The Estate project would consist of

60 Lots

Local Economic & Market Conditions in the Eastern Caribbean

General Background
The relatively small size of most islands in the Windward and Leeward group prevents strong industrial growth and has left them still significantly dependent on agriculture - sugar, bananas, spices and coconuts, all former staple crops, which are now in decline.

Trade and economic cooperation bodies such as CARl COM and the OECS have not been wholly successful in addressing intrinsic economic difficulties and tourism/tourism-related construction has been virtually the only driver of economic growth for most islands. This trend is accelerating given the regional decline in agriculture as sugar and banana export subsidies end.

The offshore financial services sector, which exists on many islands, is also under pressure from the OECS as measures increase to curb tax evasion, money laundering and terrorist funding.

  • Tourism Performance

    Following post 9/11 declines, 2003 saw an increase in tourist arrivals of 7% far exceeding international growth and 2004 saw growth continue at 7%. The Caribbean Tourism Organization's statistics estimate that tourist stay-over arrivals to the region increased by 3.6% in 2005 and 2.7% percent in 2006.

    The increases in 2005 and 2006 are slightly below the long term annual average of 3.8% per annum over the past 15 years and translate into a gross visitor expenditure of some US$23 Billion.

    It should be noted that 2005 was an extremely challenging year for regional tourism. The after effects of an active hurricane season in 2004, the rising cost of fuel with its impact on airline costs, and resurgence of competing destinations after the Gulf War, 9/11 and SARS have been distinct constraining factors.

    For the 3 year period 2003-2005 combined, tourist arrivals to the Eastern Caribbean grew by just over 19%, compared to a 16% increase for overall world tourism.

    In terms of major source markets, tourist arrivals from the United States grew by an estimated 9% in 2006 and those from Canada by nearly 2%, while tourist arrivals from Europe grew by just under 1%.

    Increased competition in the United States has had a positive impact on both airfares and accessibility. Information on advance bookings from one major carrier for 2007, show a much better picture than during the previous year.
  • Other current key issues include:

    • Economic conditions in the major generating markets are expected to remain favourable with Europe having had its best year of the decade so far in 2006 in terms of its broad based expansion (especially the UK and Germany)
    • The robust growth in international travel is expected to continue and 2007 has started on a higher than expected note. From January through April, international tourist arrivals worldwide rose by over 6% to 252 million, representing an additional 15 million arrivals as against the same period in 2006, according to the latest UNWTO World Tourism Barometer.
    • After considerable upward movement in 2005 with a consequent effect on airline costs, oil prices seemed to be settling but this is subject of course to constant geo-political pressures.

    In light of this, the current Eastern Caribbean performance expectation is for continuing moderate growth in 2007, perhaps in the 2.5% to 3.5% range annually, like that of 2006 at 2.7%. As mentioned more robust growth was expected during the earlier part of the year (mainly due to the Cricket World Cup in March and April) but overall cricket related tourism only off-set reduced traditional season high markets.

    In comparison, the increase in international tourist arrivals is projected to be around 4% (United Nations World Tourism Organisation's World Tourism Barometer, January 2007), much in line with the forecast long-term annual growth rate of 4.1% through 2020. Growth is expected to be more solid as businesses, consumers, governments and international institutions such as the UNWTO are now better able to anticipate shocks and to respond more effectively to crises.
  • Tourism Trends

    Several medium-term trends in Caribbean tourism are worthy of note in terms of their potential effect on the subject project.

    Air transport is a vital key to success for any Eastern Caribbean destination and, generally, trends in the region are positive. Airport facilities are being upgraded, direct scheduled flights from Europe are increasing and larger, modern and more cost-efficient aircraft are coming into service. In 2003 there were signs of a slow down in scheduled services from the USA as American Airlines came under financial pressure, however new carriers, such as Continental, Delta and US Air, are entering the Eastern Caribbean market, and American Airlines, Caribbean Airlines and Air Jamaica continue to offer daily schedules.

    Crewed and bare boat charter yachting is also growing significantly in the region, as is the presence of the latest luxury super yachts. While, in the past, larger boats did not often venture south of Antigua, the attractions of the Grenadines are now better known resulting in an increased number of yacht visits to that region.

    Levels of customer expectation continue to increase and much of the current hotel inventory may not be capable of upgrade to new higher standards.

    In Europe, long-haul destinations are continuing to find favour over the traditional Mediterranean ones and this represents a major summer and winter growth market for the Caribbean, although competition from South East Asia and Dubai is particularly strong. The exchange rates between the U.S. dollar (and pegged local currencies) versus the Euro and Pound Sterling have a significant influence on this market, relative to hotels and real estate based tourism.

    The Caribbean tourism market has been supply-led historically, and this appears to be continuing, although competition from alternative destinations around the world makes it vital that new resort destinations are tightly focused in terms of concept and target market.

    According to the World Travel and Tourism Council, despite increased global competition, wider travel options within major markets and changing consumer patterns, demand in the Caribbean is expected to grow by 3.4% per annum between 2006 and 2015. However, to support this kind of growth, tourism officials across the Caribbean agree that the traditional concept of sun, sea and sand alone will not suffice. The Eastern Caribbean in