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Tourism Investment Climate SECTOR PROFILE The Tourism Product: As a tourist destination Trinidad and Tobago has much to offer – from the traditional sun, sea and sand holidays in Tobago, including excellent diving, to adventure and ecotourism on both islands, or business tourism and meetings, incentives, conferences and exhibitions (MICE travel) in Trinidad. Moreover, like many Caribbean islands, the country remains inexpensive. Trinidad and Tobago has a strong advantage over many of its neighbours in that it has largely escaped the devastating hurricanes which have hit the region in recent years. Contribution to Gross Domestic Product: The Tourism Sector has contributed significantly to the economy of Trinidad and Tobago. According to a study by the World Travel and Tourism Council (WTTC) in 2005, the travel and tourism industry accounted for about 4.8% of total gross domestic product (GDP). In Tobago, the broader travel and tourism economy GDP (direct and indirect) was estimated to represent 46% of the island’s GDP in 2005. The government intends to fully develop the potential of the tourism industry in an effort to successfully diversify the energy-based economy. By 2015 the WTTC forecasts the industry’s share of GDP to rise to 5.6%. Tourism Performance: Trinidad and Tobago enjoyed extraordinary growth during the mid-1990s to 2005 when arrivals grew by 40%. In 2001 though, the events of 9/11, the subsequent downturn in travel demand and the weakness of the euro against the US dollar caused a downturn in arrivals. In 2002 arrivals hit a plateau but by 2003 it picked up and was consolidated by an 8.2% increase to 442,555 air arrivals in 2004. In 2006, visitor arrivals numbered at 461,051. Going forward, international tourist arrivals are expected to rise as a result of a number of factors. These include a weaker US dollar, the image of the Caribbean as a safe-haven, tourist disfavour of long-haul travel and the cost of long-haul travel in light of high energy prices. Click here for complete visitor arrival statistics. Purpose of Trip: The country’s largest share of visitors falls into the leisure/beach/vacation category, primarily visiting Tobago. Visiting friends and relatives or VFR travellers is the next largest category, reflecting the wide Diaspora of nationals overseas. However, closely following the VFR traveller are business and MICE (meetings, incentives, conferences and exhibitions) travellers. Traditionally, the majority of visitors to Trinidad fall in the VFR group. However, in Tobago, the leisure/beach/vacation visitor takes dominance. Major Source Markets: Most of Trinidad and Tobago’s visitors originate from the USA followed by the Caribbean itself. The third most important market is the UK then Canada, Germany and the rest of the world. Tobago’s largest source market on the other hand is the UK followed by the USA, Germany, Canada, Caribbean and the rest of the world. Seasonality: Total arrivals show some fluctuation over any given year (largely for Trinidad) but peak during the winter months with high VFR traffic at carnival time. July and August also record heavy traffic as this is the holiday period in the major source markets. Relatively quiet periods are in May, June, September and October. Competition: Notwithstanding competition from other traditional Caribbean destinations, Trinidad and Tobago’s main competitors are Cuba and Jamaica in the Canadian and German source markets and Barbados and Jamaica in the UK source market. Dominican Republic, the Bahamas and Puerto Rico also pose a threat. Our share of arrivals in the Caribbean is approximately 2% but this figure is trending upwards as we become more attractive as a twin-island destination. Accommodation: The country currently has an accommodation capacity of approximately 6000 rooms, of which roughly 49% are located in Trinidad. Most of the rooms in Trinidad are concentrated in the Port of Spain area, while most of the rooms in Tobago are found in the southwest region of the island. Of the more than 100 accommodation properties in Trinidad and Tobago, only eight have more than 100 rooms providing. These in total provide less than 2000 rooms of the total supply on the two islands. More than 70% of accommodation rooms in Tobago feature a beachfront location. In contrast, only two properties in Trinidad offer the same. Trinidad has five internationally branded hotels: the the Hilton Hotel (380 rooms), the Crowne Plaza (245 rooms), the Holiday Inn Express (80 rooms), Marriott Courtyard (119 rooms) and the newly completed 428-room Hyatt Regency Hotel which is part of the Port of Spain International Waterfront Project 2007-2008.On November 29th 2006, the sod was turned to begin construction of a 150-room Cara Suites Hotel and Conference Hotel to be located opposite the Piarco International Airport. Currently under construction is the 120-room Star Hotel to be located at the Piarco roundabout site. Carlton Savannah Hotel, a 165 room accommodation located in St Anns, is soon to be completed and ready for opening. Airlift: Trinidad and Tobago is home to two international airports – Piarco International in Trinidad and Crown Point International in Tobago. Piarco International Airport, located 25 kilometres east of the capital, Port of Spain, is the largest and most modern transport facility in the Caribbean region. At the 2006 World Travel Awards (WTA) Piarco was voted the Caribbean’s Leading Airport for customer satisfaction and operational efficiency. Caribbean Airlines, Continental, Delta Air Lines, American Airlines and the return of British Airways has carried the total number of international airlines to fourteen operating out of Piarco. Crown Point operates scheduled flights for seven international airlines, namely, British Airways, Caribbean Airlines, Condor, Excel Airways, Delta, Martin and Virgin Atlantic. Charter flights are offered by eight airlines. Inter island domestic flights are served by three airlines with scheduled flights daily. Cruise Tourism: Trinidad and Tobago has seen a decline in its cruise traffic since 2000, largely as a result of repositioning of ships away from the southern Caribbean. The number of cruise visitors in 2004 was almost half what it was in 2000 with Trinidad seeing a particularly sharp decline. Tobago’s cruise business has seen some increases since 2002 after a sharp decline in 2001. Currently both countries are experiencing gradual increases in their cruise passenger arrivals. Economic Performance Gross Domestic Product: The year 2007 marked the 14th consecutive year of positive economic growth for Trinidad and Tobago. Real GDP grew by 5.5% in 2007 in large part due to the oil and gas sector (including downstream activities), the mainstay of Trinidad and Tobago’s economy. This sector’s contribution to GDP was in excess of 40% and grew by 4.4%, a slow down though from 21.4% in 2006. In 2007 the non-oil and gas sector contribution to GDP was 5.0% and grew by 6.7%, surpassing growth in the energy sector since 1997. The impetus for this growth came from the financial, manufacturing and hotel and guest houses sectors which grew by 10.5%, 8% and 8% respectively. Other significant increases came from the Construction & Quarrying and Distribution & Restaurant sectors. The outlook for 2008 is that Real GDP will continue to grow at a robust pace based on production in the oil and gas sector, public sector construction and financial sector. Increase activity in the meetings and conferences segment is also likely to impact on the positive outlook for 2008. Unemployment: Over the last two years, the unemployment rate has been on the decline. In 2004 it moved from 8.4% to 8.0% and further to 6.2% in 2006 as a result of increased activity in the construction and service sectors. At the end of 2007, this figure was 5.5%. Inflation: The year 2007 recorded a decrease in the rate of inflation from 8.3% in 2006 to 7.6%. The previous years of upward inflationary pressure have been principally demand-driven. This is not unusual in an economy that has enjoyed 12 consecutive years of real growth in GDP. Exchange rate: Trinidad and Tobago operates under a floating exchange rate regime. However, in practice it is more of a managed float and pegged to the U.S. dollar. Over the last decade the rate has been approximately TT$6 per U.S. dollar and more specifically in the last three years it has been hovering around TT$6.30 per U.S. dollar. As of 2007, the exchange rate was at TT$6.3282 per U.S. dollar. Interest rate: Over the last year there were sharp increases in the repo, prime lending and 3-month treasury bill rates. These selected rates have moved from being 6%, 9% and 4.86% in 2005 to 8%, 9.67% and 6.01% as of 2006 respectively. The increases were the result of a proactive and prudent Central Bank monetary policy aimed at keeping in check accelerating inflation, excess liquidity and foreign exchange market pressures. Balance of Payments: For several years Trinidad and Tobago has recorded balance of payments surpluses. In 2002 the surplus was US$48.9 million. However, this increased phenomenally to US$1.893 billion in 2005. Increasingly high oil prices and higher export volumes were largely responsible for this positive balance of payments trend resulting in gross official reserves of US$4.9 billion. Credit Rating: Trinidad and Tobago’s issuer credit rating with respect to local currency is currently A+/Stable/A- and A-/Positive/A-2 for foreign currency as assigned by Standard and Poor’s. This investment grade rating is reflective of the country’s solid economic performance.
Source: The Central Bank of Trinidad and Tobago p - Provisional r - revised Competitive Advantages Trinidad and Tobago possesses clear competitive advantages which makes it a preferred tourism investment destination. These include: Geographic Location
Government Legislative Trinidad and Tobago achieved independence from Britain in 1962 followed by republican status in 1976. The twin-island nation has remained a member of the Commonwealth. Fully democratic elections are held every five (5) years, since 1956 and there is universal adult suffrage, with a minimum voting age of 18. A Bicameral legislature exists with the President, His Excellency Professor George Maxwell Richards as Head of State, Executive power lies with Prime Minister, The Honourable Patrick Manning and Cabinet:
The current government, formed by the People’s National Movement (led by The Prime Minister the Honourable, Patrick Manning) took office in early 2003. The next elections are carded for 2007. Judiciary The Judiciary of Trinidad and Tobago comprises the Supreme Court of Judicature and the Magistracy. The Chief Justice is responsible for the administration of justice and heads the Judiciary. The Supreme Court consists of the High Court and the Court of Appeal. The Judges of the Supreme Court are divided into Justices of Appeal who sit in the Court of Appeal and Puisne Judges of which there are 20, who sit in the High Court which deals with indictable criminal matters, family matters where the parties are married, and civil matters involving sums over the petty civil court limit and district courts. The Magistracy deals with petty civil matters (sums less than TT$15,000) and it exercises summary jurisdiction in criminal matters. It also hears preliminary inquiries in indictable criminal matters. The Magistracy is headed by the Chief Magistrate and is divided into 13 districts Sources: www.gov.tt International Monetary Fund Country Report No. 06/32 www.ttlawcourts.org |
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Investment
