World Investment News

Montego Bay, Jamaica - With a view of palm trees and Caribbean waters, European business people in dark suits were running to their meetings while American tourists were sunning poolside in the Ritz-Carleton Golf and Spa Resort in Montego Bay, Jamaica.

The context was quite fitting: it was a conference exploring tourism business opportunities in the Caribbean.

Funded by the European Union, “Profit in the Caribbean” took place in October to promote partnerships between European and Caribbean enterprises in the tourism sector. Almost 200 European companies were attending – architects, landscape artists, beach developers, micro-breweries, all-inclusive resort chains – all of them hoping to meet with Caribbean entrepreneurs and develop profitable business projects in the region.

Meanwhile, 279 Caribbean projects were on the table, such as the construction of eco tourism resorts, the implementation of online reservation systems, the design of a water treatment plant and the establishment of beach-side luxury residences. Some projects were high quality, professional business proposal valued at more than US$800 Million, while others represented small, local investments. Even the Jamaican family-owned “Pork Pit” restaurant was present, offering a franchising proposal for potential investors…

The Caribbean

The conference thus hoped to create a synthesis of relationships and contacts through a “matchmaking” procedure.

The European Union (EU) found that “one of the big problems is that local entrepreneurs do not know where to find partners when they have a good business idea” said Dries de Vaal, Partner of Deloitte Consulting, who is associated with the organisers of the conference, the Emerging Markets Group.

Therefore, the conference was a pro-active push to “play a positive role by attracting EU investors, service provides, consultants, contractors and bankers together with local entrepreneurs in order to facilitate profitable business ventures” added de Vaal.

Although hopes were high among many of the local participants, this is only the first step towards new business.

“It the beginning of a process through which we can bring buyers and sellers together” suggested Patricia Francis, President of JAMPRO, the Jamaican Promotions Corporation. “Essentially, it is the beginning of a relationship-building process.”

Almost 500 Letters of Intent were signed during the 4 days of the conference. The next step will be to determine which projects are eligible for EU funding.

Tourism development strategies

Meanwhile, the Caribbean islands are eager to promote tourism business development as a means to stimulate employment and modernise their economies, especially since most of them are highly dependent on tourism. Each island is evaluating their offer and attempting to upgrade their services and accommodations to stimulate tourism demand.

“In Antigua & Barbuda, tourism is everybody’s business” said Hilson Baptiste, the Minister of State, who is in the process of analysing and re-branding his country’s tourism industry. Given the fact that tourism represents 30% of the country’s GDP (Gross Domestic Product), “the Ministry of Tourism is the engine of growth of the islands”.

In fact, a recent study by the World Travel and Tourism Council, estimates that over 15% of all jobs in the Caribbean are linked to the tourism sector.

Jamaica is going one step further by encouraging the tourism industry sector to set up regional offices on the island which can act as service sector outsourcing operations. “This represents an opportunity for the supply chain industry to manufacture quality goods on an international scale” said Patricia Francis of JAMPRO.

“We are in fact building a business synergy stemming from our tourism sector” she added.

The all-inclusive dilemma

All-inclusive resorts and hotel chains were attending the event in force. Barceló, Iberostar, Club Med, Occidental, Intercontinental, Hilton… each group was looking for new destinations to diversify their resort offering.

“We believe that Jamaica is going to be the new hot spot for European tourism in the near future” said Gustavo Montealegre, Vice-President (Development) of Barceló Hotels & Resorts.

In fact, Spanish hotel chains are scrambling to follow the lead by RIU Hotels & Resorts, which opened their first Jamaican resort two years ago. Iberostar has already bought land in Montego Bay to build a huge 700-room all-inclusive resort, while Barceló is currently hunting for property on the Jamaican coast in order to join the Spanish race to commercialise Jamaica.

“Within the Caribbean we consider Bahamas, Puerto Rico and Jamaica to be the three most important places to invest in, especially since each market is mature enough for our investment to be recovered in a relatively short period of time” said Montealegre.

While the Caribbean is opening up for tourism opportunities, it is also clear that services, restaurants and infrastructure is not up to standard for many European tourists. This has resulted in the construction of isolated all-inclusive resorts that shelter the tourist from the island’s reality.

In Jamaica, the concern for security and the lack of local services keeps tourists in their own all-inclusive resorts, thereby perpetuating a trend that hardly benefits the local community. Yet resentment is growing as the local population feels outcast and rejected by the walled-in resorts arriving to their coasts.

“You cannot come to a country and hate the land you build on” said one local Jamaican restaurant owner.

In a small way, the ProInvest conference was about breaking that trend and encouraging community building projects.

Small entrepreneurs finally had their chance to present their proposals to major corporations and family-run hotels finally had the chance to get the financing needed to expand their bed and breakfasts… it was a step in the right direction, and the chance to dream about tourism as a major player towards the economic development of the Caribbean.