Philipsburg – The St. Maarten Hospitality and Trade Association (SHTA), the largest private business representative on the island, has serious questions about the cut in the Draft Tourism Budget.
Cutting the expenditures of the Tourism Office by NAf. 2.4 million (20.9% reduction from last year) can only be seen as a totally inappropriate effort to balance the 2013 budget. Our island depends on tourism, it is our main source of income, without tourism the inflow of monies to our island will be severely reduced, having an unavoidable impact on all sectors.
The SHTA cannot imagine that these cuts have been run through the Macro Economic Model developed by USONA, to see what impact it would have on the Gross Domestic Product (GDP).
SHTA’s quick and rough calculations show a 5% drop in the stay-over arrivals at PJIA will result in a 3% drop in hotel occupancy equivalent to a loss of 104,000 room nights a year.
Due to the domino effect, this would impact the GDP by about 1% which comes to about NAf. 20 million of which NAf. 3 million alone in direct and indirect taxes. Were the marketing effort to be lowered by the 20.9% mentioned in the draft budget, we can only hope that tourism does not decline at a similar rate.
So, what would it take to make up for the 5% drop in stay-over tourism as mentioned above? It will take most likely 2 charters per week, carrying tourists destined for resorts on St. Maarten.
Unfortunately, the Tourism industry on St Maarten has seen its high seasons get shorter and its low seasons get longer and deeper, consequently because of its interdependency, the whole economy follows the same trajectory.
Adding to this, the current situation in Europe and the United States of America, where most of our tourists come from, the SHTA fears that these budget cuts are going to create an even larger deficit and further weaken the economy of the island. It will take combined public – private sector efforts, the necessary marketing fund and a dedication from the government of St. Maarten to attract more tourists to the island.
The SHTA would like to urge the Ministry of Finance to revisit the current budget cuts and make the necessary changes so that we do not kill the goose that lays the golden eggs. Instead of cutting the tourism budget we should really be looking at increasing and optimizing our marketing efforts in order to generate the necessary influx of monies.
Stakeholders should be consulted in these matters and decisions of government should not only look at short term planning but also, envision what is best for St. Maarten in the mid and long term and what we want for our children and their children.
The SHTA is dedicated to bringing quality to all aspects of life on St. Maarten by promoting sustainable economic development for its members in cooperation with the social partners and the creation of a fair marketplace. For more information please contact our offices at 542-0108 or visit our website at www.shta.com.