Turks and Caicos: Interview with Mr. John T. Smith

Mr. John T. Smith

CEO TCI Airports Authority (TCI Airports Authority)

Mr. John T. Smith

Being a British Overseas Territory with an independent Government, Turks and Caicos Islands have a unique position in the Caribbean with a GDP per capita of almost 24.000 USD, among the highest in the Caribbean. But there are many countries in the region that compete in similar sectors, such as tourism or financial service. What are the advantages that set the Turks and Caicos Islands apart from the rest of the Caribbean countries?

First and foremost is the geographical location from an airlift point of view, its connections with North America. There is also the natural beauty; all its islands with different flavors and beautiful beaches, including Grace Bay in Providenciales, rated the world’s number one  for several years. The hospitality of the people; they are embracing, jovial and friendly.

The high standards of living as well  contributes, with focus mainly on high end tourism. Turks and Caicos is one of the few places in the Caribbean with such a  wide choice of luxury restaurants and accommodation.

Turks and Caicos was strongly hit eight years ago by the global financial crisis that had a serious impact on the economy. However, according to the International Monetary Fund, since 2012 the country’s economy maintains a steady growth. Which are the reasons behind this economic performance?

We were hit by the almost perfect storm; a combination of political issues, economic recession and Hurricane Ike within that time frame. The lower-end was more impacted by the crisis, but the fact that we are a high-end destination facilitated a disposable income from those who were in a better financial position. As a result, we really were able to ride the wave better than our neighbors.

Due to the geography of the Caribbean, the aviation industry obviously plays a fundamental role for the islands. What is the situation of the aviation sector in the region?

Geographically, our location gives us somewhat of an advantage over our neighbors. Our close proximity to the United States is advantageous and many of the aircrafts that fly from the United States to the rest of the Caribbean and other places actually do it within the vicinity of the Turks and Caicos, which makes somewhat easier for us to attract airlift.

In order to attract airlines, we are strategically focusing on gateways. We are a relatively small economy, but the significance of being insignificant is what helps us a great deal. We are unable to have any impact on the world economy; thanks to that we only need very little to maintain a reasonably good lifestyle and a healthy GDP.

Our strategy is the differentiation of our market and the way we work collaboratively with the three pillars in tourism; the airport authority, the tourist board and the hotel association. We approach airlines in common. Resultantly we are able to attract airlines with each partner bringing something forward. We have a “New Routes, New Incentives Policy”  which means we lower the operating cost or share in the risk of a startup, whether it is a new airline or a new route, and the hotel association and the tourist board assist in lowering the initial capital costs. When you bring both the airline dimension and the hotels market together, you have widened the scope of marketing and it makes it more sustainable to attract carrier.

TCI depends 100% on imports, mainly from the US. After the new administration, led by the Premier Cartwright-Robinson, took office in December 2016. Which are the main challenges in the airports system that the new government has to deal with?

The main challenges at the moment would be continuing to grow at current rate. The airports do not have an immediate return on the investment, but the ultimate economic return is crucial to our economic and social development. As an example, the cost of the runway project with the tower and the terminal building under development in South Caicos is approximately 35 million USD. An immediate financial return is unlikely, but the economical return is critical because we have now a newer market that helps with the diversification of the tourism product. South Caicos now has a few resorts that are up and running and an airport is required to support them and by extension the local economy. The airport’s system investments are evaluated from a view point of the impact it has on the entire economy of the Turks and Caicos.

“Beautiful by Nature” is the slogan of the country, and for hundreds of thousands of travelers, Providenciales airport is the first impression of TCI, a crucial perception for a country based on tourism. What is the experience that your airports aims to provide to the visitors?

We provide a welcoming and unique experience on arrival. While may other airports are using  air bridges we do not yet embrace them. However, is helps to differentiates us for other destinations arrival experiences.  when you arrive as a tourist looking for sun, sea and sand, you step off the aircraft to a feel of the fresh cool north east wind through your hair, and the beautiful warn sun; you get the feeling that you have arrived in someplace different. It is the Caribbean feel. Not many passengers have the experience of ever setting foot on a tarmac, here you do.

The recent extension  of the existing terminal was designed to reflect the “Beautiful by Nature” theme. We used curved wood glulam beams, to represent the waves and nature in the construction of the open-air check-in area.  The waves flow into the white san beach, represented by the purlin ceilings of the old section of the terminal.

A three-phase renovation of the Providenciales international airport has been completed in February 2017 to endow the airport capacity to cope with larger planes and an enlargement of the passengers’ terminal. What are the outcomes of this expansion and the future plans of the TCI Airports Authority?

We made necessary adjustments to our  infrastructure to accommodate the growth in passenger numbers and increase of airlift. Now  we are focusing at embarking on  further extension; phase four,  designing and building of an additional terminal that will have air bridges and other modern amenities. The  estimated cost is 40 million dollars.

The local airline InterCaribbean is developing Providenciales as its regional hub and have commenced in-transit operations that are growing very rapidly. The existing challenge is to cater adequately for the rapid growth in regional and domestic flights. The expansion of the apron, new terminal and a partial parallel taxiway will adequately accommodate the forecasted rate of regional and international growth.

Presently however,  our focus is on South Caicos airport rehabilitation. It includes full resurfacing and extension of the runway and apron, and the built of a new air traffic control tower, which are near completion. In addition to this a newly designed terminal building and combined services building is to commence construction soon. The entire project works are estimated to cost 35 million USD.

TCI currently hosts two private terminals, the Provo Air Center and Blue Heron Aviation. In addition, the Providenciales Airport's VIP Flyers Club was nominated for the Caribbean's Leading Airport Lounge 2015. The Minister of Tourism, the Honorable Ralph Higgs, highlighted in the interview with WINNE the importance of the luxury tourism for the country. What are the plans of TCI Airports Authority to promote this business?

Included in  the master plan is a new terminal which will facilitate additional lounges, airlines, concessionaries  and many other customer focus amenities including a kids’ play area. our fast track program affords individual the option of not having to stand in ques. The new terminal will focus on accommodating the  high-end clients we attract. In addition, we are on the verge of signing agreements to have built  a new Fixed Base Operator on Grand Turk, which will help to promote development and encourage additional airlift.

Salt Cay airport  needs development. Plans are in place to resurface the runway and carry out a full rehabilitation of the airside to accommodate not only the existing aircraft, but also slightly large aircraft. We are also looking forward to renovating the North Caicos airport. Therefore, our expansion is not just a dream, it is real, physical.

The Minister of Tourism is determined to make TCI a “family islands destination” with an effective connection among the islands, so the travelers do not just stay over Providenciales, but visit the country as a whole. What is the strategy of the Airports Authority to improve the connection between all the regions of TCI?

The airports authority is mandated construct, manage and to ensure that the airports are fully operational. The Middle Caicos airport operations have been suspended due to the lack of activity and demand for such, because it is connected to North Caicos that has a larger airport. The airport in Providenciales is considered the gateway to the country and hence much focus is placed on its operations and development.

The US are the major partner of TCI. There are direct connections to 14 North-American cities and 88% of the passengers come from the US or Canada. What is your strategy to keep growing your connections with those countries?

The strategy we  focus on is one to connect Turks and Caicos mainly with hubs in North America, and elsewhere; such as Gatwick for Europe and Antigua for the Caribbean. This is important as  we would not have sufficient passengers to support a sustainable load factor for direct flights from some  destinations that  are of interest to us. Tactically a passenger may not mind one stop, hence our intent to link with hubs. As an example, we have established a direct route to Fort Lauderdale, where middle eastern airlines flies, and now one stop from the Middle East allows a person to come access the country.

Hopefully there will be a time when the flights can attract sufficient loads to make sustainable direct flights from as far as Europe and South America. However  there are other factors beyond load factors; we do not need just an airport able to accommodate the flights, but also the required amount of hotel rooms, and activities, all of which are taken into consideration. The airport authority is in a position where you have to balance the desired and the sustainability requirements.

After more than 28 years in the international aviation industry, since 2007 you are the CEO of the TCI Airports Authority. What do you feel most proud of in your career?

The contribution and assistance to the professional development of the individuals within the organization I have been a part of. I came back to Turks and Caicos to resurrect a sector where we were losing about 3.5 million a year and I wanted to work with homegrown people to do so. The residents of a country is a very valuable asset for a country that depends so heavily on tourism. Together we were successful in moving from losing 3.5 million per year to generate revenues in excess of 35 million a year.

Harvard Business Review Readers include some of the most influential business leaders and decision makers in the world, many of the in the US. As a conclusion to this interview, what is the final message that you would like to transmit to them?

The future of aviation in Turks and Caicos has an abundance of opportunities. It is growing and it will continue to do so. There are some very good players in the industry and we are fortunate to have individuals who are well versed and look forward to continuing the development of the industry, a critical sector for Turks and Caicos. I can only see it growing both locally and internationally with Providenciales becoming a successful regional hub.