EDITORIAL

The Danger of Relying Only On US Tourism

Friday, May 28, 2004

Recent news from the United States that officials there are increasingly concerned about the possibility of another al-Qaida terrorism attack in that country, perhaps as early as this summer, should send chills through those in the tourism industry in the Cayman Islands.

The US intelligence network has reportedly received a high number of credible attack signals, and although they are non-specific with regard to time and place, the announcement in the media gives Americans, the bread and butter of Cayman’s tourist market, something to worry about.

The news comes at a time when the Cayman Islands finally appears to have shaken off the effects of the multiple terrorist attacks in the US in September 2001. Tourist air arrivals are inching closer to the pre-9/11 levels, real estate sales are strong, and the Central Planning Authority is approving new construction projects at record dollar amounts.

While all of the signs seem to indicate that the Cayman Islands is heading back into one of its cyclical boom periods, it is sobering to realise that everything that has been regained in the 32 months since 9/11 can go up in the smoke of another terrorist attack on US soil.

Understandably, Americans are concerned about things more important than the economy of the Cayman Islands, things like the death of loved ones and the impact that another terrorism attack could have on their own economy. However, the fact remains that, as it stands, this country is heavily dependent on the United States, not only for its prosperity, but also for its very economic survival.

This year, like every other year, more than 80 percent of Cayman’s tourists arriving by air come from the United States. When adding cruise ship passenger arrivals, of which a large majority are also American, and taking into consideration that about 85 percent of the total number of visitors coming here are by cruise ship, it becomes even clearer how reliant the local tourism industry is on the United States.

In effect then, al-Qaida could hold our lifeblood hostage with another terrorism attack.

It can be hoped that should America suffer another terrorism incident, its citizens might not react the same way they did after 9/11. That time was the first that foreign terrorists had acted inside the US with any real degree of success, and it certainly stunned the country. Now that Americans have lived through that attack and have since gone through many elevated alert levels and heightened security measures, maybe another incident will be taken more in stride.

Perhaps one silver lining in Cayman’s burgeoning cloud of cruise ship arrivals is the fact that terrorism seems to have less and shorter-lived affects on that segment of the tourism industry. In fact, cruise ship arrival numbers continued to grow substantially here even immediately after 9/11.

Of course, that would also change if a terrorism attack were to occur on a cruise ship.

The dilemma for our Government is how to make the Cayman Islands become less dependent on the United States so that it is not devastated by an event that has nothing to do with this country.

Probably the most disappointing aspect of Cayman’s recent turn-around in stay-over visitors is that fact that passengers from Europe represent only 5.9 percent of all air arrivals here, which is only up .6 percent from last year. Given that favourable exchange rates make a Cayman holiday more affordable now than ever for Europeans, perhaps a more concerted effort to attract visitors from that side of the Atlantic Ocean should be made.

Unfortunately, if terrorists attack America again this summer, nothing done from this point on would likely prevent a major downturn in Cayman’s economy. Looking toward the future, however, now might be a good time to start thinking about ways of becoming more economically independent from the United States.

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