Maria: Tourism numbers dip
slightly, but outlook promising
~ Commissioner presents half year economic report ~
PHILIPSBURG--Tourism arrivals, the island’s main economic generator, dipped slightly during the first half of this year compared to the same period in 2006. Stay-over numbers decreased by 0.7 per cent.
Presenting the half year report, Economic Affairs Commissioner Maria Buncamper-Molanus told the press Wednesday that the industry as a whole had experienced a good 2006-2007 high season, but arrivals had slipped during the second quarter.
The decline was attributed to dwindling arrival numbers from the Caribbean, European and South American markets. Asked by this newspaper if the decline could be attributed to the cutting of the tourism advertising budget for these areas in the 2007 budget, the commissioner said there was no exact correlation, but the decline could safely be attributed to the budget cut.
There was good news for the industry as the North American market, which represents 65 per cent of all stay-over visitors, registered a 2.6 per cent increase during the first half of 2007 over the same period in 2006.
For the cruise sector, a total of 803,215 passenger arrivals was recorded for the first half of the year – a 0.23 per cent decrease compared to the same period in 2006. Skyrocketing fuel cost and low demand for the Caribbean as a cruise destination were blamed for the drop in cruisers.
With the allure of the Caribbean said to be failing somewhat to attract cruisers as it did in the past, the commissioner was asked if government considered it wise to proceed with the multi-million-dollar expansion of Dr. A.C. Wathey Cruise and Cargo Facilities, which entails the building of a 445-metre-long 21-metre-wide Genesis class cruise pier. Her answer was a definite yes.
Buncamper-Molanus said the island needed to keep a competitive edge in the region and the investment came with guaranteed cruise passenger arrivals from Carnival Corporation and Royal Caribbean Cruise Line (RCCL), two of the main project investors.
Despite the slight dips, the outlook for the tourism industry “remains promising” especially due to efforts to increase stay-over arrivals from Europe via a weekly ArkeFly charter from Amsterdam and from South America with weekly flights from Venezuela.
Labour
The ever-increasing economic activity, specifically over the past two years, has led to an improved labour market environment, with the official unemployment rate dropping to 10.9 per cent in 2007, from 13.4 per cent in 2005, according to Buncamper-Molanus.
The vast majority of available jobs are for people with VSBO diplomas or lower, suggesting that students of this level should be able to find jobs readily, she added. The demand for highly trained professionals is lower and the trend is for these individuals to be specialists in their fields.
Turnover Tax
A total of NAf. 43,750,277 in Turnover Tax (TOT) was collected in the first half of the year, nine per cent higher than in 2006. “The rate of growth is steadily picking up again, after high double-digit growth was experienced in 2004 and 2005 and then eased in 2006,” the commissioner told the press.
Since inception of the tax in 1997, collected revenues have increased by approximately 2.5 times, “confirming the growth potential of this measure, especially given the current intensification of economic development on the island.”
Government Revenues
Government earnings increased in the first half of the year compared to last year. A total of NAf. 114 million was collected in the first half of 2007, a 4.7 per cent increase over 2006.
Sickness Insurance AVBZ premiums continued to expand by eight per cent in 2007, in line with favourable labour market developments, the commissioner said.
However, overall tax refunds were significantly higher than collected amounts and room tax receipts also dwindled in each month relative to 2006, except for March, causing some setbacks in the cash flow.
General Outlook
The commissioner said the economy in general had “remained steadfast with a good showing” through the first half of 2007. Real growth intensified in 2006, at an estimated rate of 5.2 per cent compared to 4.8 per cent in 2005.
Primary areas of growth were the construction sector, business activities (real estate, renting) and financial intermediaries.
For this year, she added that investments visibly continued in the private and public arenas. Some additional 1,000 condominiums are expected in the next three to four years as projects such as Indigo Bay Estates and Barbaron Residences come on line.
To tap into the expanding sector, government has drafted and is now reviewing a proposed condominium tax. The commissioner did not give a timeline for when the tax would be introduced or what the figure would be, preferring to wait until the process was closer to completion.
