and regional organizational levels. He has served on several national tourism associations in Barbados, and he is a long-standing Director and a former President of the Caribbean Hotel Association.
It is an asset for Saint Lucia’s tourism industry to have someone of the calibre and stature of Ralph Taylor as an operator as we continue to chart the development course for the industry. Ralph Taylor has proved to be a reliable partner of the people of Saint Lucia.
This evening’s celebration marks the culmination of months of hard work and planning, to bring this hotel plant into operation. The timing and completion of the project appears to be perfect; ahead of the dreaded hurricane season and the anticipated Cricket World Cup inflow of visitors. I wish to salute Mr Ralph Taylor and his competent team and I personally congratulate all who have been involved, from planning to completion, for a job well done.
“For every thing there is a season … seedtime and harvest”
I wish to place this occasion in the context of our overall national objectives and to focus our attention on this subject for a while.
As a nation, Saint Lucia has invested a great deal in tourism over the past decade, and in recent months, we have intensified our efforts to grasp the opportunities presented to us by the Cricket World Cup event, which is planned for next year, 2007.
Our goals and aspirations for tourism do not rest solely on the Cricket World Cup, but we are looking beyond, to a vibrant and sustainable industry that can continue to grow and diversify and produce meaningful contributions to our national economic development.
This is what it is all about. The ultimate end to all our efforts and endeavours, is that the tourism industry impels the socio-economic development of our country.
At the policy level, the tourism industry has benefited from reforms in the global arena, which have created a platform for investment facilitation and growth despite increasing international anxiety, turbulence and security threats.
Ironically, it is evident that the same global economic policy changes that have caused the demise of the banana export industry have nourished the tourism industry and caused it to thrive.
Consequently, we have witnessed a trend in tourism’s growth and economic significance over the past decade coinciding with the decline of the agriculture sector. The result is that tourism presently leads the way as the largest contributor to the Gross Domestic Product and to national employment. In 2005, the Tourism Sector surpassed the Agricultural Sector as the main provider of jobs.
The empirical evidence shows that in 1995 tourism had just barely eclipsed agriculture in terms of its contribution to the GDP; Agriculture accounted for 10.58% of GDP and tourism accounted for 10.62%.
Five years later in 2000, agriculture accounted for 6.94% of GDP while tourism’s share had increased to 12.65%
Another five years onwards in 2005, Agriculture’s share of the GDP had further contracted to 3.36 % and tourism accounted for 13.55 %
I must also emphasise that the tourism industry is also leading the way in attracting vital investment capital into the economy.
Over the past decade, the tourism industry expanded significantly, both in terms of the value of Foreign Direct Investment (FDI) and also in visitor arrivals and expenditure. Both government and the private sector have played their roles in investing in the industry.
Government investment in tourism has been significant and in a variety of ways - through selective financial input and guarantee, through marketing and institutional support, human resource development and capacity building, and through the provision of liberal fiscal incentives and trade concessions and infrastructural developments.
In my 2005-2006 Budget Address, I reported that approximately EC$1.8 billion in investment was earmarked for tourism developments (including the upgrading of this property). This level of investment was equated to approximately 142 percent of the country’s annual Gross Domestic Product.
The combined investments of the public and private sectors can be likened to seeds sowed towards future harvests in tourism. Considering the scale of the investments recently made and given the prognosis for growth and general optimistic expectations, one anticipates bountiful harvests in the sector.
“To whom much is given, much is expected”
Amidst such high expectations for the tourism industry, we must acknowledge and be thankful for the Almighty God’s bountiful blessings. We must also do our part as entrepreneurs and policy makers to ensure that the anticipated benefits of tourism are wisely managed.
I therefore propose to use this celebratory occasion to examine the role of tourism in the macroeconomic context and to contemplate our collective responsibilities for the prudent management of the sector in order to achieve our common development goals
As the leading sector in the economy, there are many serious implications for tourism, both in terms of its roles and responsibilities. I have pointed out that this is not technically speaking a new role for the tourism industry, for it is ten years ongoing since the sector has shown such prominence. Admittedly, the first five years (1995 – 2000) were relatively “tumultuous”, as the sector, and by extension the national economy, experienced the difficult processes of adjustment to the new international trade order and its immediate effects on the banana industry.
Our initial response to these economic shocks could be described as “stemming the pain” rather than “consolidating the gains”. Essentially, at that time, we placed emphasis on implementing social recovery programmes to soften the impact of the decline of incomes from agriculture.
In the last five years, the Government of Saint Lucia has placed equal emphasis on economic diversification programmes to build new and sustainable alternative livelihoods (especially in the rural communities). The tourism industry has proven to be a viable focal point for our diversification efforts for many sound reasons. Some of the more critical considerations to justify the tourism focus relate to:
The potential that tourism offers for increasing employment opportunities, and spreading tourism benefits to a broader cross-section of society;
The many opportunities for diversification of the tourism product;
The ability to marry other goals such as preserving national heritage and the environment; and
The ability of the tourism sector to influence growth in other economic sectors through inter-sector linkages.
To sum up the position, Government has expended a great deal of resources in tourism with the intention that the tourism industry will generate significant beneficial economic impacts at all levels.
Considering the fact that for more than a decade tourism has maintained the position as the leading economic sector (in terms of its contribution to the GDP), it is useful for us to take a moment to ponder the following questions:
By considering these basic questions we are, in essence, conducting a rudimentary economic impact assessment of the tourism industry.
“The Unbalanced Growth Theory”
State support is seen as necessary to initiate large-scale investment in a leading sector. It is thought that such support would create the necessary external economies to induce supplying client industries, which would in turn stimulate a secondary wave of investment and entrepreneurship.
There is clearly little to be gained from engaging in lengthy debates about whether Government should support tourism, or whether tourism should be supported more or less than agriculture (or some other productive sector).
While the theoretical analyses continue even now, there is reasonable consensus on the key determinants of growth in the context of a tourism-led economy. The key policy prescriptions that we can effectively implement to charter a positive development course include the following:
Implementation of effective strategies to ensure a continued high level of investment capital flows into the tourism sector
Constantly creating, expanding and strengthening the linkages between the tourism sector and other sectors of the economy and the ancillary services to tourism
Productivity enhancement and capacity building
“Public Private Sector Partnership in the Tourism Led Economy”
In the tourism sector-led economy, the State is increasingly subject to the same kind of efficiency pressures as private entrepreneurs, and its role is to induce rather than to repair disequilibria. There is a common interest among the public and private sector in seeking to maximize the economic returns from their tourism investments. Having sowed much into tourism, the Government and people of Saint Lucia, including the hoteliers, must justifiably expect a harvest.
The private sector must therefore play a pivotal role in pursuing the broader development goals of ensuring continued growth and sustainability of the economy.
This means the businesses in the dominant sector must actively cultivate vital inter-sector linkages with business in other sectors, both vertically (i.e. backward and forward linkages), and laterally, that will help build a more integrated and stable economy. These symbiotic business relations will serve to create secondary economic effects and sustained growth in the long term.
Tourism’s role as the leading sector of the economy should not be limited to the consideration of the statistical significance of its contribution to the GDP. The sector operates within the global services industry whereby the operators are continuously exposed to international standards and modern management/marketing techniques.
In this era of globalisation, the entire economy faces the challenge of adjustments to rapid changes and the struggle to maintain international competitiveness in this dynamic context. As a lead sector, tourism can do much to assist other sectors of the economy in improving efficiency and competitiveness through business linkages and partnerships, including the following approaches:
Creation of joint ventures and investment financing schemes to redistribute investment flows into critical areas, For example, joint projects can be developed in areas where such co-investment arrangements would enhance the attractiveness of other sectors and/or business projects to investment inflows;
Implementation of collaborative human resource development and training programmes with other businesses in other sectors and in ancillary support industries to help in upgrading skills and standards;
Creation of viable trading relationships in all areas of the business in order to foster greater inter-sector linkages especially in with agriculture sector;
Pursuit of joint promotion and advertising with local businesses to create opportunities for them to promote their services within the largest establishments;
Development of activity-based programmes and business oriented initiatives with local communities so that tourist can participate in and enjoy community/local livelihood experiences in a safe and acceptable manner;
Creation of a more authentic Saint Lucian tourism product or visitor experience through active promotion of the following core features of the destination:
The above measures are not exhaustive, but in addition, it is imperative that the economic benefits of tourism be distributed as widely as possibly throughout the country especially in those areas that have been most acutely affected by the demise of bananas.
Through the Heritage Tourism Component of the Private Sector Development Programme, the Government of Saint Lucia had commissioned several studies to determine the potential for business development in non-traditional tourism areas and specific niche areas such as:
with the view of encouraging new, creative enterprises to enter the tourism industry. These new areas of business intervention will potentially diversify the tourism industry and enhance the visitor experience. The private sector must however take the initiative in taking these potentially attractive business ideas to their logical next steps.
THE REAL CHALLENGE
The real challenge is for the lead tourism enterprises to move beyond customary limits of providing social support and charitable donations, to stepping boldly forward and establish mutually beneficial business relationships with enterprises in the other sectors of the economy, and in the ancillary support services areas. The intention is not to displace the local entrepreneur, but, to effectively bring together the local knowledge and authenticity, on the one hand, and the required investment capital and quality standards on the other.
The tourism industry requires quality services and amenities and a vibrant economy in which to thrive, and businesses in general do well in an environment where there are healthy input- output relationships among them. This is a mutual objective of the private sector and all businesses must work together to achieve it. As international market barriers are broken down, we cannot afford to maintain internal obstacles to business within the national economy. Indeed, we must do all within our power to fully exploit all the opportunities that emanate from our internal markets.
As the lead economic sector, it is now the responsibility of the tourism sector to demonstrate leadership in this area and to begin to develop creative mechanisms to deepen and strengthen the inter-sector linkages within the economy.
I thank you.
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