Expensive jet fuel and a soft American economy are threatening to sink Caribbean tourism as airline ticket prices soar and flights are sharply reduced, choking the flow of vacationers that many tiny islands depend upon.
Tourism is the economic cornerstone of the Caribbean, which drew more than 15 million visitors last year to colonial cities and carefree beaches.
“Billions of dollars of investment are being exposed and thousands of jobs are being exposed,” said Allen Chastanet, chairman of the Caribbean Tourism Organization.
Airlines are cutting back across the world as passengers balk at paying fares that have risen along with fuel costs. The Caribbean is particularly vulnerable because one foundering airline, American, controls much of the market — for example, it carried more than 60 per cent of passengers travelling through Puerto Rico last year.
American now expects to cut daily flights out of Puerto Rico’s capital to 51 from 93 in September. Some flights will be cut to Santo Domingo, Antigua, St. Maarten, Aruba and Samana in the Dominican Republic, spokeswoman Minnette Velez said.
Fewer flights to Puerto Rico could also jeopardize the island’s cruise ship industry, since it would be harder for passengers to reach the island to board. Ten cruise ships used Puerto Rico as their home port last year.
Rather than raise ticket prices so high that they’re beyond the reach of most customers, American has decided to cut flights and reduce capacity, Velez said. “Travelling would be completely inaccessible if we increase fares as oil prices rise,” she said.
Other carriers are making similar moves. Spirit Airlines recently said it would close its San Juan hub, and Continental Airlines expects to soon announce destination and flight cuts.
The Caribbean is still affordable for wealthy travellers but resorts “that appeal particularly to price-sensitive families are in a world of trouble,” said Christopher Hart, a professor at the Cornell University School of Hotel Administration.
The flight cuts are coming despite increases in tourism this year to most of the islands, including double-digit growth in U.S. visitors to Antigua, St. Lucia and Jamaica, according to the Caribbean Tourism Organization. The Dominican Republic reported 407,000 U.S. tourists from January to April, a six per cent increase from last year, and Puerto Rico reported increased airline passenger traffic as well.
Now many fear even more cuts, meaning the islands won’t even have a chance to lure more tourists.
“This is just the beginning,” said Peter Muller, a German native who owns the Hotel Coyamar in Samana, the Dominican Republic.
“We’re going to reach a point where it’s no longer worth keeping the airport open.”
In Antigua, where tourism officials tried to lure visitors over the weekend of June 14-15 with a music festival featuring Lionel Richie and Kenny Rogers, most of the tickets sold were to locals, festival chairman Alvin Edwards said.
Flying against the trend is JetBlue Airways Corp., which plans to add daily flights to Puerto Rico from New York, Orlando and Boston starting this fall, and Virgin Atlantic, whose president Richard Branson said that he also might add extra flights from the U.S. to the Caribbean.
“Where things are seriously going wrong is in America,” Branson said. “Virgin America is a great airline, it’s doing very well. We have young planes which are more fuel-efficient than the ones American Airlines has.”