Janice Allen | New strategy for more equitable and sustainable industry

For decades, the tourism industry has been heralded as the backbone of Jamaica’s economy. But, beneath the glossy numbers, a harsh reality persists: the benefits remain disproportionately concentrated among large, often foreign-owned players, while many local businesses struggle to compete.

Deeper vertical integration by foreign investors continues to marginalise local businesses in key subsectors like transportation, entertainment, and retail. Coupled with the impact of travel advisories from key source markets, Jamaica’s tourism industry is now at a critical juncture. The question remains, how can we reshape the industry to make it more inclusive, equitable and sustainable for all stakeholders?

HIDDEN CRISIS

The past year has demonstrated the very real and lasting effects of travel advisories. Too often, these warnings from key markets like the United States and Canada are dismissed or downplayed. In 2024 when advisories were issued by these major source markets, many medium and small hotels, predominantly Jamaican-owned, reported sharp declines in occupancy levels, average room rates, and length of stay. While the overall tourism sector continues to show resilience, the reality for these businesses is far more challenging.

New mega-properties like RIU Aquarelle and Princess Grand Resort have added over 1,300 rooms, naturally contributing to increased arrival numbers. However, when we strip away these expansions and look at the performance of existing small and medium-size hotels, the situation is deeply concerning. Many of these properties, which have long been the cornerstone of Jamaica’s locally owned tourism sector, are struggling to remain viable.

Based on feedback from industry practitioners in this category, there has been little targeted intervention to specifically support smaller, indigenous businesses that lack the resources to absorb these shocks. These businesses are critical not just for their economic contribution but also for the authenticity they bring to Jamaica’s tourism product. They provide employment, sustain local suppliers, and offer the kind of unique, culturally rich experiences that set Jamaica apart.

If we are serious about preserving the diversity and long-term sustainability of our tourism sector, a more deliberate and inclusive approach is needed. Targeted strategies such as financial support, specialised marketing campaigns to counter negative perceptions, and stronger engagement with local operators must be explored. The industry cannot thrive if a significant segment of its players is left vulnerable. The viability of Jamaican-owned hotels is not just a business concern, it is a national economic priority.

REBALANCING THE TOURISM ECONOMY

A prevailing misconception is that all tourism earnings stay in Jamaica. The truth? Less than 40 cents of every US dollar earned in tourism is retained. While the government collects revenue through the Tourism Enhancement Fund (TEF), room taxes, and other levies, much of the earnings do not remain in the local economy. Recently, the minister of tourism claimed that US$43 billion was earned by tourism, leading many Jamaicans to believe that this amount was pumped into government coffers. This is not the case. What is generated by the industry is not equivalent to what is earned by the government.

It is important to work to increase that retention to at least 60 cents per dollar, by:

1. Prioritising local ownership and participation – Ensuring that local businesses in retail, transportation, and entertainment get a fairer share of the tourism pie.

2. Reducing economic leakage – Strengthening linkages with local producers to limit excessive dependence on imports.

3. Reinvesting in tourism towns and infrastructure – Redirecting tourism earnings into improving the communities that sustain the industry.

SHIFT IN STRATEGY

Jamaica’s tourism industry is no longer in its infancy where the primary focus is rapid expansion, building new hotels, increasing room stock, and aggressively marketing to attract visitors. We are in the mature phase, where success is not measured by how many more rooms we can build, but by how much value we extract from what already exists, ensuring sustainability, and improving overall quality and competitiveness.

Leading tourism destinations like Spain, Thailand, and the Dominican Republic have recognised this shift and adjusted their strategies accordingly. Instead of focusing solely on adding new hotel stock, they have prioritised:

• Upgrading and diversifying existing tourism products – Spain, for example, has moved beyond just sun-and-sand tourism, investing in cultural tourism, eco-tourism, and heritage experiences to attract higher-value visitors.

• Improving infrastructure and local economic integration – Thailand has focused on improving transportation, sanitation, and local business linkages to ensure that tourism benefits a broader segment of its population.

• Managing visitor density and environmental impact – The Dominican Republic, facing overdevelopment in certain areas, has implemented policies to encourage more sustainable tourism growth rather than unchecked expansion.

Yet, in Jamaica, the current approach remains fixated on hotel expansion without equivalent investment in people, infrastructure, or the environment. This is foolhardy. New rooms and attractions mean little if they sit on crumbling roads, face water shortages, or exist in towns burdened by congestion and neglect.

The logical approach to Jamaica’s tourism woes requires a shift in strategy to one which focuses on enhancing the product, improving efficiencies, and ensuring long-term sustainability.

This means:

- Upgrading existing infrastructure – Roads, airports, water supply, and waste management systems must be improved to meet global standards.

- Revitalising older tourism areas – Negril, Ocho Rios, and Montego Bay need significant reinvestment in public spaces, beaches, and cultural sites to enhance visitor experiences.

- Diversifying the tourism offering – We must create stronger local tourism experiences that encourage visitors to engage with Jamaican culture, food, music, and communities.

Applying growth-phase strategies to a mature-phase product is a recipe for diminishing returns.

PATH FORWARD

Jamaica has a choice: continue with the status quo, where tourism benefits only a select few, or pursue a more inclusive approach that empowers all Jamaicans.

It is critical to champion policies that offer opportunities to a wide cross-section of Jamaicans, with emphasis on local business linkages, workers, and communities.

Growth without equity is not real progress. Our industry must evolve – not just to attract visitors, but to ensure that every Jamaican benefits from the wealth it generates.

Janice Allen is a senator and shadow minister, tourism and linkages. Send feedback to columns@gleanerjm.com