The private sector is expected to contribute at least six hundred thousand dollars of the total amount. The fund will be managed and monitored by the Economic Recovery Fund (ERF) Committee, which has proven experience in executing emergency and recovery tourism marketing programs from Hurricane Luis to 9-11.
The proposed fund is deemed necessary given the gloomy economic news issuing from recession-ravaged United States, where majority of the island's tourists originate. Similarly, the global financial crisis is also affecting the island's other source markets such as Canada, Europe and South America, making the outlook for the year ahead rather bleak.
Such is the impact of this crisis that the chairman of the Caribbean Tourism Organization and minister of tourism for Antigua & Barbuda, Harold Lovell, recently predicted a decrease of between 20 and 30 percent in visitor arrivals to the Caribbean in the first quarter of 2009.
"What is most important is to maintain job levels. We must stabilize the economic situation and minimize job losses," he was quoted as stating.
The effect of the global meltdown has begun to be felt on St. Maarten, where hotels have been reporting significant drops in bookings, and where they have refrained from hiring additional staff during the high season as is customary.
Almost 3,000 persons work in the hotel and restaurant sector of the island's tourism industry, according to the 2007 figures of the Central Bureau of Statistics (CBS). The Wholesale and Retail sector employed 4,315 workers, while over 2,000 people work in the Construction and Real Estate sectors respectively. In addition, another 1,784 people in the Transport and Storage sector.
"All these sectors, all these workers, will be affected by the ongoing financial and economic crises in our primary source markets," SHTA president Emil Lee, stressed.
The overriding thrust of the joint SHTA, St. Maarten Tourist Bureau proposal is therefore to secure jobs.
According to this proposal, the main development goals towards which this project would contribute are outlined in the Tourism Master Plan:
An increase in tourism revenue and foreign exchange for St. Maarten
Maintain and increase ADR (average daily revenue) for hotels
Improving the living standards in St. Maarten;
Consolidating and strengthening St. Maarten's competitive position in the Caribbean;
Increasing the number of annual tourist arrivals for St. Maarten;
Developing St. Maarten as a ‘year round' tourist destination
Increasing and maintaining year-round employment
The project goals related to these development objectives include:
a) To increase the number of visitors from the various source markets during peak, shoulder and slow seasons;
b) To support marketing and promotional efforts in a number of important existing markets;
c) To support marketing and promotional efforts by travel wholesalers in key tourist markets.
d) To support the scheduled and current airlift servicing St. Maarten from the various gateway source markets.
The idea is to execute a series of cohesive and integrated marketing activities, geared towards stimulating traffic from the various markets covering the remaining high season and the Summer and Fall periods.
Noting that tourism is the backbone of the island's economy, contributing some US$500 million in direct revenue, while employing about two-thirds of the resident population, the joint proposal emphasizes the adverse effect of the global economic crisis on St. Maarten, pointing out that it is resulting in a loss of business of between 30% and 50%.
According to the SHTA and St. Maarten Tourist Bureau, the crisis has led concretely to
• A stagnation in the projected number of tourist arrivals
• A strong decrease in the average daily rates
• A deteriorating tourism market share among all segments
• A decline in tourism expenditures, including cruise passenger expenditures, as a result of the economic crisis.
• Loss of Government revenue
• Pressure on Infrastructure development and training
Citing various sources and statistics, the SHTA and St. Maarten Tourist Bureau stressed that though St. Maarten is a resilient destination, it will be a challenging year as a result of the "meltdown" (housing, transportation, hurricanes, financial - consumer confidence) with reductions of almost 30% in visitors from the arrivals."
SHTA is of the opinion that, despite restrictions on borrowing by the Island Territory, similar to the situation after 911, flexibility should be shown to the Island Territory in terms of being able to borrow on the market comparable to what was done with the central bank. Attracting a soft loan on the local market could be used as an economic stimulus program, specifically geared towards the marketing stimulus program. It is time that all parties in this case again think outside the box similar to 2001.