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The value of emerging markets was discussed at a recent CTO SOTIC event held in Barbados. The Caribbean region harbors a wealth of opportunities for economic development. Being beautiful is both a blessing and a curse. Possessing some of the best beaches in the world, surrounded by the incredible Caribbean Sea, endless days of brilliant sunshine, and yet everything is not perfect in this region of sand, surf, and sun. While the individual nations rely heavily on the tourist for a positive and consistent revenue stream, the industry is very fickle and competition increases daily.
In addition, the industry is subject to the whims of consumers who are easily bored, heavily marketed for their discretionary income decisions, easily deceived by what is instantly “hot,” and a moving target that is difficult (if not impossible) to corral.
Assets and Liabilities
Demographically the region is dynamic with a youthful population developing into a workforce where more than half the people are under 30 years of age; however, stagnant economies and misguided development programs combined with an education system that has lost touch with reality places the region in a less than competitive position. Unemployed Caribbean youth (as a group) are among the highest in the world and influence the increase in crimes and poverty. Without leadership to steer the region toward economic recovery, the best and the brightest are leaving and immigrating to other parts of the world where education, jobs and career opportunities are available.
Naturalization for Money
Some leaders are looking at Foreign Direct Investment (FDI) as the answer to their economic challenges and engaging in a Citizen by Investment scheme. Through this process, high net worth individuals are provided an incentive to invest in the country by lure of citizenship. There are potential problems with the program and interested investors should be wary of the investment and time requirements.
Country Investment Schemes include (but are not limited to):
1. Antigua. Considered the most popular project in the Caribbean. A $200,000 non-refundable donation of $400,000 investment in real estate and a 3-month wait for the process to be completed gives the individual a passport that provides access to Canada, the UK, EU member states and 120+ countries. There is no requirement for participants to visit Antigua.
2. St. Kitts and Nevis. A $250,000 donation and 8 months of your time will enter you into this program.
3. St. Lucia. Requires a minimum investment of $200,000 plus net assets in excess of $3.5 million.
4. Dominica. Invest $100,000 and then wait10-12 months. This nation requires a personal visit to the Island.
5. Grenada. A $200,000 non-refundable investment or $350,000 placed in a real estate investment project plus a wait of 2-3 months provides citizenship in Grenada. The passport permits visits to 121 countries without a visa (does not include Canada and the US).
Other countries in the region with similar offers include: Barbados, Belize, Guyana, Haiti, Jamaica, Suriname, The Bahamas and Trinidad and Tobago.
Citizenship by Investment is very popular for Chinese and Russian citizens; however, China does not recognize dual citizenship and Chinese nationality is lost when a foreign nationality is obtained. Russia introduced a law making it compulsory for any Russian citizen to disclose dual citizenship. These laws may impact on the long term success of these Caribbean programs.
Looking Elsewhere
It is easy to understand that the Caribbean countries need new revenue streams; however, economic citizenship without significant residence requirements or the most detailed and exhaustive background checks, may give these programs the appearance of facilitating money laundering, criminality or even terrorism. If this happens, the programs become self-defeating and dangerous, locally and internationally.
Some nations in the Caribbean are looking at ways to improve their economies by focusing on increasing tourism visits by sourcing markets that have been under-served, specifically the Jewish/Kosher, Latino, and African-Americans tourists. Cruise ship passengers spend only a few hours on an island and leave. While they contribute to the economy (i.e., use a local tour operator, taxi; eat at local restaurants; shop), only a few sectors of the economy benefit from these visitors. The real objective is to increase the overnight visitors who seek accommodations in hotels, villas, and smaller bed/breakfast properties.
Jewish/Kosher Traveler
There is a need to encourage stayover visitors and emerging target markets may be the source for this new initiative. At the CTO SOTIC conference, Eric Bowman, a UK born Canadian attorney who, since 2005, has spent 6 months of every year in Barbados, shared his expertise on the potential for the Jewish/Kosher visitor.
With over 6 million Jews living in North America, and a large percentage traveling to the Caribbean to escape cold winters, the usual attractions of sand, sea and sun are not as seductive as they have been. New incentives need to be put in place to encourage previous visitors to return, and for new Jewish travelers to explore this part of the planet. There is an increase in the number of North American Jewish tourists visiting the Caribbean; some for Jewish history and the opportunity to meet with the local Jewish community while others see the visit as part of “life-cycle” events (weddings and bnai mitvah). The Caribbean has also become a popular destination for kosher holiday tours, particularly for Passover.
Jewish Pirates of the Caribbean
Bowman suggests the Caribbean marketing plan highlight the Jewish connection with the Caribbean. The first Jew arrived with Christopher Columbus (1492) on the Santa Maria. Since that date there has been a Jewish presence in the region.
Bowman explained that David de Mercado brought the technology of the windmill to grind sugar cane to Barbados enabling the nation to become the wealthiest colony of Britain (at the time sugar was worth more than gold). In addition, old synagogues exist in Suriname (formerly Dutch Guiana), Curacao (Dutch West Indies) and Jamaica.
In Barbados, the Jewish complex has been renovated and restored under the guidance and leadership of Sir Paul Altman and currently used for religious services. The Jewish Museum opened in 2008 and the Mikvah (Ritual Bath) was discovered under a parking lot in 2008 (built in 1654). The Jewish cemetery has historical gravestones, including the remains of David de Mercado and Haim Barrow, the grandfather of the first prime minister of Barbados, Errol Barrow.
In St. Eustatius there are ruins of Jewish warehouses, where goldsmiths and silversmiths fashioned jewelry from the booty brought there by pirates and privateers.
Bowman suggested that Orthodox Jews offer an additional market. There are about 500,000 Jewish people in this category in North America, with smaller numbers in the UK and Europe. Bowman stated that Judaism requires the practice of hundreds of rituals, with two that impact on travel and tourism: observance of the Sabbath and Festivals and Kashrut (the dietary rules). To observe the Sabbath, Jews cannot work (creating anything or make something). For hotels and villas this means being “Sabbath Friendly,” by reserving the lower floors for Orthodox guests so that an elevator does not have to be used and real keys (not electronic) are available for entrance. In addition, lighting/air conditioning must be on electric timers and attractions are within walking distance for Sabbath and Festival services. The most expensive and complex requirement is meeting the dietary laws of this target market who require Kosher (or Kashrut) cuisine. Currently, observant Jews bring their kosher food with them, together with cooking utensils, cutlery and dishes.
Presently, local markets in Barbados carry products that are available including fruit, vegetables, milk, dairy products and packaged foods that carry the kosher label; fish can be bought directly from the fishermen at Oistins fish market and kosher meat can be brought in from North America with a license from the government of Barbados.
Assistance and guidance for Jewish living in the Caribbean can be obtained from the Lubavitch-Chabad organization. The prime objective of the group is to encourage Jewish observance in the local Jewish population. There is Chabad House in Ocho Rios, Jamaica, as well as Phillipsburg, Sint Maarten. They offer sources for kosher food, religious services and their facilities are within walking distance to many hotels.
African American Market
Brian Major, the Editor for the Caribbean and South America for Travalliance shared his expertise and knowledge of the African American leisure traveler at the CTO conference. African Americans spend $48 billion annually on travel in the USA with 13 percent taking one or more international trips annually. This group is spending $886 per trip compared with total leisure travelers who spend $909 per trip. Fifty-four percent of African American households have incomes from $35K to $99.9K and 10 percent have incomes in excess of $100K.
Research suggests that this is a stable and resilient market segment. African Americans are three times more likely to travel in groups with 95 percent looking for relaxation and a way to release stress, and 91 percent wanting to create lasting memories. Travel is a way to enrich relationships with spouse/partners and children (81 percent), and they want to be pampered (81 percent).
According to Mandala Research, this target market participates more than the general leisure traveler in live performances and events, enjoys spa services and is interested in personal enrichment. Over fifty-percent of the travelers studied want to visit different locations for every vacation and almost half prefer 2-3 short vacations rather than one extended holiday. Planned/organized holidays are preferred (one-third of people surveyed) and they want vacations that differentiate them from friends and families.
Muslim Market Segment
Nabeel Shariff, Founder and Director Serendipity Tailormade and Luxury Halal Travel addressed the opportunities to target the Muslim tourist at the CTO conference. “On one end of the scale you have the uber liberal Muslim and on the other, the very conservative.” If the Halal travel market was a country, it would be the third largest source market in the world. Many young Muslim travelers are young, ambitious, affluent and professional and they are creating waves in industries from fashion, food, cosmetics and finance.
Shelina Janmohamed, the vice president of Ogilvy Noor a division of Olgilvy&Mather in London, has called the young Muslim traveler – Miptsterz (Muslim Hipsters), Gummies (Growing Urban Muslims) and Haloodies (Halal Foodies). It is the youth that are driving the next 30 years of travel and the Caribbean has not taken full advantage of this growing sector.
Hispanic Market Segment
Luba Tolkachyov, the co-Founder of Gravity shared her expertise in the emerging Hispanic market. Tolkachyov found that nearly 1 in 6 Americans are Hispanic and while they speak Spanish at home, they are bilingual. This group is likely to spend $3000 – $5000 on a vacation. While international travel is appealing, the Caribbean may not be their first choice except for people from Puerto Rico, the Dominican Republic and Cuban-Americans. Only 10 percent of all Hispanic American adults (3.2 million) have travelled to the Caribbean in the past 3 years and only 3 percent of Mexican Americans (666,000) have travelled to this region in this time frame. When traveling, this market engages in activities that include outdoor activities (i.e., boating and water sports) and cruising.
Market Disrupters
After the “emerging” tourist selects a destination, the next step is reserving accommodations. If the choice is not to stay with friends and families, the default option is frequently a hotel; however, it appears many hoteliers are not willing or able to meet the changing demands of the traveler allowing the “market disrupters” to find a warm welcome in these target markets. From Airbnb to luxury villas, the savvy traveler who values his/her time and money is selecting “other” when making accommodation reservation.
In Barbados, as well as other Caribbean destinations, the villa rental is becoming the best choice and permits a seamless holiday. I recently met with a Barbara Da Silva, a Reservation Specialist with BlueSkyLuxury.com who explained the guidelines for working with a local agency to reserve a villa.
The first step is to email or call a local real estate firm that specializes in villa rentals and has a long history of working in the country. Tell them the dates, number and age(s) of people who will be using the villa, and the special needs of the guests (i.e., dietary requirements, physical limitations, on premise gym), location preferences (i.e., on the beach, at the top of a hill or mountain), the necessity of having beach access (for swimming or boating, or children play areas) and the size of the pool (i.e., a splash or lap pool). Do you want electricity and a/c in all rooms (including dining areas) or will candle light at dinner be sufficient?
From this initial conversation, the next step is to determine budget, staff requirements (i.e., housekeeper, chef, sommelier, laundress, car/driver, nanny, exercise trainer) and if medical issues require on-going nursing or other health-care providers. The Reservation Specialist will then send links to properties that meet the guest profile. If you require Kosher or Halal cuisine, special wines or spirits, scuba equipment or personal security personnel, an organization like BlueSky will handle all the details and make all the arrangements.
While I was assured that the photographs are not altered (or air brushed), I strongly recommend that a visit to the destination for a personal eyeball site-inspection be made before making a final decision. Villa rentals can easily cost thousands of dollars a day – and once the group/family is unpacking for their winter holiday in the sun – it is too late to be upset. The investment of time and energy will be rewarded by having a seamless and fabulous holiday.
The good news is that your villa-concierge is on-call during your entire holiday. If you need restaurant recommendations, introductions to local artists and sculptors, referrals for doctors and dentists, the concierge is your go-to person – so that your holiday does not have any bumps or crises.
There are many new reasons to visit the Caribbean and luxury villas can provide accommodations that will meet the multiple needs/wants of the emerging target markets.
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Sourse: eturbonews.com
