The changing fortunes of the Tobago tourism industry

CHRIS JAMES

In 2001, Tobago faced a revenue challenge. International tourist arrivals to the island, which had steadily increased year on year from 1994 until 2000, dropped by 4,226 to 49,441. Tobago was serviced by four international flights at the time – Caribbean Airlines, British Airways, Caledonian Airways, and Condor. Alarmed by this sudden decline, the government of the day, led by prime minister Patrick Manning, formed a standing committee on tourism in 2001 with a mandate to increase arrival figures and secure airlift. The standing committee developed and implemented a three year rolling plan by July 2002. The main objectives of the rolling plan were to

1. increase airlift;

2. formulate and execute an effective marketing strategy; and

3. ensure continuity.

By the peak (winter) season of 2002 the tourism committee had reversed the decline in arrivals and secured the services of two additional airlines – Virgin Atlantic out of London, and Lauda Air out of Vienna. Arrivals to Tobago increased by 7,120 to 56,561 in 2003 and continued increasing year on year, peaking at 87,796 in 2005. This remarkable reversal of fortune was achieved through the implementation of three main strategies:

Airlift

Continuous dedicated engagement of airlines by an airlift subcommittee led by the late Neil Wilson. This subcommittee was comprised of members from the Tobago Chamber of Commerce, Tobago Hotel and Tourism Association (THTA), Ministry of Tourism officials, Tobago House of Assembly (THA) officers, and the Tourism and Industrial Development Company of TT (Tidco). In three years, the airlift subcommittee was able to secure seven additional flights from five destinations – London, Vienna, Amsterdam, San Juan (Puerto Rico), and New York.

Effective marketing strategy

A combination of initiatives executed by Tidco; overseas representatives in England, continental Europe (including Scandinavia), and North America; and contracted foreign tour operators.

Continuous assessment

The effectiveness of marketing initiatives was evaluated on a monthly basis and adjusted accordingly. To ensure the committee had sufficient resources to execute their plans they were provided with a zero-sum budget, with an initial investment of $305 million for the three year period. As money was spent, the government replaced it to ensure continuity of operations.

During the years 2003 to 2007, Tobago averaged between 65 per cent to 75 per cent occupancy year round. The private sector employed two thirds of the working population and Tobago was a significant foreign exchange earner for the country. The tourism sector spawned a multitude of allied industries that comfortably benefited from local and foreign patronage.

So what happened? In 2006 arrivals dropped dramatically by over 19,000 from 2005. This steep decline continued for the next six years, stabilising somewhat at 27,641 in 2012. Since then Tobago arrivals have steadily decreased year on year, down to less than 20,000 in 2019.

There are several contributing factors to this dismal state of affairs. Grenada reopened in 2006 after two years of almost no tourist arrivals due to the devastation caused by Hurricane Ivan in 2004. Grenada proved to be stiff competition for Tobago and airlift out of London, Tobago’s biggest market, was directly affected.

In 2007, the then THA secretary of finance Dr Anslem London stated that Tobago was too dependent on tourism. The THA and the Ministry of Tourism decreased funding to tourism and invested in projects such as the Cove Industrial Estate. With less funding, marketing initiatives were severely curtailed. By this time the standing committee on tourism was convened less frequently and was disbanded altogether in 2012 when it came under the purview of then secretary for tourism, culture and transportation Tracy Davidson-Celestine.

It is worth noting that from 2007 to present, Tobago’s private sector employment has shrunk while the THA now employs 62 per cent of the working population. Instead of increasing private sector revenue, Tobago has increased its dependency on the treasury.

It was also in 2007 that the controversial Land Licence Order of February 2007 was introduced. This order prohibits foreign investors from investing in Tobago without a licence. Because of the difficulty in obtaining the licence, this had the immediate impact of stopping a dozen direct foreign investment projects and deterring future investors. The negative publicity and anti-foreign rhetoric associated with the order turned many visitors away from Tobago, particularly Scandinavian and German tourists.

Swedish charter operator Apollo Airlines introduced a direct winter flight from Stockholm to Tobago in November 2013. Unfortunately this only lasted two seasons. Between 2006 and 2019 Tobago lost eight international flights without replacement, including a short-lived GOL Airlines flight between Sao Paolo (Brazil) and Tobago. Tobago was also dropped by the regional carrier Liat. By this time Tobago’s average annual hotel occupancy had declined to 35 per cent.

In 2017 the sea bridge between TT effectively collapsed for 18 months, leaving the twin island state without cargo or passenger ferries for several weeks at a time. Without an influx of local tourists and goods from Trinidad, Tobago suffered. Even when the service improved in 2019, confidence in inter-island transport had been dented so much that local tourists stayed away, only returning in significant numbers in April 2019.

2017 was also the year that the Tourism Development Company, which replaced Tidco in 2005, was disbanded with the intention to establish two separate marketing entities for TT. All foreign representation for Tobago was dropped, with the exception of a small presence in the United Kingdom. Not surprisingly, Tobago was quickly forgotten as a destination while other places saw record increases in arrivals.

The establishment of the Tobago Tourism Agency Ltd (TTAL) in 2018 has provided some strategic direction but is yet to yield meaningful results. TTAL was able to secure the services of Canadian low-cost carrier Sunwing Airline for the four-month winter seasons of 2018 and 2019, but it is unknown if Sunwing will return to Tobago this year. TTAL was also responsible for introducing the Thomas Cook flight out of Manchester, which folded after two seasons.

TT has experienced a steady and disturbing increase of violent crime over the past 20 years. This has been widely reported in the international media and significantly deters regional and international visitors.

Fast-forward to 2020 and the coronavirus pandemic. Covid19 effectively decimated what was left of Tobago tourism and destroyed the private sector. With a 40 per cent overall reduction in revenue from 2019, the second lowest hotel rates in the Caricom region, a projected less than 7,000 total arrivals for 2020, and island accommodation levels down to near zero, Tobago appears to be in terminal decline. It is unclear what international carriers, if any, will continue flying to Tobago.

How can Tobago be saved? It is to be hoped that the upcoming 2020/21 budget presentation will feature a comprehensive and practical recovery plan for this vital industry. Given TT’s foreign exchange shortage, it is in the country’s best interest for Tobago to once again be a significant earner of foreign currency.

Chris James is the president of the Tobago Hotel and Tourism Association.