Dennis Jones is a Jamaican-born international economist, who has lived most of the time in the UK and USA, and latterly in Guinea, west Africa. He moved back to the Caribbean in 2007. This blog contains his observations on life on this small eastern Caribbean island, as well as views on life and issues on a broader landscape, especially the Caribbean and Africa.







**You may contact me by e-mail at livinginbarbados[at]gmail[dot]com**

Friday, September 05, 2008

My head hurts: Do we need American Airlines so badly?

I am always suspicious about figures to do with the "benefits" of tourism. One of my big beefs is that the accounting is a bit skewed; we hear about the money coming in but do not look at the tourism-related money that goes out in many forms.

When I read stories such at the recent ones covering the Jamaican government's guarantee to American Airlines to continue flying to the island (see Gleaner report), I scratch my head. I want to watch the pin-head dancing to explain why money cannot be given to Air Jamaica to support it--not that I am in favour of that, just that I want to hear the arguments--but money can be found (US$ 4.5 million), lickety spit, for a foreign airline. I know that a lot of the tourism industry is supported by various forms of subsidies from government to hotels and airlines to keep up visitor numbers, so am always intrigued at what is the true net gain from all those visitors, when one strips away the headlines of "visitor arrivals increase", "tourism major foreign exchange earner", etc., remembering that a lot of the foreign exchange then goes back abroad. So, I sympathize with Paul Pennicock's (Air Jamaica, vice president-marketing) finger pointing at the goverment: he should know what he's dealing with, given that he was formerly the government's director of tourism. So real carefully what the Tourism Minister, Edmund Bartlett, is ready to pay for:

Under the deal, AA will not fly its planes into Jamaica if less than 65 per cent of the seats are taken up. However, if the aircraft is more than 65 per cent full but less than 75 per cent, Jamaica will be required to pay the 10 per cent revenue that the airline would lose. [I presume that Jamaica pays whatever is the actual difference between 65 and 75 percent, which could be only 1 percent.]

Minister Bartlett said, "that was a small price to pay for a deal that will see American making 19 new flights to Jamaica each week with the possibility that approximately 156,000 more visitors could make their way to the island over the 12 months."

He added, "This will earn more than US$96 million for Jamaica with the Tourism Enhancement Fund, which is financing the deal, earning US$1.2 million over the period. Even if you were to pay the US$4.5 million, look at the value of the thing."

That sounds like good leverage of government money, but is it the whole story? From another stance, I know a lot of people, who if given a share of the nearly US$ 5 million in their own pockets, would be happy to find their own way to Jamaica, without American Airlines.

Anyway, a lot more explaining needs to be done. Jamaica has invested a lot into tourism, and with more rooms coming available when major American airlines are raising fares and passenger fees due to much higher fuel costs--though crude oil prices fallen fast in recent weeks from near US$150 to around US$110 a barrel--and threatening to cut schedule flights to the Caribbean, the government may feel the squeeze on its proverbial private parts.

Governments are elected and then decide priorities. Governments are also in place to make decisions for the benefit of the population. These decisions are made from a very difficult set of conflicting demands, and the demands are never ending.

I know a lot of people in Jamaica who don't want to see money bogged down in some bureaucratic process to stop the funding to rebuild Bog Walk Gorge--again (see some comments in The Observer)!Or, better still, find a way to make a route that is more suitable for the heavy traffic that this single available route offers. Do the people only have pipe dreams?

People are also wondering while they wander across the new Hope River Bridge--the old bridge was washed away this week by Tropical Storm Gustav, and its torrent of rain. Tropical storms and hurricanes are also annual visitors that need to be accommodated. Is there hope for those people? They will be very cross if they have to keep crossing by this new Bailey bridge (or is it barely a bridge?).

People in Jamaica are also experiencing a different kind of tube riding than is familiar to some of the visitors from London or those Americans accustomed to tubing down fast flowing rivers on vacation.

These are the crosses that we have to bear. But, don't cross the people too many times.

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