SINT MAARTEN (COMMENTARY - by Cdr. Bud Slabbaert) - The USA and Canada are the major tourism source markets for most if not all the Caribbean destinations. A trade war that most likely results in rising consumer prices may impact on the tourism industry. Vacationing is not something that one needs but rather something that one wishes and wants. Rising costs of living and increasing inflation results in having less funding for what one wants or wishes for and therefore in order to afford what is needed, the cost of living. Slowing economies in major tourism source markets are not favorable for the vacation kinds.
How much it will impact the tourism industry will first depend on how long the trade conflict will last. But once turmoil is created in an economy, it may take ample time to balance things out again. It will not happen overnight. There may be a variety of side effects in those major source markets. From prices in the grocery store to the fuel costs at the pump. Inflation often results in increased interest rates being imposed by a national bank, thus lending rates and credit card debts will be affected. A poor economy may kill jobs. The costs of imported products from the countries directly involved in the trade will increase.
It all sounds catastrophically and disastrous, but it has the potential for it. Even a fraction of the calamity is not something desirable for the tourism industry, especially if a county’s revenues depend highly on that type of commerce. The prospective dangers of it, no matter in what dimension, should be all the more reason to explore economic diversification and become less dependent on tourism. Fifty-fifty can be acceptable, all else should be considered a risky no-no. Diversification means that an economy should become more producing and less consuming and subsequently change a trade deficit. A risk adverse attitude is a needed direction.
Diversification could also happen within the tourism segment. For instance, the high-end individual’s segment will be less affected although stock markets may be shaking, rocking, and rolling. Yet, sometimes the trading marketplaces offer profit making opportunities for some when there are these changing ups and downs. However, this clientele typically has the reserves to keep up its lifestyle anyway. Destinations wanting to change their clientele should realize that it is a total specialization, and a mix of mass and quality will not work.
It may need bright spirits to propose a realistic sustainable and beneficial diversification. It may require a think-tank of qualified impartial individuals. Brainstorming by the brainless doesn’t work well. No matter what a current or future situation is, intelligent positive thinking is always desired.
Eeny meeny miny moe. What is behind this variability spreads from different parts to every playground. Substitute it to one’s own words as the mood is taking them, but be alert, realistic and consider the potential both from the negative and positive perspective. A panoramic view and a track record of true wisdom will determine survival and flourishing.
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