(1)     Tourism industry must be remodelled

(2)     Liberalisation brings changes to tourism (WTO/GATS)

Tourism industry must be remodelled

Friday - Jul 18 2003

The modernisation of national and regional tourism organisations is vital in order for the Caribbean Tourism industry to compete in this forcefully advancing era of globalisation.

These were the opening remarks of Jean Holder, Secretary General of The Caribbean Tourism Organisation at the start of the Caribbean Seminar on Best Practices in Public/Private Sector Co-operation and Partnerships at the Accra Beach Hotel and Resort yesterday, which is scheduled to continue today.

The Secretary General said regional and national tourism organisations, as well as other private and public sector actors in the industry have a mandate to provide “solutions in the areas of earning foreign exchange, creating employment and generating government revenue to finance social services”.

Holder expressed the concern that “the Caribbean’s dependence on tourism for future socio-economic development is... considerable”, especially at time when the efficiency of the international market is at hand.

The tourism industry, as Holder explained, “is undergoing cataclysmic changes”, due to the dynamics of globalisation, trade liberalisation, advancing information and communications technology, and geopolitical developments. He lamented that as a consequence, “many travel and tourism private and public sector entities may have lost their way”.

He explained that regional and national airlines and travel agencies have to rethink their business strategies and redefine their roles within the industry.

He further explained that national and regional tourism organizations need to be modernised and required “different approaches, different systems and different skills”, in order for them to function effectively as they are in danger of becoming obsolete.

Holder said this seminar would, therefore, act as a “prototype for the public/private sector consultations about best practice and new models which must now take place at the national level”.

This seminar was organised by the CTO, the World Tourism Organisations Business Council (WTOBC) and the Caribbean Hotel Association (CHA) to assimilate global trends, models and best practices of co- operation and partnerships in order to attain excellence in Tourism development.

The Secretary General hoped that during the seminar mechanisms could be established to carefully examine regional programmes of the CTO and CHA, where these two organisations could merge in the future to create the CHTO.

He added that the arguments for and against this merge would be heard before a “highly competent and objective consultancy firm”, that would allow the best operational model produced to achieve excellence in Caribbean tourism.

Liberalisation brings changes to tourism

by the Barbados Private Sector Trade Team

Tuesday 27, May-2003

It is frequently stated that tourism is the engine of growth within the Barbadian economy. This view is well supported by the statistics that show the contribution of the tourism industry to Barbados’ foreign exchange earnings, and the number of persons employed within the industry.

The approximately one million cruise and stay over visitors that came to Barbados in 2001 spent an estimated US$686.8 million. The tourism sector accounts for approximately ten per cent of the employed labour force in Barbados and generates around 15 per cent of the country’s gross domestic product.

Given the importance of a healthy tourism industry to the future sustainability of the Barbadian economy, the implications to the industry from trade liberalisation will be an area under critical review by the Barbados Private Sector Trade Team (BPSTT).

The World Trade Organization/General Agreement on Trade in Services (WTO/GATS), addresses the tourism industry under the category: tourism and travel-related service (TTRS). This includes hotels & restaurants, travel agents and tour operators, tour guides and others.

Detailed assesment

Of course the tourism industry encompasses a much greater range of services than is captured under these headings and there is ongoing debate about the development of a more detailed ‘tourism annex’.

In the meantime however, countries assessing the GATS/tourism relationship and drafting offers for liberalisation of the tourism industry, should include in their assessment other GATS categories with relevance to tourism such as recreational services, cultural and sports services, business services, distribution services, transport services etc.

To assist this type of more detailed assessment, a ‘checklist’ has been devised which is essentially a list of services that are related to tourism.  By considering each of these in the assessment, broad consideration of the industry will be better achieved.

The GATS requires countries to make liberalisation commitments pertaining to the tourism industry under the three broad headings of market access, national treatment and most favoured nation. Under market access a country may agree to make provisions to allow foreign service providers to provide their services within the domestic market.

National treatment means that a country agrees to treat foreign service providers no less favourably than local service providers, and the most favoured nation principle means that a country agrees not to discriminate between the foreign service providers of different countries.

A country makes only the liberalisation commitments that it wants to make.  It is a myth that under the GATS a country is required to provide completely free access to its market immediately. The GATS encourages the progressive liberalisation of trade in services and recognises the rights of countries to have measures in place that support national development goals.

However, GATS does require that ‘trade distorting’ and ‘unfair’ barriers to market access, and discriminatory restrictions on the operations of foreign suppliers, are clearly identified and catalogued in a country’s schedules.  Also, if a country does not offer to liberalise an aspect of a service sector it may be requested to do so by another country interested in doing business in that market.

In submitting its liberalisation commitments for tourism, Barbados will address each service category under four distinct ‘modes of supply’ which refer to the physical mechanisms by which a service is provided to the market. The four modes of supply are: cross border trade; consumption abroad; commercial presence; and movement of natural persons. Examples of the four modes of supply within the tourism context include:

Cross border trade: Travel agents and tour operators provide a large portion of their service via telecommunications networks. Liberalisation would mean that Barbados would guarantee foreign service providers fair and non-discriminatory access to and use of Barbados’ telecommunications networks in order to ply their trade.

Consumption abroad: The best example of this is tourism itself where consumers travel to foreign destinations to experience the provision of the services. The tourism industry is often viewed as already largely liberalised because this process of consumption abroad has been in place for decades.  Measures affecting an individual’s ability to leave home, make a trip and return home uninhibited, and his ability to pay for these transactions, would be factors affecting ‘consumption abroad’ under tourism.

GATS impact

The GATS is unlikely to have much impact in this regard because it does not address a country’s visa and customs requirements nor foreign exchange restrictions that a state may impose.

Commercial presence: Liberalisation would mean that Barbados would agree to allow foreign tourism service providers to establish a physical presence in the form of an office in Barbados in order to sell their service. This could apply to foreign travel agents, car hire companies, property management companies etc.

Movement of natural persons: This is where individuals are permitted entry for the purpose of providing a service for a temporary period of time.  Movement of natural persons does not apply to people seeking residence in foreign countries. Individuals may move to work independently or attached to a company.

The provision of tourism services often depends on applied knowledge and experience that can only be provided by specialists who may have to be brought in from abroad. This aspect of the GATS applies not only to Barbados importing expertise for temporary employment here, but also to the opportunity for local tourism workers to gain experience by temporarily working abroad.

The GATS does not prevent states from controlling the security, health or economy of the country and as such national immigration laws are not under negotiation.

The Barbados Private Sector Trade Team will collaborate with its partners in the tourism industry in order to assess pending liberalisation requirements and issues. Tools such as surveys, interviews and statistical research will be useful in this assessment, the outcome of which will be well informed and appropriate negotiating submissions on Barbados’ behalf.

SOURCE: Barbados Nation

NOTE: The articles introduced here do not necessarily represent the views of the Tourism Investigation & Monitoring Team (tim-team)