Low consumer confidence
Consumer confidence in our source tourism markets is low. Turmoil on the global financial markets, fears of double dip recession, high unemployment, fears regarding job security, will all contribute to low consumer confidence and therefore lower discretionary spending. One of the first discretionary items to be eliminated is vacations, especially international vacations.
Low Consumer and Industry Awareness
Since the closure of the ERF committee, the destination has had very little presence in the market place. This has left the consumer awareness and demand for the destination at historic lows. Ultimately, this results in lower occupancy and lower rates for the industry.
Weak investment Climate
Excessive bureaucracy and highly cumbersome system is a strong disincentive to investment.
While the SHTA agrees with the need for a tax system that is simpler, more transparent and more fairly distributed, the current uncertainty about the future tax system is a high barrier to stimulating increased investment from current or future investors. 6 months ago, upon request of the tax committee, the SHTA submitted a position paper for discussion to the tax committee and ministry of Finance but has yet to receive feedback or further discussion. Even though a new proposal was to be put forward to the stakeholders in June, it's now September and we've heard nothing except rumors that the temporary 2% point TOT increase will now be extended for another year.
This lack of confidence in the economy, will result in investors adopting a wait and see attitude towards making capital improvements and other investments. This lower spending will translate into less economic activity, which will also mean less revenue for government and for the community in general.
Traffic
While the SHTA certainly understands and agrees with the need to upgrade infrastructure, the consequences for residents, tourists and businesses as a result of excessive delays caused by the traffic jams on the island has a major impact on the economy. Every effort to reduce the impact on traffic should be made. Some suggestions include temporary implementation of ferries/ water taxis, 24 hour or evening work schedule, increased traffic control officers to manage the traffic flow.
Plans
While the SHTA is confident that government is in the process of developing plans for economic growth, tax reform, labor reform, tourism development, infrastructure, most people, including key stakeholders like the SHTA, are not aware of the plans. The lack of awareness is another deterrent to stimulating investor confidence. In times of economic distress, the community needs to feel that the political leadership has a clear vision and action plan to restore economic activity.
The SHTA feels that immediate and dramatic action is needed to turn the economy around.