caribbean dependence on tourism

• Travel, Tourism & Hospitality

Most tourism-dependent economies in the Caribbean 2022

Caribbean countries or territories with the highest share of gdp generated by travel and tourism in 2022.

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International visitor arrivals in Finland 2022, by country of origin

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Visitor arrivals in Helsinki 2022, by country of origin

Number of outbound trips from Finland 2022, by country of destination

Number of arrivals in tourist accommodation in Finland 2012-2022

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About the industry

• Basic Statistic Total tourism contribution to GDP in Cuba 2019-2021
• Basic Statistic Total contribution of travel and tourism to GDP worldwide 2019-2033
• Premium Statistic Domestic and outbound trips by residents in Spain 2010-2022
• Premium Statistic International same-day tourist arrivals in Hungary 2009-2023
• Basic Statistic International tourist arrivals in Hungary 2009-2023
• Premium Statistic British tourism spending in Spain 2010-2022
• Premium Statistic International visitor trip expenditure Australia FY 2010-2023
• Premium Statistic International tourist expenditure in Latvia 2008-2021
• Basic Statistic International tourism receipts in Norway 2019-2033
• Basic Statistic Share of travel and tourism spending in Spain 2022, by traveler origin

About the region

• Basic Statistic Share of total tourism contribution to GDP in Latin American countries 2022
• Basic Statistic Total tourism GDP in Latin America and the Caribbean 2019-2021
• Premium Statistic Leading countries in the Americas in the Travel & Tourism Competitiveness Index 2021
• Basic Statistic Share of employment in travel and tourism in the Caribbean 2022, by country
• Premium Statistic Inbound tourism spending in Montserrat 2010-2022
• Premium Statistic Countries in the Americas with the highest inbound tourism receipts 2019-2022
• Basic Statistic Total tourism contribution to GDP in Caribbean countries 2022
• Basic Statistic Share of tourism in total employment in the Caribbean countries 2021
• Basic Statistic Inbound tourism spending in the Caribbean 2019-2021
• Premium Statistic COVID-19 impact on inbound tourism volume in Latin American subregions 2020-2021

Selected statistics

• Premium Statistic Countries with the highest number of inbound tourist arrivals worldwide 2019-2022
• Premium Statistic Countries with the highest outbound tourism expenditure worldwide 2019-2022
• Premium Statistic Leading countries in the MEA in the Travel & Tourism Competitiveness Index 2018
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How the 'Tourism-Dependent' Caribbean Bounced Back and How Far the Region Could Still Go

Tourism has potential to drive nearly $100 billion in revenue, more than a million new jobs in caribbean by 2032.

By Dana Miller Hotel News Now

CORAL GABLES, Florida — The Caribbean region has emerged from the worst of the COVID-19 pandemic as a top tourism destination and trends point to continued growth in revenue and job creation.

A recent Caribbean impact report by the World Travel and Tourism Council forecasts potential revenue of $96.6 billion and the creation of 1.34 million new jobs by 2032, said Nicola Madden-Greig, president of the Caribbean Hotel and Tourism Association and group director of marketing and sales at the Courtleigh Hospitality Group.

“This is major in terms of the potential for Caribbean tourism,” she said during the first day of the 14th annual Caribbean Hotel & Resort Investment Summit.

However, the region must overcome headwinds to get to that point. Challenges include the need for better air connectivity, investment in technology and relationships with the government, Madden-Greig said.

“The Caribbean was noted as the most tourism-dependent region in the world,” she added. “Probably it was thought that we would be the last one to rebound [from the COVID-19 pandemic]. Ladies and gentlemen, these are the figures … some of our destinations are in double-digit growth. For example, we have the U.S. Virgin Islands, St. Martin, Guadalupe [and] Martinique.”

Remington Hotels CEO Sloan Dean said consumers are not pulling back from spending more of their discretionary income on travel and experiences.

He said the Caribbean specifically is set up nicely to capture demand from travelers who want to blend business and leisure.

“Even myself, personally, I have worked from the Caribbean in the last 12 months for a week or two,” he said. “I think this dynamic of [remote work], blending business travel with personal … all those trends are here to stay.”

Not only is tourism on the rise in the region, interest both from investors and consumers is growing for resorts within the all-inclusive segment, speakers said.

During the “Views From the Boardroom — Round One” session, Playa Hotels & Resorts President and CEO Bruce Wardinksi said the appetite for all-inclusive resorts has been driving change in the hospitality industry for the past 10 years.

“I remember going to the NYU hotel conference probably about 10 years ago and sat on the very first all-inclusive panel. Before that, no one really talked about it. From our standpoint, there’s been a real shift in the types of properties, certainly with the brands coming into all-inclusive. That’s been the biggest change today,” he said.

Despite increasing competition in the all-inclusive space, Rob Smith, divisional vice president of full-service hotels at Aimbridge Hospitality, said finding partners on projects in the Caribbean has not been difficult.

“When you’re running a hotel, and that’s a big part of the economy on the island, local partners want to get involved because you’re bringing customers into the island. You seek those opportunities because the more you bring the local community into the operations of the hotel, the more successful you’re going to be, the more integrated you’re going to be with the island,” he said.

Carolyne Doyon, president and CEO in North America and the Caribbean at Club Med, echoed the importance of local partnerships.

“When we talk about local communities, local partners, we are also becoming an economic driver for the community. So not only for partnership and what they can bring for us, it’s also our responsibility of what we can bring to them. When they believe in the brand, when you’ve been there for a while and they trust you, they grow with you. You allow them to become more profitable and they can expand even more,” she said.

Local partners can also be integral in tackling some of the challenges facing tourism in the region.

Doyon said one issue she's particularly worried about this season is the widespread presence of sargassum. Sargassum is a genus of large brown seaweed that floats in oceans without ever attaching to its floors, and it often has a strong, unpleasant odor.

Caribbean officials have warned that this year's presence of sargassum will be historically strong, she said.

"I will tell you, we see it [near] our properties in the Dominican Republic and also in Mexico. It's a true threat. Today, there is a barrier of 5,000 miles of seaweed moving in the Atlantic and the Gulf of Mexico. If you look at weight, it's 13 million tons of seaweed," she said. "There's a cost of operation to remove the sargassum."

Photo of the Day

Data Point of the Day

"Panama is also becoming one of the big hubs for the Caribbean [in terms of air travel], not so much Miami. We're seeing that Miami is down by 50%, while Panama City is up 240%," said Nicola Madden-Greig, president of the Caribbean Hotel and Tourism Association and group director of marketing and sales at The Courtleigh Hospitality Group.

Quote of the Day

"Tourism is the most important economic driver of the Caribbean economies. I think that we have such ample opportunity to make the Caribbean a more prosperous place. It's engagement, it's also responsibility .. and I think the time has come [for tourism operators] to ensure that we build resilience, that we work with our communities." —Karolin Troubetzkoy, executive director of marketing and operations at Anse Chastanet and Jade Mountain Resorts

Read more news on Hotel News Now.

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Caribbean Tourism Development, Sustainability, and Impacts

• First Online: 09 June 2022

Cite this chapter

• David Mc. Arthur Baker 3  

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1 Citations

The Caribbean economy is highly dependent on the tourism industry and the protection of the natural and cultural attractions on which it depends is critical. To address this concern, this chapter provides a snapshot of the progress that has been made on sustainable tourism development in the Caribbean region. There is now more demand from the traveling public for industries to be environmentally friendly and in order to continue to use tourism as a means of economic advancement, sustainable practices must be adopted. The evidence suggests that there are great economic, sociocultural, and environmental impacts of tourism in the Caribbean region that are both positive and negative. The actions of the accommodations sector are commendable but there is the need for all major stakeholders to better manage the negative impacts of tourism development. The Caribbean Tourism Organization has developed a policy framework which consists of guiding principles and integrated policies regarding sustainable tourism development, The Caribbean Sustainable Tourism Policy and Development Framework. A shock, such as COVID-19, can lead to economic collapse as communities heavily dependent on tourism have no capacity to respond to the loss of their primary revenue source. However, in order to strengthen the resilience of small island tourism development, the Caribbean region is transitioning toward community-driven solutions through innovation, employee training, upgrades, greater digitalization, and environmental sustainability.

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Baker, D.M.A. (2022). Caribbean Tourism Development, Sustainability, and Impacts. In: Cannonier, C., Galloway Burke, M. (eds) Contemporary Issues Within Caribbean Economies. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-98865-4_10

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Perspectives

The Caribbean Needs Tourism, and Tourism Needs Healthy Coral Reefs

AI and social media are helping quantify the economic value of coral reefs

January 14, 2019

By Luis A. Solórzano, Former Executive Director, Caribbean Division

The Caribbean region is more dependent on tourism than any other region in the world—the sector accounts for over 15 percent of GDP and 13 percent of jobs in the region. And almost all visitors to the Caribbean take part in some activity that relates to coral reefs—either directly, like snorkeling and scuba diving, or indirectly, like enjoying sandy beaches, eating fresh seafood and swimming in crystal waters. That means the health of the Caribbean’s tourism industry—and thus the whole regional economy—is dependent on the health of its coral reefs.

But just how much value do reefs produce? After all, “what gets measured gets managed and improved.” The Nature Conservancy (TNC) recently released the results of a study that focused on reef-adjacent activities and the value they generate for the tourism industry, island governments and Caribbean communities. This study, which builds on an earlier body of globally focused research produced by TNC, found that reef-adjacent activities alone generate an estimated $5.7 billion per year in the Caribbean from roughly 7.4 million visitors. When combined with reef-dependent tourism activities, they generate $7.9 billion total from roughly 11 million visitors.

In other words, a major draw for people traveling to the Caribbean are activities related to coral reef ecosystems, and both the tourism industry and other aspects of the local economies depend on healthy coral reefs to keep this relationship afloat. This evidence offers a pivotal opportunity for advancing coral conservation initiatives not only in the Caribbean but around the world, as it can catalyze both the tourism industry and local governments and communities to invest in protecting and restoring coral reefs for the benefit of economies and incomes. 

We now know that these natural wonders are responsible for generating billions of dollars, sustaining livelihoods and anchoring economies in the Caribbean as well as other tropical destinations across the globe . And that should translate into a major incentive to conserve them.  

We now know that coral reefs generate billions of dollars ... and that should translate into an incentive to conserve them.

Equally remarkable is the method by which this information came to light. The study, led by The Nature Conservancy, with support from JetBlue, the World Travel & Tourism Council and Microsoft, merged contemporary culture with modern science by using artificial intelligence to analyze social media content. Social media platforms provide valuable insight into how the general public spends their recreational time and, importantly, their discretionary income. Machine-learning algorithms, a type of artificial intelligence, allow computers to autonomously make determinations based on learned information.

Using algorithms developed by the Microsoft Cognitive Services Computer Vision API, the study analyzed over 86,000 social images and nearly 6.7 million social text posts for visual and language identifiers that indicated reef-adjacent activities, such as white beaches, turquoise waters, reef fish and sea turtles, which were then selected according to geotags indicating proximity to a reef of 30 kilometers or less. The social media metrics derived using artificial intelligence were integrated with traditionally sourced data, like visitor center surveys, tourism business sales figures and government-reported economic data, to produce estimated reef-adjacent economic values for 32 Caribbean countries and territories.

The study produced vital information about the connection of specific islands and the entire region to reef-related tourism. Key findings include:

• The Dominican Republic and Puerto Rico benefit from visitor expenditure of over $1 billion per year directly linked to coral reefs.
• The Bahamas, Cayman Islands and Puerto Rico receive the equivalent of over 1 million visitor trips per year directly linked to coral reefs.
• The top 10 percent highest-value reefs generate over $5.7 million and 7,000 visitors per square kilometer per year. These reefs are scattered in almost every country and territory with the exception of Haiti. Barbados, Puerto Rico and the U.S. Virgin Islands have a large proportion of high-value reefs, each with an average expenditure value of over $3 million per square kilometer per year.
• The countries most dependent on reef-adjacent tourism include many small developing island states  like Anguilla, Antigua & Barbuda, Bermuda, St. Kitts & Nevis and St. Martin, where there may be relatively few options for earning income outside of reef-associated tourism.
• Only 35 percent of reefs throughout the Caribbean are not used by the tourism sector, indicating that there are scarce options for movement of reef-associated activities to new areas. Most of those not used for tourism are in remote locations.

The Caribbean needs tourism, and tourism needs healthy coral reefs—and the findings from this study, which shine a spotlight on the pervasive dependence on reefs in almost every corner of the region, suggest that this would hold true for any region in the world that has similar reliance on its natural environments to sustain tourism, livelihoods and economies.

In a world where coral reefs are at grave risk due to climate change, overfishing, pollution and other threats, the tourism sector and the people that depend on it grow more vulnerable.  There is urgency, and armed with the information on the economic value of coral reefs revealed in this study, the tourism industry, and governments and communities in tourism-dependent areas, are motivated to invest in the protection and restoration of these essential ecosystems. Understanding this equation and its significance makes us smarter in the global fight to protect and restore nature.

Download the Study

Executive Summary

Executive Summary: Estimating Reef-Adjacent Tourism Value in the Caribbean

Full Report

Full Report: Estimating Reef-Adjacent Tourism Value in the Caribbean

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Tourism’s Recovery in the Caribbean

As travelers in the U.S. looked for a pandemic getaway this past holiday season, the Caribbean was a popular destination in mind. Meanwhile, many Caribbean countries saw the season as a chance to make up for lost time and recover much-needed revenue after the pandemic dealt a loss to tourism and their once-thriving economy. Most countries in the Caribbean are incredibly reliant on tourism, which in 2019 accounted for up to 26 percent of total GDP and up to 80 percent of employment in some countries. Even despite major hurricanes that frequently disrupt travel to these islands, the region has economically recovered every time due to tourist demand. However, the pandemic has given the region a new challenge – Caribbean countries cannot rely on tourist demand alone as many people are still reluctant to travel. Governments had hoped that in 2021, widespread coronavirus vaccines and a safe policy for visitors would prevent further spread and make up for lost revenue in the region. While cruises and tourists have slowly returned to the Caribbean, the Omicron surge during the lucrative holiday season hampered the return to form that many had hoped.

The Dominican Republic has tried to adapt by attracting U.S tourists with lower thresholds to entry compared to other Caribbean countries. In 2021, their government’s unorthodox approach emphasized that tourist-facing workers be vaccinated as opposed to visitors, who do not need to be vaccinated nor obtain a negative test. In fact, many guests even chose to not wear masks in the hotels. Despite the burden, this placed on  Dominican citizens, the policy brought a major boost to the economy and returned the country to pre-pandemic levels of growth. While the policy was an economic success, Dominicans have seen repercussions due to their lenient policy on visitor vaccinations. Omicron’s untimely surge during the holiday season caused a jump in the island’s number of COVID cases in late December, reaching a peak of about 7,000 per day on January 12. In response to the high volume of cases and overloaded hospitals, healthcare workers are pushing for vaccination requirements for visitors, arguing that the current policy is “discriminatory.” Although the Dominican Republic’s COVID numbers have since declined, the Omicron surge serves as a warning about the dangers of opening up too soon.

Many countries had to balance putting their citizens’ safety over their own economic health and market share of tourism – losing out on visitors now can mean fewer people will consider visiting in the future– so countries need to adopt different policies for welcoming visitors back. One trend for countries like Mexico and the Bahamas saw a rise in tourists due to their proximity to the United States and relative popularity compared to other destinations, but have also witnessed a parallel rise in cases. Some Caribbean governments have tried to make their islands more appealing to tourists by investing heavily in new hotels, airport terminals, and initiatives for remote-work vacations, hoping visitors will see the islands as “pandemic escapes” in the coming years. But others in the region, like Dominica and the Cayman Islands, are less known and less accessible islands. These islands continue to struggle despite having new connections to U.S airports, as tourists prefer more familiar or safer destinations with greater CO. Many of these countries don’t expect a return to pre-pandemic levels of tourism until 2023 at the earliest. 

Policies alone will not allow the region to fully recover. Although U.S. travelers are coming to the islands, visitors from Canada, Europe, and Asia have yet to arrive due to steeper reluctance to travel long distances for a vacation, continued travel restrictions, and steep re-entry restrictions upon returning home, making it hard to plan a vacation to the islands. Additionally, many smaller island nations rely on revenue from cruises, an industry hit hard by the pandemic as cruise companies like Royal Caribbean continue to cancel voyages due to pandemic concerns. Cruises have historically aided in the region’s economic recovery after nearly every hurricane season , bringing in flocks of tourists. But cruise lines have canceled voyages due to COVID outbreaks and generally struggled to recover from the pandemic. Without a robust cruise industry, Caribbean islands are at a loss on how to compensate for this huge loss of income. 

One case that highlights the significance of the Caribbean’s current lack of tourists in Cuba. Prior to the pandemic, Cuba was just beginning to open up tourism to the United States, but after flight reductions, heavy entry restrictions for COVID, and economic sanctions, Cuba’s tourism industry completely shut down. As a country increasingly reliant on tourism in recent years, the loss led to an economic crisis like many others in the region, further exacerbated by U.S. sanctions. Instead of focusing on revitalizing its economy first, Cuba focused on pandemic safety and launched an effort to fully vaccinate its citizens. Cuba became one of the fastest countries to vaccinate its citizens, and it waited until a healthy majority was vaccinated before opening up to visitors this last November, one of the last Caribbean countries to do so. The country had hoped that pandemic safety would be a draw compared to many other countries in the region. Though the effects of this policy were not immediate ( projecting a 92 percent loss in tourism ), many Cubans are hopeful that the continued, gradual reopening of the world will bring tourists back to the island in the coming years to support its recovery.  Others in the region, like Trinidad, have followed Cuba’s strategy and opened their borders around the same time in late 2021. However, Cuba’s imposed sanctions combined with slow travel pushed them to take the safest reopening approach in the region. Cuba bet on pandemic safety as a tourist draw, but slow travel growth is hindering their recovery strategy and prolonging economic hardships. 

Each Caribbean country has taken a unique approach to economic recovery best suited to their situation – but, because of a continued lag in tourism from the pandemic, all of the islands are itching for tourists to return. Despite the pandemic’s setbacks, Jamaica’s tourism minister stated that many countries are “anxious for normality” having witnessed other countries in the region open up. The Caribbean has stood out for its impressive recovery, faster than any other region in the world since 2020. Many countries are optimistic about their recovery or have already returned to pre-pandemic levels of visitors. While these countries are doing the best they can to attract tourists, it is vital that the tourism industry completely recovers in order for the Caribbean to rebound in a post-pandemic world.

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Instant Insights: Key Takeaways From Our Research

• 27 Jan, 2022 | 19:29
• Sector Governments Sovereigns

We Expect The Economic Rebound Will Be Quicker In The Caribbean Than In Other Tourism-Dependent Regions

Rebounding economies will support improved deficits and debt metrics, from weak levels, over the next two years, supportive institutional structures, or the lack thereof, will remain a determining factor in ratings and resiliency, government management of the economic and fiscal recovery is an important component of our rating outlook triggers, related research.

This report does not constitute a rating action.

Key Takeaways

• After taking multiple negative rating actions on sovereigns across the tourism-dependent Caribbean over the past two years, we expect ratings will stabilize at lower levels over the next 12 months as tourism accelerates and the region moves beyond the pandemic-induced trough.
• A GDP recovery will lessen the need for spending support measures and boost revenue collection, improving deficits and weak debt metrics, while external accounts will likely weaken.
• Rating resiliency will continue to depend on the degree to which institutional support structures are in place, and the way in which the sovereigns manage recovered revenues from a rebounding tourism sector.

S&P Global Ratings anticipates that solid economic growth will contribute to more stable ratings over the next year. Since March 1, 2020, we have taken nine negative rating actions on the tourism-dependent sovereigns in the region, including negative outlook revisions and downgrades. The main drivers of these actions were deteriorating per capita incomes; significantly higher deficits and debt levels; and, in some cases, institutional deterioration.

In our view, despite the challenges associated with new COVID-19 variants, the worst of the economic impact of the pandemic has passed in the region, and tourism has begun to rebound at a faster pace than in other areas of the world. The recent rapid spread of the omicron variant highlights the inherent uncertainties of the pandemic but also the importance and benefits of vaccines. While the risk of new, more severe variants displacing omicron and evading existing immunity cannot be ruled out, our base case assumes that existing vaccines can continue to provide significant protection against severe illness. At the same time, the economic impact of the pandemic on the region has waned and economies are proving more adaptable, as many governments, businesses, and households are tailoring policies to limit the adverse economic impact of recurring COVID-19 waves. Although year-end data are not yet available, the World Travel & Tourism Council reports that it expects travel and tourism increased by 47.3% in 2021 in the Caribbean, versus 30.7% for the global economy. At the same time, the United Nations' World Tourism Organization's latest global data as of December 2021 show that the Caribbean had the lowest drop in tourist arrivals year to date compared with any other region in the world, and was more than 50% stronger than overall global arrival statistics (table 1). The region's economy has benefited from greater traveler confidence, more relaxed restrictions compared with other tourism-dependent regions, and relatively rapid vaccination. Proximity to the U.S., where travel rebounded more quickly than in other developed countries, and dependence on U.S. tourists, has also aided the recovery. In addition, constitutional association with the Kingdom of the Netherlands or the U.K. facilitated strong and early vaccine access, as well as fiscal support, in some cases, which helped accelerate growth in some sovereigns in 2021.

Looking ahead, although the recovery will be uneven across countries, we expect that the region as a whole will continue to benefit from its proximity to and dependence on the U.S., where we expect strong economic growth in 2022 of 3.9%. Notwithstanding potential downside risks related to new COVID-19 variants and the impact of their spread on travel, we expect the weighted-average real GDP growth rates for the sovereigns listed in chart 1 will be 5.9% in 2022. Sovereigns' vaccination rates, COVID-19 transmission and restrictions, reliance on U.S. tourism, and degree of economic contraction in 2020 will likely contribute to the speed of recovery in 2022.

Following significant deterioration in deficits in 2020, and still-weak levels in 2021, governments across the region will benefit from recovered revenues collected from a rebounding tourism sector, both directly and indirectly, as well as economies that are less subject to containment measures. At the same time, those governments that have implemented income support measures will gradually decrease their spending as the need for such support winds down. All eight tourism-dependent Caribbean sovereigns discussed in this article implemented some sort of income support, wage subsidy, or transfer program during the pandemic. The scope of the programs largely depended on the government's fiscal flexibility and the availability of concessionary funding. Aruba and Curacao, for example, which are both constituent members of the Kingdom of the Netherlands, were able to provide payroll subsidy programs whereby employers were compensated, in some cases for 80% of wage costs. This was possible, in part, due to the 0% interest loans the Netherlands provided to these governments. On the other hand, countries like Jamaica benefited from a surge in remittances, which provided an income cushion to some people. In 2020, remittances in Jamaica represented 21% of GDP, compared with 16% in 2019.

The sizable deficits in the region have led to significant increases in government debt, which we expect will take many years to reverse. Those sovereigns that had greater fiscal flexibility to provide stronger economic packages to their populations, and at the same time were more severely affected by the downturn in tourism and activity restrictions, saw larger increases in their debt burdens. Nevertheless, because these sovereigns also have generally higher credit ratings than those with less fiscal flexibility, and were able to benefit from concessionary, or zero-cost funding and low interest rates, the impact of this increase on the cost of debt is more limited. Looking ahead, the pace of reversing this increase will not only depend on decisions made by governments regarding countercyclical spending as the recovery takes hold, but also on the pace of economic growth.

Although the effect of the pandemic on external accounts in the region has been much more limited than originally anticipated, we expect external balances will weaken slightly over the forecast horizon. During the pandemic, the high import content of the tourism sector meant that imports shrunk considerably as tourism contracted, which significantly offset the reduction in exports, along with lower energy prices during much of 2020 and early 2021. At the same time, the external support many of these sovereigns received through concessional funding or remittances provided a boost to central banks' foreign exchange reserves. As travelers return, the import content of tourism offerings will translate into an increase in imports, while higher energy prices will also negatively affect these sovereigns' balance of payments because all are energy importers.

Status as a Kingdom of the Netherlands member, British overseas territory, multilateral lending institution program participant, or a sovereign that lacks substantial external support structures, will continue to determine vaccine access, level of concessional funding, and ability to provide countercyclical support. In turn, these factors will affect the speed of economic recovery and fiscal and debt sustainability. Of the eight English- or Dutch-speaking tourism-dependent sovereigns in the region rated by S&P Global Ratings, three are British overseas territories, two are constituent members of the Kingdom of the Netherlands, and two are either recent graduates, or current program participants of International Monetary Fund (IMF)-supported programs. As constituent members of the Kingdom of the Netherlands, Aruba and Curacao benefited from strong and early access to vaccines starting in February 2021, for example, which aided their ability to re-open their economies and the pace of tourism recovery in 2021. Likewise, British overseas territories also received vaccine support from the U.K., which accelerated their growth in 2021. These sovereigns now have higher vaccination rates than others in the region, and even some of the tourist source markets, lowering the risk of future movement restrictions.

We expect most of those sovereigns that were able to access significant grants or concessionary, low-cost funding during the pandemic will continue to receive support in 2022, which will limit the impact of higher debt burdens on their creditworthiness. Both Curacao and Aruba, for example, have benefited from mutual aid and assistance from the Netherlands since the start of the pandemic in March 2020. The Netherlands has provided liquidity support in the form of zero-interest bullet loans for more than $1 billion to the two countries, as well as offering medical support and food aid. This is in addition to the arrangement that Curacao has with the Netherlands, predating the pandemic, under which the Netherlands subscribes to Curacao's debt issuances at the same interest rate at which the Netherlands issues debt.

Those sovereigns that have strong relationships with multilateral funding institutions will also likely benefit from continued access to ample concessionary funding over the next year. For example, Barbados entered into an extended fund facility program with the IMF starting in October 2018, and has since received $425 million in financing over six successful reviews in the program, in addition to about $750 million from the Inter-American Development Bank, the World Bank, Caribbean Development Bank, and the Development Bank of Latin America. In addition, as a somewhat recent graduate of a substantial IMF-supported program, and shortly after the onset of the pandemic in 2020, Jamaica obtained $520 million via the IMF's rapid financing instruments (RFI), as a precaution to support balance-of-payments needs. Unlike previous IMF support, the RFI funds are granted without policy conditions. Although we understand that it could be reallocated to budgetary support, to date, the money remains with the Bank of Jamaica to support the country's foreign exchange reserves.

A key issue for our rating outlook triggers in the region over the next two years will be how these sovereigns manage the economic recovery, including how they use and manage the revenues collected from a rebounding tourism sector, which will have implications for deficits and debt sustainability. Following multiple negative rating actions over the past two years, seven out of eight sovereign ratings in the region now have stable outlooks, while one has a negative outlook (table 3). Nevertheless, a common thread in almost all of the ratings' downside and upside scenarios is the ability, or lack thereof, of the respective government to narrow deficits and contribute to a stabilized or lower debt burden, following two years of sizable deficits caused by the pandemic. Although this will, in part, depend on the evolution of the pandemic and the pace of the economic recovery, government fiscal policy and expenditure management will also play a crucial role.

• Global Sovereign Rating Trends 2022: Despite Stabilization, The Pandemic Threatens The Recovery , Jan. 27, 2022
• Global Credit Outlook 2022: Aftershocks, Future Shocks, And Transitions , Nov. 30, 2021
• Barbados , Nov. 25, 2021
• Research Update: The Commonwealth of The Bahamas Ratings Lowered to ‘B+’ From ‘BB-‘ On Continued Deficits, High Debt , Nov. 12, 2021
• Research Update: Jamacia Outlook Revised To Stable From Negative; ‘B+’ Long-Term And ‘B’ Short-Term Ratings Affirmed , Oct. 4, 2021
• Research Update: Turks And Caicos Islands ‘BBB+/A-2’ Sovereign Credit Ratings Affirmed; Outlook Remains Stable , May 26, 2021
• Bermuda , April 28, 2021
• Research Update: Montserrat Sovereign Credit Ratings Affirmed At ‘BBB-/A-3’; Outlook Stable , April 13, 2021
• Research Update: Aruba Long-Term Ratings Lowered to ‘BBB’ from ‘BBB+’ On Weaker Economy And Higher Debt; Outlook Stable , March 15, 2021
• Curacao , Feb. 16, 2021

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Tourism Review

ISSN : 1660-5373

Article publication date: 10 February 2023

Issue publication date: 7 April 2023

This paper aims to provide a comparative analysis of sustainable tourism development across the Anglophone Caribbean region from the post-independence period of 1962 to the 2020s. The perspective explores the implications of insularity, tourism investment and the pace of technology adoption on the potential realisation of the sustainable development goals (SDGs) in the islands of Jamaica, Barbados, Trinidad and Tobago and the Eastern Caribbean States.

Design/methodology/approach

The viewpoint uses secondary data from grey literature such as government policy documents, academic literature, newspapers and consultancy reports to explore the central themes and provide a conceptual framework for the paper.

The findings reveal that Caribbean Small Island Developing States (SIDS) are nearer to the light-green single-sector approach to sustainable tourism development. The overarching findings reveal that the region’s heavy focus on economic priorities results in less attention to competitiveness challenges such as environmental management, social equity and technological innovations.

Research limitations/implications

The research presents a comprehensive overview of the tourism development trajectory of other tourism-dependent island-states. The research offers lessons and cross-learning opportunities that may be useful to decision-makers within SIDS. The main limitation is that the findings may only be transferable and generalised to the extent that other jurisdictions bear similar macroeconomic governance structures and cultural characteristics to Caribbean SIDS.

Practical implications

This paper provides a meaningful discussion and contributes to the body of knowledge on the history of Caribbean tourism development, the challenges and future potential of sustainability and lends itself to opportunities for future research in the Caribbean and other SIDS.

Social implications

The study outlines the social implications for inclusive, responsible and sustainable tourism that can potentially take Caribbean SIDS from slow growth to efficiency in developing the tourism product, including the technological environment. This can reduce inequalities, contribute to socio-economic development and improve the region’s human capital.

Originality/value

This paper provides a comprehensive comparative analysis of Caribbean tourism development specific to Jamaica, Trinidad and Tobago, Barbados and the Eastern Caribbean States. No previous work has been done to compare tourism development within this grouping. Hence, this paper is essential in informing decision-makers and providing the foundation for continuing research in this area.

这篇观点性论文对英语加勒比地区从1962年独立后到本世纪20年代的可持续旅游发展进行了比较分析。该研究前瞻性探讨了牙买加、巴巴多斯、特立尼达和多巴哥以及东加勒比国家的保守性、旅游投资和技术采用速度对潜在实现可持续发展目标的启示。

该研究利用灰色文献中的二手数据, 如政府政策文件、学术文献、报纸和咨询报告, 进行中心主题探索, 并为论文提供概念性框架。

研究结果显示, 加勒比小岛屿发展中国家(SIDS)更接近于以轻绿的单一部门方式实现可持续旅游发展。总体研究结果显示, 该地区过于关注经济优先事项, 导致对环境管理、社会公平和技术创新等竞争力挑战的关注较少。

本研究全面展现了一些依赖旅游发展的岛屿国家的旅游发展路径概览。这项研究为小岛屿发展中国家的决策者提供了可能有用的经验和交叉学习机会。本文研究局限在于, 只有在与加勒比小岛屿发展中国家类似的宏观经济管理结构和文化特征的行政区, 研究结果才可能转移和推广。

这篇论文提供了有意义的讨论, 有助于认知加勒比旅游发展史、可持续发展的挑战和未来潜力, 并为加勒比和其他小岛屿发展中国家的未来研究提供了机会。

该研究概述了包容性、负责任和可持续的旅游发展的社会启示, 这些启示可能使加勒比小岛屿发展中国家从缓慢发展转变为开发旅游产品(包括技术环境)的效率。这有助于减少不平等现象, 促进社会经济发展, 并改善该地区的人力资本。

本文提供了加勒比旅游发展的综合比较分析, 具体到牙买加、特立尼达和多巴哥、巴巴多斯和东加勒比国家。此前没有研究对这些国家的旅游业发展进行比较。因此, 这篇论文为决策者提供必要信息和为这一领域的继续研究建立了基础。

Este trabajo ofrece un análisis comparativo del desarrollo del turismo sostenible en toda la región del Caribe anglófono desde el período posterior a la independencia de 1962 hasta la década de 2020. Se explora las implicaciones de la insularidad, la inversión turística y el ritmo de adopción de la tecnología en la posible realización de los Objetivos de Desarrollo Sostenible (ODS) en las islas de Jamaica, Barbados, Trinidad y Tobago y los Estados del Caribe Oriental.

Diseño/metodología/enfoque

El análisis se basa en datos secundarios bibliográficos a partir de documentos de política gubernamental, literatura académica, periódicos e informes de consultoría para explorar los temas centrales y proporcionar un marco conceptual en este documento.

Conclusiones

Las conclusiones revelan que los pequeños estados insulares en desarrollo (Caribbean Small Island Developing States, SIDS) están más próximos del enfoque del turismo como único sector económico o sostenibilidad débil para el desarrollo del turismo sostenible. Las conclusiones generales revelan que la fuerte concentración de la región en las prioridades económicas hace que se preste menos atención a los retos de la competitividad, como la gestión medioambiental, la equidad social y las innovaciones tecnológicas.

Limitaciones/implicaciones de la investigación

La investigación presenta una visión global de la trayectoria de desarrollo turístico de otros Estados insulares dependientes del turismo. La investigación ofrece lecciones y oportunidades de aprendizaje que pueden ser útiles para los responsables de la toma de decisiones en los SIDS. La principal limitación es que las conclusiones sólo pueden ser transferibles y generalizadas en la medida en que otras jurisdicciones tengan estructuras de gobernanza macroeconómica y características culturales similares a las de los SIDS del Caribe.

Implicaciones practices

Este documento ofrece un análisis significativo y contribuye al conjunto de conocimientos sobre la historia del desarrollo del turismo en el Caribe, los retos y el potencial futuro de la sostenibilidad, y se presta a oportunidades para futuras investigaciones en el Caribe y otros SIDS.

Implicaciones sociales

El estudio esboza las implicaciones sociales del turismo inclusivo, responsable y sostenible que puede llevar a los SIDS del Caribe de un crecimiento lento a la eficiencia en el desarrollo del producto turístico, incluyendo el entorno tecnológico. Esto puede reducir las desigualdades, contribuir al desarrollo socioeconómico y mejorar el capital humano de la región.

Originalidad/valor

Este trabajo proporciona un análisis comparativo exhaustivo del desarrollo del turismo en el Caribe, específico para Jamaica, Trinidad y Tobago, Barbados y los Estados del Caribe Oriental. No se ha realizado ningún trabajo anterior para comparar el desarrollo del turismo dentro de esta agrupación. Por ello, este trabajo es esencial para informar a los responsables de la toma de decisiones y sentar las bases para continuar la investigación en este ámbito.

• Tourism development
• Sustainable tourism
• Responsible tourism
• Agenda 2030
• Desarrollo turístico
• Turismo sostenible
• Turismo responsable

Spencer, A.J. , Lewis-Cameron, A. , Roberts, S. , Walker, T.B. , Watson, B. and McBean, L.M. (2023), "Post-independence challenges for Caribbean tourism development: a solution-driven approach through Agenda 2030", Tourism Review , Vol. 78 No. 2, pp. 580-613. https://doi.org/10.1108/TR-01-2022-0049

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The extreme uncertainty surrounding the tourism recovery in the Caribbean highlights the importance of boosting innovation and supporting transformations that align tourism destinations and products with post-pandemic global demand trends, according to a report of the Inter-American Development Bank.

Most global tourism reports predict a 2-to-4-year period for a full recovery to 2019 levels. However, the Caribbean could either lead or lag the global recovery, depending upon the specific circumstances in the main Caribbean source countries and in Caribbean destinations themselves.

Imagining a Post-COVID Tourism Recovery: Regional Overview analyzes key drivers of tourism demand in the short term, including the evolution of the pandemic and the COVID-19 vaccination roll-out, the economic environment of source countries, the split between business versus leisure tourism, and airline capacity, among others.

“Over the longer term, Caribbean countries must spur innovation and reinvigorate their tourism offerings,” said Olga Gómez, Tourism Lead Specialist at the IDB. “It is no longer enough to depend on the lure of splendid beaches. Tourism destinations need to invest in improving their competitiveness, aligning their tourism products to the broader local and global economic trends, and exploring new and traditional emerging market segments such as global nomadism or nature-based tourism.”

Even for the less-tourism-intensive economies of Guyana and Suriname, where the tourism sector economic contribution is relatively small compared to the regional and worldwide averages, there is room for improving the sector’s contribution to growth and employment in the coming years.

The report is part of the Quarterly Bulletin series produced by the economic and tourism sector team from the IDB’s Caribbean Department. While it analyses economic challenges facing member countries – The Bahamas, Barbados, Guyana, Jamaica, Suriname, and Trinidad and Tobago – many of its conclusions are relevant to the broader Caribbean region. The study contains more detailed economic overviews of the six IDB member countries.

The study presents global travel sentiment analyses and post pandemic tourism demand trends. Given travelers’ revealed preferences and the fact that most current tourism activity relies on the region’s attractive natural assets, environmental sustainability and climate change adaptation will be more critical than ever. These issues must therefore be prioritized in the public and private sector policy and investment agendas, the study says.

The report also updated the IDB’s Tourism Dependency Index, which calculates the relative dependence of over 160 countries globally on tourism for economic output, employment, and exports. Of the world’s fifteen most tourism dependent economies, eight are in the Caribbean, led by Aruba (ranked first in the world, with a score of 80 out of a possible 100 on the index), with The Bahamas, Barbados, and Jamaica joining the list of most tourist-dependent economies.

Based on a database developed from various national sources, a breakdown is also now available for tourism arrivals to the three most tourism-dependent economies. Overall, 2020 represented a contraction of international arrivals of 76 percent for The Bahamas, 67 percent for Barbados and 69 percent for Jamaica. This is in line with the estimate by the UN World Tourism Organization of a 67 percent contraction for the broader Caribbean region.

“On the positive side, firms have been adjusting business processes, and governments have been advancing in digitalization in response to the pandemic,” the report notes. “This form of innovation could lead to productivity increases that are sustained into the post-pandemic period.”

About the IDB

The  Inter-American Development Bank  is a leading source of long-term financing for economic, social and institutional projects in Latin America and the Caribbean. Besides loans, grants and guarantees, the IDB conducts cutting-edge research to offer innovative and sustainable solutions to our region’s most pressing challenges. Founded in 1959 to help accelerate progress in its developing member countries, the IDB continues to work every day to improve lives.

Bachelet,Pablo A.

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Unpacked: A History of Caribbean Tourism. By Blake C. Scott

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Stanley Fonseca, Unpacked: A History of Caribbean Tourism. By Blake C. Scott, Journal of Social History , Volume 57, Issue 2, Winter 2023, Pages 355–357, https://doi.org/10.1093/jsh/shad024

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Blake C. Scott’s new work Unpacked: A History of Caribbean Tourism is a wide-reaching and nuanced analysis of modern mass tourism’s emergence from Caribbean colonialism in the first two thirds of the twentieth century. Cognizant that we are inundated with images of a tourist-friendly Caribbean, Scott sets out to “denaturalize” tropical tourism, showing that it was not an inevitable result of the region’s beauty but the product of history. Modern tourism has naturalized its own dominance over the region and obscured its own colonial past, Scott argues, through romanticized narratives of history and images of timeless, pristine paradise. With flowing prose and persuasive analysis, Unpacked uncovers a host of imperial actors–explorers, naturalists, writers, colonial administrators, revolutionaries, and migrants–who contributed to the creation of the tourist’s Caribbean as an idea and a space.

While it is commonplace in scholarly studies to consider tourism as a neocolonial practice, Scott notes that there is a dearth of literature connecting the history of Caribbean colonialism with mass tourism’s contemporary hegemony. This is due to the emergence of tourism studies from sociology and anthropology rather than history, resulting in a historiography that is, at times, over-theorized and under-researched. Unpacked builds on a transnational, multilingual archival base to focus on U.S. tourism in Panama and Cuba, with brief sojourns elsewhere in the Caribbean. Following a historiographical turn that has located imperial dynamics in a wide range of arenas, Scott attends to “the multifaceted ways that imperialism and visions of the frontier, capitalism, science and technology, environmental change, literary imaginations, and political power struggles converged to remake the Caribbean into a modern vacation” (3).

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Will Caribbean over-dependency on tourism be its downfall?

By Ralph Birkhoff

When the Caribbean islands shut down their borders a few months ago and all the tourists went home, the tourism industry knew it was in for a rough ride. The season was in full swing and still had a few valuable months of revenue-producing time left before the seasonal hurricane closings. Tourism was up in most islands for the year, and this was the season that would have helped recoup the losses of the 2017-18 season shattered by hurricanes Irma and Maria.

Now the tourism sector is faced with an unknown reality. Most major resorts are planning (hoping) for an October re-opening and have written off these last few high season months. Sandals Resorts recently announced they are taking bookings for June, but with the airlift to the region shut down and no committed dates for services to resume, this may be wishful thinking. Aruba recently announced border opening by July 1, but will the airlines be operating by then? If they do indeed open for tourism, it may create a tremendous advantage over other Caribbean islands that remain closed, but could this be a dangerous decision that puts the people of Aruba at risk?

This is the dilemma. Since these island economies are so completely dependent on tourism, when they are ‘closed for business’ it affects almost every islander’s income. Some directly – some indirectly – but practically everyone. New development stops affect the construction industry. Project halts affect all the service industries. No food is ordered affecting local farmers and wholesalers. Months of no tourism means months of no income, and that puts virtually everyone at risk economically.

Governments are faced with an impossible decision: Do we open up our borders to kick start our economy and get everyone back to work at the risk of a pandemic nightmare, or do we stay closed and safe and go through an economic shock that we might not recover from?

The future hangs in the balance between health authority direction, government decisions on border access, airline services, and the upcoming hurricane season. There is certainly pent up demand from tourists. They desperately want to get out of their homes and travel. In many cases, they have already paid for their vacations and are sitting on credits with a time limit, many with first-time vacation dreams, planned weddings, and honeymoons.

Islands like Anguilla which successfully battled the pandemic with early action and which is now virus free with no new case tests sent out in over 45 days are taking small steps to try to get people back to work. Restaurants, bars, and retail stores recently reopened but with a small local population largely dependent on tourism-based income, and now on a limited budget – and with no tourists on the island – it may be a futile exercise. But at least they’re trying.

The economic impact of this pandemic on the Caribbean is yet another very real example of why the region needs to diversify its economy. The region is experiencing a real-time case study of what experts have been telling governments for years – it’s dangerous being over-dependent on a single industry. It’s time now that leaders in the region stop courting resort developers and start taking proactive action by their leadership, supporting their investment promotion agencies more, and to focus on Foreign Direct Investment (FDI) from alternative industries.

The region has many opportunities that are evident in its current shortfalls. Clean energy, agriculture, ICT, financial services, manufacturing – are some of the areas that should have been focused on long ago. If they had been, what the Caribbean is experiencing now might not have dealt it such a terrible blow.

Lumping the very diverse Caribbean islands together as equally tourism-dependent, as this author does, is unacceptable.

Several Caribbean islands — Puerto Rico, Cuba, Dominican Republic, Barbados, Trinidad, Curacao, and others — have had multi-sector economies for decades based on some combination of agriculture, manufacturing, financial services, and other revenue sources.

Those islands almost exclusively devoted to international tourism like the Cayman Islands, The Bahamas, and Saint Martin will be hard hit this year and next. The others, including those where tourism receipts form less than 30-40 percent of national revenue will be able to ride out this pandemic by strengthening the other sectors of their economies.

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Promoting Sustainable Development through Tourism in the Caribbean

Adam ratzlaff, alejandro trenchi.

Photo by makenzie cooper on Unsplash

December 7, 2023

The Caribbean is reliant on tourism to keep the regional economy growing, but the cruise industry reaps most of the benefits and reliance on tourism also makes the region vulnerable to climate impacts. These are problems that can solve one another, write Alejandro Trenchi and Adam Ratzlaff.

N Secretary General António Guterres has called the Caribbean Basin “ ground zero ” for the impacts of climate change. While countries in the region have a relatively small carbon footprint , the Caribbean will feel the impacts of climate change more acutely than other regions—particularly in the short term. At the same time, regional economies are heavily dependent on the tourism industry, which are also dependent on the Caribbean as part of their business model. Rethinking how tourism is conducted in the Caribbean and developing public-private partnerships will not only strengthen resilience critical for Caribbean nations and the tourism industry, but also support sustained economic development. 

With stunning scenery, pleasant tropical weather, rich cultural heritages, and proximity to the North American market, tourism represents a significant and lucrative economic sector for the Caribbean. The decline of the Caribbean’s agriculture industry in the 1980s prompted tourism to become the region’s undisputed economic driver. While in 1970 the region received roughly 4 million visitors, it now receives approximately 28 million visitors annually. Today, tourism accounts for 13.9% of the regional GDP as well as 15% of regional employment.

Despite the importance of tourism to the regional economy and the growth in the number of visitors, the impact of growing tourism in the region has declined as the relative importance of the cruise industry in the region has expanded. According to the Caribbean Development Bank, while real tourist expenditure grew from $6.8 billion in 1989 to $13.1 billion in 2014, the average expenditure per visitor declined by 30.1%. Some of this is due to the growth of the cruise industry in the region. While a long-stay tourist spends approximately one week in their destination, a cruise passenger only stays one day in the country of arrival—with many choosing to stay aboard the ship. On average, a cruise ship tourist spends 94% less than a long-stay tourist. The result is fewer economic opportunities for local economies. 

The Caribbean’s Climate Vulnerability

This reliance on tourism makes the Caribbean extremely vulnerable to external shocks, raising doubts about the region’s ability to provide long-term, sustained economic growth. While the region’s economy shrank as a result of both the 2008 financial crisis and COVID -19, the region is particularly susceptible to climate change and natural disasters—particularly hurricanes which have devastated regional economies. Scientists expect that more devastating hurricanes, droughts, heat waves, and other climate change-related events will pose increasing threats to the region. The danger of climate change and worsening natural disasters is not only a problem for the governments and peoples of the Caribbean but also for the private sector. Companies will face greater risks and may lose out on important business. The threat of more devastating hurricanes as well as biodiversity loss poses significant concerns for the profitability of Caribbean tourism. Extreme weather events and pollution endangers the region’s most valued tourism assets such as coral reefs, beaches, and tourism infrastructure including ports.

Given these concerns, it is vital for the private sector to engage with regional governments to strengthen climate resilience and climate-proof their businesses. While this should be done across the private sector, the cruise industry should play a leading role in supporting these efforts given that the Caribbean represents approximately 43% and 46.7% of total cruise passengers in 2019 and 2022, respectively. While cruise lines note that they have taken important steps, more can be done.

One way that governments and the cruise industry can collaborate to develop public-private partnerships is to increase the amount of time that cruise ships spend in port rather than traveling between destinations. By leveraging the positions of cruise ships as portable hotels, cruise lines can encourage individuals to arrive via alternative means and provide the opportunity for guests to spend greater time on location. 

The Caribbean remains among the world’s most indebted regions—with an average public debt to GDP ratio of 90.8% in 2021. In addition to its high debt, the region’s middle-income status places further structural constraints both in terms of financial and human capacity to boost resilience and economic growth, and policy makers need to implement innovative solutions to not only boost the tourism industry’s resilience, but increase its competitiveness and secure long-term inclusive economic growth. Cruise lines can leverage their access to international finance to develop public-private partnerships that invest in key infrastructure.

While climate change represents an existential threat, there is a window of opportunity to reimagine how tourism works in the Caribbean with an eye toward a more profitable, sustainable, and equitable future. Looking for partnerships between Caribbean governments and the cruise sector may provide an important space to ensure more equitable development in the Caribbean while also ensuring that the cruise industry does not lose its most valuable asset—the locations of its cruises. 

Editors’ Note: This article was included in our COP 28 special edition, which was published on November 21, 2023, and which you can find here . All articles were written with that publication time frame in mind.

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• January 9, 2023

Tourism in the Caribbean

The Caribbean has a very diverse culture as a result of the region’s rich history. Countries are home to many historical man-made attractions such as forts and colonial era structures, as well as many natural attractions, primarily pristine beaches all complemented by a warm tropical climate. It is no surprise that many countries in the region have sought to capitalize on these features by promoting the tourism industry, attracting visitors from around the globe. The tourism industry, primarily international tourism (by air and cruise), has become a vital part of Caribbean economies with many being heavily dependent on the sector not only for driving economic activity but also to generate much needed foreign exchange. Inter-regional tourism, while present, does not contribute on the same scale because of deficiencies in air connectivity in combination with a prohibitive relative ticket cost. Limited number of flights along with high taxes, fees, and charges (TFCs) on regional flights make it cheaper for travelers to fly outside of the region.

The World Travel & Tourism Council (WTTC) notes that eight out of the ten countries most dependent on tourism are from the Caribbean. Tourism contributes approximately 13.9% of GDP for the entire Caribbean, the highest share of any region in the world. The contribution of travel and tourism towards GDP for Caribbean countries is shown in Figure 1.

The reliance on the tourism sector has made the economies of the Caribbean very vulnerable to shocks in the global economy as well as the environment. The tourism sector is highly dependent on international conditions as was proven with the COVID-19 pandemic. Major source markets for the region are the United States of America (US), United Kingdom (UK), Canada, and France, making up 70% of all travelers entering the region in 2019 according to the WTTC. In the height of the pandemic, strict lockdown measures were introduced in these major markets, driving Caribbean economies to a virtual standstill.

Further to this, the Caribbean is also highly susceptible to natural disasters. According to the OECD, the Caribbean is the second most environmental hazard-prone region in the world, with natural disasters and climate change causing major economic and infrastructural damages. Recent examples of natural disasters that have struck the region are Hurricane Dorian in 2019 that made landfall in The Bahamas, causing roughly USD3.4 billion (over 25% of GDP) in damages; Hurricane Maria in 2017 which ravaged Dominica, destroying roughly 90% of the island’s infrastructure and costing an estimated USD1.3 billion (226% of GDP).

Tourism Industry Recovery

The tourism industry came to a standstill in the height of the COVID-19 pandemic, with lockdown measures and strict travel restrictions being imposed by governments to curb the spread of the virus. International travel was generally restricted to only what was absolutely necessary for 2020 and only eased slightly in the Q1 2021. It was not until the Q2 2021 that restrictions began to gradually ease as vaccines were more readily available around the world and the number of cases began to fall. The easing of restrictions saw the return of tourists as air travel resumed, even though with strict testing and vaccination requirements. While the cruise industry was essentially closed off for most of the pandemic, nearing the end of 2021 and throughout 2022, the industry reopened, though, its performance remains below pre-pandemic levels.

Data from the United Nations World Tourism Organization (UNWTO) shows that as of September 2022, global tourism has recovered significantly, only 27% below 2019 levels. Recovery in the Caribbean has been much more robust, with the region outpacing most of the world. UNWTO data indicates that monthly tourist arrivals for September 2022 were the same as 2019, though total arrivals for the year is 18% less. The recovery path for tourism in the Caribbean region is shown in Figure 2.

In the Caribbean, the recovery of the tourism industry varied greatly depending on the restrictions and travel policies in place in different countries. Countries such as Jamaica were able to recover more quickly than others in the region largely due to restrictions being eased at a much quicker pace than the rest of the region. Jamaica was amongst the first in the Caribbean to ease and subsequently remove travel restrictions for international travelers; in March 2022 travel authorization requirements were removed for entry into Jamaica, making the country open to all visitors. Given the significant contribution of tourism towards Jamaica’s GDP (29.1% of GDP in 2019), growth in the Jamaican economy began to recover, primarily driven by the tourism industry. Further, in April 2022, all testing requirements were removed for travelers entering Jamaica, which allowed for an improvement in processing speeds for travelers. As a result, the recovery of the tourism sector in Jamaica accelerated, with the months following, almost reaching 2019 levels. Figure 3 shows the total amount of tourist arrivals in Jamaica from 2019.

In the height of the pandemic, travel into the Eastern Caribbean ground to a stop. Data from the Eastern Caribbean Central Bank (ECCB) shows that for the period April 2020 – December 2020 total travelers entering the Eastern Caribbean was a mere 1,887, this is compared to 2.8 million for the same period in 2019. Latest data from the ECCB (March 2022) shows that while tourist arrivals have recovered, levels were still well below where it was pre-pandemic. Figure 4 shows total arrivals for the entire Eastern Caribbean.

On a country level, the rate of recovery has varied due to restrictions being eased at different periods from country to country. Some of the earliest countries to ease restrictions were St Lucia and Grenada, with the former easing restrictions in March 2022, and the latter removing all restrictions in April 2022. Countries such as St Vincent and the Grenadines have only recently removed pre-testing requirements for fully vaccinated travelers as of August 2022, whereas Antigua and Barbuda, and St Kitts and Nevis have fully removed all entry requirements that were in place.

Barbados’s economy depends on the tourism industry for a significant chunk of activity (29.5% of GDP in 2019). It is of no surprise that with the stagnation of the industry, the Barbadian economy suffered a severe contraction. With regards to COVID-19 restrictions, Barbados has been relatively conservative, keeping some travel restrictions in place until September 2022, with a gradual easing at key periods to aid in recovery efforts. The easing of restrictions and the subsequent recovery in tourism has been the main driver of growth for the past six quarters in the Barbados economy. Tourism arrivals do however remain well below pre-pandemic, reaching 71% of 2019 levels in September 2022. Figure 5 shows total tourist arrivals into Barbados.

The tourism industry in the Caribbean is expected to sustain its recovery, however, at a slower pace. Growth in the tourism sector for 2023 is projected by WTTC to slow further to 11.1% in the Caribbean region, much lower than 2021 and 2022 which saw growth of 36.6% and 27.2% respectively. Pent up demand, easing of COVID protocols by countries, and a forecasted improvement in the cruise industry will drive tourism growth in 2023 for the Caribbean. Downside risks to the industry include persistently rising prices, the threat of prolonged recessions in key tourist markets, as well as fluctuations in the currency market.

Two of the most significant source markets, the US and UK, are projected to slow further in 2023, with GDP forecasted by the IMF to grow at 1% and 0.32% respectively. This projected low growth comes after a less than stellar performance throughout 2022. The US economy contracted by 1.6% and 0.6% for Q1 and Q2 2022 before recording growth of 3.2% in Q3 2022, while in the UK, growth has been moderating sharply, with current forecasts showing persistent economic contractions until Q4 2023.

For the Eastern Caribbean, travelers are primarily from the US (43.4% of all travelers in 2019) with a notable contribution from the UK (16.6% in 2019). The slowdown of the US and UK economies will likely impact tourism activity as a result. Given the significance of US in the Eastern Caribbean, fluctuations in the US dollar (USD) will greatly affect the tourism demand. The Eastern Caribbean Dollar (XCD) is fixed to the USD at a rate of XCD2.7 to USD1; given the fixed exchange rate, tourist demand would fall if there is a strengthening of the USD as the relative cost to tourists would be higher.  The USD is currently forecasted to strengthen in 2023 as the rate hikes by the US Federal Reserve continue to make the dollar an attractive asset, serving as a downside risk to tourism in the Eastern Caribbean. Tourism growth will vary slightly among countries within the region; St Vincent and the Grenadines, St Kitts and Nevis, as well as Antigua and Barbuda are expected to post the highest growth, largely in part to their recent removal of restrictions for travelers entering the country.

Jamaican tourist arrivals are forecasted to remain along its current trajectory, with the total number of arrivals improving with the return of the cruise industry. Jamaica operates a managed floating exchange rate regime, with the Bank of Jamaica gradually depreciating the value of the Jamaican dollar (JMD) in recent years to boost competitiveness of exports. This gradual depreciation of the JMD may be beneficial and can potentially improve tourism demand. Tourism is forecasted to return to pre-pandemic levels in Jamaica by mid-2023.

Barbados’s key tourist markets are the US and the UK, making up roughly 32% and 33% of all tourist arrivals in 2019. The projected slowdown of these economies in 2023 will negatively affect Barbados’ tourism sector. Similar to the Eastern Caribbean, Barbados operates a fixed exchange rate regime, at a rate of BBD2 to USD1. The forecasted strengthening of the USD will reduce the relative competitiveness of tourism in Barbados for tourists.

Notwithstanding the headwinds, the tourism industry is expected to continue along the path of recovery, supported by the complete removal of all pandemic restrictions as well as projected improvements in the cruise industry.

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Issue Brief

September 26, 2023

A roadmap for the Caribbean’s energy transition

By David Goldwyn, Eugene Tiah, and Wazim Mowla

Table of contents

Introduction Drivers of the Energy Transition and System Transformation What Does the Current Renewable Energy Landscape Look Like? Challenges to the Energy Transition How Can We Ensure that the Caribbean Region’s Energy Transition is Realistic? A Five-Step Roadmap to the Caribbean’s Energy- System Transformation Strengthening the Caribbean’s Energy Partnerships Around the World Conclusion

Working Group Members Acknowledgments About the Authors

Introduction

Caribbean countries are in desperate need of an energy transition 1 1 The Caribbean countries covered in this report include Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, and Trinidad and Tobago . Disproportionately high electricity costs impede economic development, stress public finance budgets, and harm the competitiveness of tourism and other industries. Power grids are undercapitalized and vulnerable to climate change and extreme weather events. The region’s small markets and its import-dependent economies are disadvantaged by volatile oil and gas prices, rising inflation, and supply-chain disruptions. And, because most Caribbean countries are categorized as middle- or lower-middle-income economies by the World Bank, access to concessional finance and attracting commercial investment in power generation and transmission are common challenges. Only the Southern Caribbean (e.g., Trinidad and Tobago, Guyana, and Suriname), routinely attracts significant levels of private investment due to rich fossil-fuel resources. All this paints a precarious scenario for the Caribbean. It needs to build competitive and resilient economies, which can only be done with access to affordable and reliable energy.

The Caribbean requires both an energy transition and an energy-system transformation away from its reliance on fossil fuels. Transitioning power generation and transportation from fossil fuels to higher shares of renewable energy and battery storage will address the region’s vulnerability to fossil-fuel price volatility and concerns about energy-system resilience. But regional energy systems must also be transformed. If energy systems (including electrical grids and utility structures) are not upgraded and modernized, most power grids will be unable to integrate significant renewable-energy projects and the region will remain unable to attract large-scale renewable projects. It will be important for the international community to recognize that the region’s dependence on fossil fuels will persist over the next decade as the transition takes place. Affordable access to lower-carbon fossil fuels, such as natural gas, will be needed to provide backup power generation, and to increase resilience to renewables’ variable nature and their vulnerability to climate change.

We propose a five-step roadmap that Caribbean countries, the business community, multilateral development banks (MDBs), regional institutions, and partner nations can undertake to transform the region’s energy systems and accelerate the energy transition. The roadmap includes: conducting energy modeling and analysis; modernizing energy grids; diversifying utility structures; creating “bankable” projects; and scaling project investment to national and subregional levels. The roadmap is expected to be a guide for the Caribbean and its partners, as some countries are further along in the transition than others, and overlap between steps will sometimes exist. For these transformations, we expect the initial cost of energy-sector investments to range from $5 billion to $7 billion 2 All dollar figures are in US dollars (USD) unless otherwise specified . With the twenty-eighth meeting of the Conference of the Parties (COP28) approaching, and the international community recognizing the need to assist countries vulnerable to climate change, the time is ripe for a commitment of international support for the Caribbean’s energy transformation 3 “COP28 President-Designate Tells CARICOM Heads of Government That the UAE Is Focused on Uniting Parties in a COP of Action, a COP for All, and a COP That Delivers for All,” Yahoo Finance, July 5, 2023, https://finance.yahoo.com/news/cop28-president-designate-tells-caricom-210200059.html. .

To date, the region’s energy transition has been slow and incremental. The small nature of Caribbean economies and energy grids results in smaller renewable-energy projects. Projects also come with high costs due to several political, regulatory, technical, and financial risks, as is detailed in later sections. Long-standing undercapitalization of utility systems limits Caribbean governments’ ability to meet renewable-energy targets and presents a challenge for leaders who cannot abandon existing structures for new, uncertain ones. The way forward for the energy transition needs to be creative and politically realistic, equitably serving government, private-sector, and citizen interests.

Given the urgency of the moment, in January 2023, the Caribbean Initiative at the Atlantic Council convened a Caribbean Energy Working Group (CEWG) to identify the main energy security challenges and to work with government officials, the private sector, and multilateral organizations to propose new and action-oriented recommendations that would facilitate a responsible and realistic energy transformation. CEWG members emphasize that a meaningful transformation of Caribbean energy systems is a necessary precondition to completing the energy transition. In 2023, members of the CEWG met virtually and in person five times to undertake a careful examination of the energy challenges and the drivers of transformation. In its findings, the CEWG outlines a series of steps that the United States and other global partners should consider, particularly with COP28 convening this year from November 30 to December 12.

This report identifies the main catalysts of the Caribbean’s energy transition and provides a short overview of the current landscape of renewable-energy production and capacity. Then, we detail the impediments to the region’s energy transition and explain how the five-step roadmap can be utilized. To buy time for the region, this report acknowledges the importance of resilience and reliability, including the unavoidable role natural gas can play as a transitional fuel. Finally, we highlight two technical and financing programs the United States—the Caribbean’s main global partner—and other partner nations can use to provide tools to the region to accomplish the roadmap’s steps.

Drivers of the energy transition and system transformation

Two main challenges are driving the need for a regional energy transition, especially for political leaders: the economic costs of climate change and dependence on imported petroleum products. As climate disasters increase in frequency, the prospect of lost power for days, or even weeks, will drive Caribbean political and business leaders to ensure that the region’s access to power generation is reliable. Today, that reliability comes from carbon-intensive fuels, posing a question for leaders about whether generation can alternatively come in the form of renewables, natural gas, or a combination of the two. However, the stronger factors driving the energy transition are the high cost of importing petroleum products and the effects this has on a country’s economic growth.

The climate crisis: Climate change is the existential driver of the energy transition in the Caribbean. Rising temperatures and sea levels are causing stronger tropical storms, drought, changing precipitation patterns, and ocean acidification. These climate-induced effects also pose a risk to the operations of governments and businesses, with blackouts or brownouts leaving people and institutions without electricity and power for days, or possibly weeks. This was most evident in Dominica, where Hurricane Maria destroyed 90 percent of government structures and left people without access to electricity, except for a few portable generators, for weeks 4 Michael Holmes and Dominique Van Heerdan, “Dominica Knocked to Its Knees by Hurricane Maria’s Might,” CNN, September 21, 2017, https://www.cnn.com/2017/09/20/world/hurricane-maria-dominica/index.html .

Effects on economies dependent on energy imports: Businesses and average Caribbean citizens are dependent on energy imports. As detailed in Figure 1, the Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE) noted that Caribbean Community (CARICOM) countries, on average, import an estimated 87 percent of their oil, compared to a global average of 21 percent. Meeting consistent domestic demand leaves the region vulnerable to global energy-price volatility, which results in high electricity costs for the region (except Trinidad and Tobago). As a result, consumers in some Eastern Caribbean countries, as of 2021, pay almost three times as much for energy as their counterparts in the United States, with citizens in Barbados paying $0.332 per kilowatt hour (kW/h) and those in Antigua and Barbuda paying $0.367 per kW/h, compared to $0.109 per kW/h in the United States 5 “The Price of Electricity per KWh in 230 Countries,” Cable.co.uk, last visited July 15, 2023, https://www.cable.co.uk/energy/worldwide-pricing/ .

This affects crucial economic sections in the Caribbean, such as the travel and tourism industry, which is a significant user of energy and is a main source of gross domestic product for many countries. Ten of the top twenty tourism-dependent economies globally are CARICOM members. 6 Henry Mooney and David Rosenblatt, “Regional Overview: The Fragile Path to Recovery,” Inter-American Development Bank, Caribbean Quarterly Bulletin 10, 2 (2021), 7–8, https://publications.iadb.org/publications/english/viewer/Caribbean-Quarterly-Bulletin-Volume-10-Issue-2-August-2021.pdf. Electricity and fuel, on average, make up between 10 percent and 20 percent of a small Caribbean hotel’s operating costs. 7 “Energy Conservation,” Caribbean Hotel and Tourism Association, last visited August 5, 2023, https://caribbeanhotelandtourism.com/downloads/CHTAEF_Energy.pdf. These costs and others, such as insurance premiums, increase after climate disasters, ultimately making the region less competitive vis-à-vis other tourism-based economies around the world.

An International Monetary Fund working paper notes that these high electricity costs—along with inefficiency across power sectors and generation—have eroded the region’s economic competitiveness over the past twenty years. 8 Arnold McIntyre, et al., “Caribbean Energy: Macro-Related Challenges,” International Monetary Fund, March 2016, 7–8, https://www.imf.org/external/pubs/ft/wp/2016/wp1653.pdf. Figure 2 shows varying levels of electricity demand among CARICOM countries. Large portions of demand are for residential usage, meaning that ordinary Caribbean citizens likely carry a significant part of the burden of high electricity costs, which depletes their purchasing power and savings. The result is that citizens are unable to purchase goods, and the owners of micro, small, and medium-sized enterprises are unable to finance new programs to scale their businesses.

What does the current renewable energy landscape look like?

The region’s geographic diversity and breadth, as well as its location, have primed it for an abundance of renewable-energy potential. Caribbean countries range from Guyana and Suriname in South America to Belize in Central America and The Bahamas off the coast of Florida. Being near the equator means there is high potential for solar-power penetration and wind resources. As Figure 3 shows, every country in the region has the potential to use solar photovoltaic (PV) and wind technologies—the two current most cost-effective clean-energy technologies on the market. Countries can also utilize technologies such as biomass gasification and biomass anaerobic digestion, but these options are not yet commercially viable at the scale of production in the region.

Strong ocean currents and volcanic formations in the Eastern Caribbean (Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines) might also bring other smaller-scale renewables into the energy equation. According to the CCREEE, these five countries have an estimated 6,290 megawatts (MW) of “available geothermal resources,” which is well above the region’s needs. 9 Devon Gardner, “The Caribbean Connection: High Level Breakfast Engagement on Regional Energy Security around the Margins of the 43rd Regular Meeting of the Conference of CARICOM Heads of Government Meeting,” Caribbean Centre for Renewable Energy & Energy Efficiency, July 5, 2022. Therefore, power generation from geothermal reserves can be a contender for baseload power to enhance grid stability, along with liquified natural gas (LNG) and battery-storage options. However, as seen in the five-step roadmap below, energy modeling and analysis are needed to determine and evaluate the proven availability and cost-effectiveness of employing these clean-energy technologies.

So far, installed renewable-energy capacities have been limited. Figure 4 shows that, as of 2019, the region’s renewable energy capacity is only at 11 percent of its total installed capacity. Some countries have fared better than others, with Belize at 48 percent and almost 100 MW of installed renewable capacity, and Suriname at 46 percent and 189 MW installed. In short, the CARICOM is falling short of its target of generating 48 percent of its electricity from renewables by 2027. The following section looks at the reasons behind this challenge. 10 Malaika Masson, David Ehrhardt, and Veronica Lizzio, “Sustainable Energy Paths for the Caribbean,” Inter-American Development Bank, 2020, https://publications.iadb.org/publications/english/viewer/Sustainable_Energy_Paths_for_the_Caribbean.pdf.

Challenges to the energy transition

Several hurdles stand in the way of the Caribbean energy transition, primarily due to existing energy systems that are not equipped to incorporate renewables. They range from small energy grids to limited options for affordable financing to technical-capacity issues. At the same time, even if an abundance of renewable-energy projects entered development today, there is no guarantee e that each would make it to the financial investment decision (FID)—i.e., the point of determining to proceed or halt a project—or, once a project is built, that it could be connected to the grid. The challenges are summarized below.

Small projects, high costs: Caribbean governments have relied on a project-by-project approach for renewable-energy development. However, the grid size in the region has been an impediment to this approach. Caribbean countries are small and isolated, and have limited viable space for utility-scale solar (large solar PV projects) or onshore wind farms—the size of projects that typically allow for economies of scale. As shown in Figure 4, the total installed energy capacity across the Caribbean varies, ranging from 27 MW in Dominica to more than 2000 MW in Trinidad and Tobago, and most islands’ energy grids with less than 250 MW. The value of scale on renewable-energy projects is a reduction in the cost per unit of energy generated. Project developers usually need projects that are sized at a minimum of 30 MW to secure lower energy costs. This is why the project-by-project approach disadvantages Caribbean countries, as projects are likely to be well below the 30-MW marker.

Further, projects are inherently more expensive in the Caribbean because of the lack of a local supply chain and the inability to procure at scale. The Caribbean is also vulnerable to climate-induced disasters and related damage to renewable-energy infrastructure. 11 Sapphire Vital, “An Unexpected Catalyst: How Hurricane Maria Is Still Changing the Energy Sector in Dominica,” Caribbean Centre for Renewable Energy & Energy Efficiency, 2020, https://www.ccreee.org/blog/an-unexpected-catalyst-how-hurricane-maria-is-still-changing-the-energy-sector-in-dominica/. This creates additional risks and uncertainties for businesses and individuals investing in renewable energy, as well as the need for climate-focused project designs and materials.

Technical capacity: A major obstacle faced by nearly every Caribbean nation is weak administrative capacity. The number of regulators and policymakers available to devise transformation plans and implement them is small. Although some countries, such as Jamaica and Barbados, have adopted frameworks for renewable-energy introduction, existing administrators are inexperienced in tariff setting and procurement. For the investor, this looks like slow decision-making and indecision, with many years’ wait for permits. For governments, technical-capacity limits result in an inability to choose between project proposals, set tariffs, or design auctions. The kind of assistance required varies by country, but many require an initial energy-system modeling and analysis to illustrate to ministries of finance and political leaders that a new system will be fiscally viable—and, therefore, politically acceptable—which comes later in the roadmap.

Project development: While many investors seek to develop renewable-energy projects, there is a traditional valley of death between initial project development and financing. These initial project costs of prefeasibility and feasibility studies, environmental assessments, production of design drawings, and other elements necessary to achieve financing lead to delays, often measured in years, which obstruct creation of a project pipeline. Even if concessional financing and equity support can be delivered, there must be a viable project pipeline to finance. Many governments have assistance in this space, but nearly all of it is tied to domestic content. This creates a complex environment for investors, who must deal with multiple bureaucracies. Better donor coordination—or, better yet, a more flexible project-development mechanism—could dramatically accelerate creation of a project pipeline. This is covered in step four of our roadmap.

Project finance : Most commercial renewable-energy projects have been funded through project finance— a project loan backed by the cash flow of the specific project. The predictable nature of cash flows from a renewable-energy project means they are highly suited to this type of investment mechanism. The financing of a project requires careful considerations of all its different aspects, as well as the associated legal and commercial arrangements. Before investment, any project-finance lender will want to know if there is any risk that repayment will not be made over the loan term. Mitigating these risks and creating “bankable” projects are discussed in step four of the roadmap.

Existing utility constraints: There is a mix of state and private ownership of Caribbean utilities (see Figure 5). State-controlled utilities are responsible for providing reliable power, and tax revenues generated from fuel importation are often used to fund schools and critical public services. Many utilities signed long-term contracts for electricity supply before renewable-energy alternatives were viable or national targets were set. Therefore, these contracts are binding until the end of their terms and, if the utility does not see any economic benefits to introducing renewables, they present a significant barrier for governments. Even when the capital cost of introducing a new generation of technology can be managed, a utility must finance the cost of the technology while maintaining reliable supply. This means that while there are savings from reducing fuel purchases and incorporating renewables into the grid, they do not outweigh the cost of acquiring new technology generation and the accompanied transmission to allow for the increased power load. Simply put, cleaner energy does not mean cheaper energy for the consumer, and that is a serious political challenge that countries need help in addressing.

Most utilities in the Caribbean also have top-down, vertically integrated structures: i.e., a single company owns and operates all aspects of the electric power system, including generation, transmission, and distribution. This means that the utility company (and, in some cases, the government itself) owns the power plants, the transmission lines, and the distribution network that delivers electricity to consumers. Some of the drawbacks to this model include limited innovation and lack of competition and customer choice, which all drive high costs for consumers.

It is easy to criticize utilities for their reluctance to adopt new technologies or their resistance to competition, but they must fulfill their obligations to provide reliable power while potentially facing resistance from governments regarding the potential loss of tax revenue from customers for higher tariffs, or from stakeholders because of the risk to existing revenue streams. The energy transition requires a new business model for utilities, but the challenges of cost and risk must also be addressed. Step three of the roadmap tackles this challenge.

How can we ensure that the Caribbean region’s energy transition is realistic?

Achieving 100-percent power generation from renewable energy is not reliable or realistic in the short to medium term. Solar and wind power are variable sources, as the sun does not always shine, and wind speeds vary on a day-to-day basis. Most power generation using renewable energy requires a complex and modernized grid system, and one that will heavily rely on battery storage. Right now, a transition to strictly renewables, even if it were financially possible, would only exacerbate the vulnerabilities facing Caribbean governments and consumers. Energy systems, therefore, require a hybrid model: the ability to take on clean energy while also incorporating low-carbon fossil fuels, such as natural gas, to substitute for bunker fuel and diesel as the building blocks for the region’s energy transition.

Utilities that are considering substituting diesel for natural gas can only do so if affordable natural-gas supply is available. Natural gas is priced globally, and the cost of transportation and liquefaction are usually added, making volatile LNG prices historically risky for import-dependent Caribbean countries. However, the region itself has underutilized export capacity that can service power systems during the energy transition. Jamaica currently sources LNG from Trinidad and Tobago and the United States to satisfy its domestic energy demand, meaning this is a potential option for other Caribbean countries. Few Caribbean countries can import and re-gasify natural gas, but modern technology is reducing the cost of entry thanks to power systems that can incorporate floating storage and regasification units with either a pipeline to shore or shipments of small containers.

Over the long term, Guyana and Suriname, along with Trinidad and Tobago, might be able to provide the necessary supply to the region—but, in the short term, the United States can play a vital role. The United States is the largest supplier of LNG to the Caribbean. The National Gas Company of Trinidad and Tobago is currently evaluating the possibility of developing small-scale LNG (ssLNG) infrastructure (i.e., liquefaction and regasification) that can service regional demand, where reexports from the US Gulf Coast can be an option. Natural gas is an important source of energy supply, with lower carbon than kerosene and bunker fuel, and has a role to play in the Caribbean’s energy transition. If this occurs, a hybrid approach that combines natural gas used for baseload and backup power with renewables can be successful, as it has in other parts of the world, notably Mexico and California. To the extent that overtime battery-storage technology improves sufficiently to meet the resilience needs of small islands, ssLNG can be transitional and phased out over time.

In 2021, General Electric deployed four gas turbines in California as part of the state’s plans to provide reliable power to its energy grid to address concerns about extreme weather conditions and renewable sources being unable to meet peak demand. 12 Darrell Proctor, “GE Gas Turbines Installed to Support California Power Supply,” Power Magazine , October 6, 2021, https://www.powermag.com/ge-gas-turbines-installed-to-support-california-power-supply/. Frequent droughts and seasonal wildfires have limited the hydropower sources California uses to power its grid. The use of the four gas turbines creates greater diversity on the grid, making electricity access more reliable. Further, grid operators’ ability to switch between gas and renewable sources also helps manage consumer costs. Similarly, Mexico is relying on a mix of gas turbines and renewable power to meet its growing electricity demand and to provide power to citizens after natural disasters. In 2017, two gas turbines were installed in Sinaloa, where consumption is expected to skyrocket in the next twenty-five years. 13 “GE to Supply Two Super-efficient Gas Turbines for Mexican Power Plant,” MexicoNow, June 21, 2017, https://mexico-now.com/ge-to-supply-two-super-efficient-gas-turbines-for-mexican-power-plant/. This model provides transitional power that can be phased out over time and can be an ideal resilience solution for many Caribbean countries.

A five-step roadmap to the Caribbean’s energy-system transformation  

An energy transition in the Caribbean is challenging without a transformation of its energy systems. A competitive energy system for these countries needs to provide reliable, affordable, and resilient power to businesses and citizens. Therefore, we propose a five-step approach that, if undertaken, will make the energy transition easier and cost effective without putting financial strain on Caribbean consumers. These steps (detailed below) are not expected to occur in a silo, but together, with some likely overlap across steps. Further, Caribbean countries are in different stages of their energy transition and some, such as Jamaica, Barbados, and Belize, will be further along in the five-step process than others. Steps one, two, and three are the foundation-setting aspects of the roadmap, and steps four and five focus on implementation.

There is an expected initial investment of between $3 billion and $5 billion based on International Monetary Fund (IMF) projections from 2016. Across the region, the estimated breakdown (adjusted for inflation since 2016, making the initial investment $5 billion to $7 billion now) includes $1.7 billion to build and upgrade power plants and $455 million in energy efficiency and conservation initiatives (both covered in step one); $1.8 billion to introduce new natural-gas facilities (covered above); and $1.2 billion in renewable-energy investments (covered in steps four and five). 14 McIntyre, et al., “Caribbean Energy: Macro-related Challenges.”

Step 1 (starting from year one): The first step is to conduct national- and regional-level energy modeling and analysis. Using software, Caribbean governments, the CCREEE, MDBs, and partner nations should evaluate each country’s energy system and its various components, including supply, demand, storage, transport, and available technologies. The modeling helps identify a cost-effective and renewable energy-system plan that is best suited to each country. Caribbean nations’ energy systems must be modeled to determine the right options for decarbonization, cost effectiveness, reliability, and resilience. Some countries—such as Jamaica, Saint Lucia, Barbados, Suriname, and Trinidad and Tobago—have already prepared Integrated Resource & Resilience Plans (IRRPs), a form of energy modeling for the electricity sector. However, these IRRPs do not take into account demand-side management, storage options, and other energy usage such as transportation. Hence, a holistic energy model, which can occur from a six- to twelve-month period, should be built to incorporate all energy inputs, which will provide the necessary data to allow for a transition to a modern, low-carbon energy system.

Energy modeling will also help Caribbean countries increase their energy efficiency—a crucial step for decarbonizing their economies. An Inter-American Development Bank (IDB) report shows that Caribbean countries have a higher average energy intensity than their counterparts in Latin America, and investing in their energy efficiency can net $6.1 billion in economic benefits over twenty years. 15 Masson, et al., “Sustainable Energy Paths.” Measures can include using LED lighting, data-center efficiency, and daylighting controls, among others. 16 Ibid.

Step 2 (ranging from years two to five): As step one is completed, step two focuses on the transition to a modernized grid and moving toward distributed generation. This transition is a transformation from a monolithic grid, which is stagnant and has limited flexibility, to one that is modular and agile. Centralized power generation is characterized by decisions driven by affordability and reliability, but this leaves out a variety of factors that lead to more cost-efficient generation, cost externalities, and the preference of local communities. Distributed generation, along with intelligent load control, is driven by cost and environmental sustainability, personalized energy options, and security. In the Caribbean, a modernized grid is one that needs six attributes, including

• resilience after climate-related disasters; • reliability to decrease power outages; • security for energy infrastructure; • affordability to protect against high costs for consumers; • flexibility to adjust to weather patterns; and • sustainability to onboard broader clean energy and energy-efficiency methods.

At the same time, given the climate-induced challenges facing the Caribbean, a resilience-based approach is necessary for the region’s energy transformation and transition. The frequency of tropical storms and changes in weather patterns means that decentralized power generation effectively becomes a form of climate adaptation. In centralized grids, strong storms that damage energy infrastructure can cause country-wide blackouts. In the aftermath of climate-induced natural disasters, using micro grids means that power lost on one side of an island does not necessarily affect the other side. Further, battery storage is essential to creating more reliability when using intermittent, renewable sources.

Step 3 (ranging from years two to five): Once energy modeling is complete, along with a transition to a modernized grid, step three requires diversifying state-owned utilities and top-down vertically integrated systems. As already discussed, one challenge facing the Caribbean’s energy transformation and eventual transition is the vertical integration of utility structures in most countries in the region, except for Jamaica and Trinidad and Tobago. These countries have divested some of their generation assets and have contracted capacity from independent power producers (IPPs), which allow for competition in power generation, reducing costs and improving quality of service and reliability. Partner nations and MDBs should work with Caribbean governments, utilities, and regional groups to foster this model, but the varying nature of utility ownership and power-system diversification requires different strategies.

• For vertically integrated utilities, governments need support to incorporate IPPs into the system. • For those that have IPPs, governments need support moving toward corporate or self-generation power purchase agreements (PPAs). • For utilities with very small grids, governments require support to implement feed-in tariffs (to encourage investment), net metering, or net billing solutions.

Step 4 (earliest start in year two): De-risking and delivering “bankable” projects is step four in the roadmap. The first three steps are focused on ensuring that developers, governments, and MDBs are creating the right environment for new renewable-energy projects. But, even with the right environment or a strong foundation, if projects are not bankable—meaning that investors and developers see a likely financial return on a project—the energy transition will stall. Many of the risks that deter project finance are discussed in this report, so step four focuses on how to create a bankable project.

Most renewable projects are financed on a project-finance basis (in which lenders absorb the risk of the project itself). Then a special-purpose vehicle (SPV) is created for the project and funds are injected, or a loan is secured based on the fundamentals of the project, meaning whether investors can generate sufficient revenues to service debts and pay requisite returns on equity. When considering a project, lenders prepare a risk-return analysis to assess these traits along with major risks that can negatively impact the project, leading them to determine the project’s bankability. Therefore, for a project to be bankable in the Caribbean, certain protections for lenders are needed. Some of these protections might include:

• Feasibility studies that underpin the success of the project. • A solid offtaker that is in a comfortable liquidity position and has creditworthiness. • Adequate insurance coverage over the assets, loss of income, contractor risks, property damage, and business interruptions. • Long-term PPAs which have components, such as take-or-pay arrangements, competitive prices in markets, and fixed tariff per kWh. • Environmental social and impact assessments. • Equity injection from developers and borrowers that is between 20 percent and 40 percent. • Secure site and site access.

Once a bankable project is created, MDBs would then seek to provide financing to sponsors or developers to build new renewable-energy projects. A combination of project financing, technical assistance, and other donor funding, such as blended finance, can help move projects through the “valley of death” by providing needed financing that help projects reach the financial investment decision. To help projects successfully reach the FID, governments should create an enabling environment that allows projects to flow and reach maturity. In this case, MDBs can issue contingent recoverable grants (CRG) to governments to support project development (such as creating appropriate legal frameworks and designing permitting and auction processes), which can then become a concessional loan once projects reach FID and revenue streams can be forecasted. An example currently in use is the Caribbean Development Bank’s GeoSmart Initiative, which provides grants to governments in the Eastern Caribbean to support early-stage and exploratory drilling to support future geothermal project development. 17 “CDB GeoSmart Initiative: Supporting Geothermal Development in the Eastern Caribbean,” Caribbean Development Bank, last visited August 14, 2023, https://www.caribank.org/sites/default/files/publication-resources/GeoSmart%20Initiative.pdf. These grants can be expanded and extended from MDBs, such as the Inter-American Development Bank and the World Bank.

Step 5 (ranging from years three to ten, but only after at least step one has been completed): The fifth and final step in the roadmap is scaling from a project-by-project approach to national, and potentially subregion, levels. A series of small projects is neither attractive to developers nor helpful to Caribbean countries in reaching their national renewable-energy targets. This method has proven to be infeasible and cost inefficient for potential developers, especially for sourcing projects across the Eastern Caribbean. Moving beyond a project-by-project approach means scaling investment and regulatory frameworks to a national level, which can further encourage the entry of potential developers. Scaling to national levels has benefits across the region. Changes in regulations that encourage investment in renewables can become best practices for other countries with similar-sized economies and renewable-energy potential. Simply put, it ensures that governments do not need to “reinvent the wheel” when they can instead build on lessons learned from their Caribbean neighbors. Examples of national-level investment models already exist and have been successful in other countries, such as Argentina.

During a severe financial crisis, Argentina created the RenovAr program, which led to more than $7.5 billion in investment in renewable energy between 2016 and 2019. 18 Silvio Marcacci, “Argentina May Be the Hottest Renewable Energy Market You Haven’t Heard Of. Can It Spur a Global Boom?” Forbes , October 15, 2019, https://www.forbes.com/sites/energyinnovation/2019/10/15/argentina-may-be-the-hottest-renewable-energy-market-you-havent-heard-of-can-it-spur-a-global-boom/. An internationally competitive investment framework that was supported by risk mitigation and technical support produced remarkable and lasting results. The key factor was the political support of the government, which was willing to take on the risk of using a new framework, based on the expectation that it would produce positive results. While not a perfect analogue, the model of comprehensive reform can be adapted for the Caribbean and is slowly taking shape in Jamaica.

Securing national buy-in for renewable energy projects in Jamaica In April 2023, Greenmap (now called Renewables for All, or RELP) and the Generation Procurement Entity of Jamaica (GPE) agreed to work together to design a procurement program for renewable-energy projects. 19 “Greenmap and the Government of Jamaica Work Together to Scale Up Renewables in the Country,” Greenmap, press release, May 22, 2023, https://www.energygreenmap.org/news/20230522-jamaica. With Greenmap’s advisement, Jamaica announced an expression of interest (EOI) and is expected to launch a public auction for renewable projects of up to 268 MW of electricity generation from renewable energy; the aim is to help the country attract concessional financing from multilateral development banks. Following the announcement, and as an example of government buy-in, Jamaica amended its Electricity Act of 2015 to signal that it would replace almost 172 MW of power-generating plants with renewable sources. The RELP-Jamaica example is not exactly similar to the model in Argentina. But it shows that when national governments are brought into the process and there is sufficient political will, accelerating and reaching renewable-energy targets is much easier. This government backing for the initiative should, in turn, help with overhauling policy and regulation to reduce risks and make the introduction of renewables more feasible—adding to project bankability and reinforcing step four.

Strengthening the Caribbean’s energy partnerships around the world

As discussed, a Caribbean energy transition requires a five-step roadmap. Partner nations should utilize the roadmap to support a transformation of Caribbean energy systems so that, in the short term, they are able to provide reliable, affordable, and resilient power to consumers and, in the long term, grids are modernized to incorporate renewable energy. Here, strong partners of the Caribbean—such as the United States, the United Kingdom (UK), Canada, the United Arab Emirates (UAE), and others—can play a role in mobilizing international support. In support of the five-step roadmap, we propose two programs that partner nations can create independently, as a multilateral effort, or in tandem with other donors.

Caribbean program for energy system transformation (CPET): The US government, for example, can leverage the expertise of the US Agency for International Development (USAID), the US Trade and Development Agency (USTDA), and the US Department of Energy (DOE) to work with third-party contractors, primarily those in the Caribbean, to

• conduct energy-system analysis and modeling to identify the type and scale of renewable energy needed per country; • use modeling outcomes to promote decentralized power generation; and • provide technical assistance to governments and existing utilities on best practices for introducing IPPs, negotiating corporate power-purchase agreements, and designing distributed generation-compensation mechanisms.

Each objective is fundamental to enabling the region’s energy transition. USAID can provide a mix of grants and financing to institutions, such as the CCREEE and the Organization of Eastern Caribbean States (OECS), to perform energy modeling. The USTDA can provide financing for technical assistance to use the energy modeling to help countries decentralize their grids. The DOE can work with Caribbean governments, the Caribbean Electric Utility Services Corporation (CARILEC), and the private sector to support diversifying vertically integrated utility structures.

Caribbean project financing, equity, and development support program (CFED program): Partner nations should work with Caribbean countries, multilateral development banks, and other donors to create a two-tiered financing and equity support program for potential developers, to help projects move through the development pipeline and then receive affordable financing after FID is reached. One example would be increasing the existing pool of resources of IDB Invest, the private-sector arm of the IDB Group, to provide upfront equity support to get projects started.

As part of the COP28 process, the United States should first make a concerted effort to rally and mobilize donor countries, including Canada, the UK, China, the UAE, and the European Union to provide the needed mix of grants and concessional loans to increase resources across IDB Invest, the Caribbean Development Bank (CDB), and the OECS to help with equity support. Further, as projects reach the FID, the United States should also mobilize donor countries to help create a new concessional-finance facility or help expand the scope of the newly launched Blue Green Investment Corporation to be directed toward energy transformation and the transition to green energy. To increase investor confidence, and to demonstrate that the international community seeks to finance an initial cost of $5 billion to $7 billion in direct costs (which accounts for inflation since 2016) for energy system transformation across the Caribbean, the facility should incorporate the support of the IDB, the Caribbean Development Bank (CDB), and the World Bank. However, to ensure that the facility can meet the needs of specific Caribbean countries, it should be controlled by the CDB, the region’s premier indigenous financial institution.

The Caribbean’s energy transition grows more urgent each day. The high cost of imported petroleum products stresses regional economies and is becoming more and more challenging, particularly as the war in Ukraine and Organization of Petroleum-Exporting Countries (OPEC) oil-production cuts keep energy prices high. As explained, an energy transition in the Caribbean is complex, requiring an overhaul of the energy system before large-scale renewable energies can be connected to energy grids. This paper’s five-step roadmap is designed to ensure that the region’s future energy systems are reliable, affordable, and resilient to the effects of climate change and exogenous economic shocks, and can underpin economic growth across the region. The investments to implement this kind of energy transition are modest by international standards. As the world takes stock of its progress (or lack thereof) on the path to 2050, while prioritizing countries most vulnerable to climate change, now is the moment for the international community to support the Caribbean’s energy transformation. This report provides a potential pathway to do so.

Working Group Members

David Goldwyn (Co-chair & steering committee) Chairman Global Energy Center’s Energy Advisory Group Atlantic Council

Eugene Tiah (co-chair & steering committee) Former Executive Chair, Energy & Industrial Gases Business Unit MASSY Energy

Mark Loquan (steering committee) President National Gas Company of Trinidad and Tobago

Gary Jackson (steering committee) Executive Director Caribbean Centre for Renewable Energy & Energy Efficiency

Cletus Bertin Executive Director Caribbean Electric Utility Services Corporation

Daniel Best Former Director of Projects Caribbean Development Bank

Thackwray “Dax” Driver President and CEO Energy Chamber of Trinidad and Tobago

Chamberlain Emmanuel Head of Environmental Sustainability Cluster Organization of Eastern Caribbean States

Devon Gardner Head and Technical Programmes Caribbean Centre for Renewable Energy & Energy Efficiency

Marcelino Madrigal Chief, Energy Division Inter-American Development Bank

Juan Cruz Monticelli Section Chief, Executive Secretariat for Integral Development Organization of American States

Dale Ramlakhan Chairman, Energy Efficiency and Alternative Energy Committee Energy Chamber of Trinidad and Tobago

Charlyne Smith Senior Nuclear Energy Analyst Breakthrough Institute

Alicia Taylor Investment Management Lead Officer, infrastructure & Energy IDB Invest

Frédéric Verdol Senior Power Engineer World Bank

Fernando Zuniga Managing Director, Latin America and the Caribbean MPC Energy Solutions

Acknowledgments

The Atlantic Council thanks board member Melanie Chen, who provided the vision and resources to start the Caribbean Initiative, for her financial support of this publication and the corresponding working group. We also thank the Caribbean Energy Working Group members who joined numerous one-on-one consultations that informed this publication, including members who provided relevant data and supported the drafting process, such as Dale Ramlakhan, Mark Loquan, and Alicia Taylor. A special thank you to Jason Marczak, senior director of the Atlantic Council’s Adrienne Arsht Latin America Center which houses the Caribbean Initiative, for his guidance and comments throughout the working group and during the drafting of this publication. Charlene Aguilera managed the production flow of the issue brief and provided important support in its launch.

About the author s

Wazim Mowla

Associate Director & Fellow, Caribbean Initiative

Adrienne Arsht Latin America Center

David L. Goldwyn

Nonresident Senior Fellow

Adrienne Arsht Latin America Center Global Energy Center

David Goldwyn is president of Goldwyn Global Strategies, LLC (GGS), an international energy advisory consultancy, and chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group. He is a globally recognized thought leader, educator, and policy innovator in energy security and extractive-industry transparency.

Eugene Tiah is a senior business executive with in-depth knowledge and more than forty years of experience in the oil and gas business within the United States and the Caribbean region. He presently provides consultancy services to both public and private sectors.

Wazim Mowla is the associate director of the Caribbean Initiative at the Adrienne Arsht Latin America Center. He leads the development and execution of the initiative’s programming, including the Financial Inclusion Task Force, the US-Caribbean Consultative Group, the PACC 2030 Working Group, and the Caribbean Energy Working Group.

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Curaçao hunts for sustainability in the caribbean—and a lionfish or two.

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Lisette Keus of Lionfish Caribbean, a business that turns invasive lionfish into jewelry.

Lisette Keus is on the hunt.

The shallow waters next to the Curaçao Marriott Beach Resort are teeming with invasive lionfish, and Keus, an accomplished lionfish hunter, knows where they are hiding.

"They're not easy to find," says Keus, who runs a business called Lionfish Caribbean , which turns these unwanted predators into jewelry. "But with some practice, you develop a sense of focus — and then you see them."

And she does. There's one under a rock, its spine moving back and forth in the current. Keus calmly grips her Hawaiian sling spear, aims, and takes the shot.

Keus is part of this Caribbean island's sustainability efforts. Hotels on Curaçao are doing everything from reef cleanup to next-level conservation initiatives to preserve the fragile Caribbean ecosystem. Even Fabien Cousteau, grandson of famed explorer Jacques Cousteau, is about to become a player in this island's sustainability landscape.

"People here are starting to understand that we should leave the Earth better than we found it, which is I think the essence of sustainability," says Manfred van Veghel, director of the Caribbean Research and Management of Biodiversity , a nonprofit foundation that conducts environmental research in Curaçao. "We can't just push everything on the next generation."

This is part four in a series about sustainable tourism in Central America and the Caribbean. Here's part one about sustainability in Panama , part two about saving Bonaire's number one tourist attraction and part three about Aruba’s struggles to stay sustainable .

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Cufflinks made by Lionfish Jewelry in Curaçao. The island is trying to maintain balance on its ... [+] fragile coral reefs by hunting lionfish.

Turning predators into pendants in Curaçao

Back on the reef, Keus releases the elastic band on her spear. The three razor-sharp prongs pierce the fist-size lionfish, killing it instantly. But its long spines continue to undulate gently in the current, making it appear to be alive. Keus slides the fish into a cylindrical plastic container called a ZooKeeper, specially built to contain the venomous lionfish.

Keus will bag another lionfish before her hunt ends and will bring them back to a picnic table at her dive shop. Nothing goes to waste. She turns the fins into necklaces, cufflinks and pendants to sell at her jewelry shop in Willemstad. And the rest of the Lionfish belongs to the dive shop's resident cat, Cesa.

"I have a tremendous amount of respect for the lionfish," she says. "We have to hunt them. But we can also make the most of what we catch."

Why is hunting lionfish necessary for sustainability? Lionfish are not native to the Caribbean, and they excel at reproducing. Females release 50,000 eggs every three days.

That's right; every three days. Today, they are spreading through the Caribbean waters unchecked.

Lionfish are excellent hunters themselves and clear the reef of many native fish. They can eat a fish up to half the length of their body, including grouper, parrotfish and snapper. The only way to control the lionfish population is to hunt them, and the best way to hunt them is by strapping on a scuba tank, grabbing a spear, and descending to a depth of about 60 feet, where they hide under coral and rocks.

Dan Waters, general manager of Sandals Royal Curaçao, with plastic collected during an Earth Day ... [+] event at the resort.

A sprawling sustainability program at Sandals

On the other side of the island, at the Sandals Royal Curaçao , a different kind of sustainability program is unfolding. The two-year-old property is coming at the sustainability problem from every angle, including recycling, conservation and community outreach.

"We're still in the early stages," says Dan Waters, the hotel's general manager.

He's being modest. The Sandals hotel chain has a long-standing conservation program that helps the resort save and recycle water, electricity and food. At the moment, Waters is standing in front of several bags of recycled bottles, which his staff collected as part of an Earth Day event at the all-inclusive property. There's also the Sandals Foundation , the nonprofit arm of the company, that funds a variety of community projects.

Waters says Sandals guests want to do good. Many of them visit Curaçao schools during their vacation and read to students as part of the Sandals Foundation outreach. The company has also donated equipment to a local recycling business that is turning plastic trash into souvenirs.

Mitchell Lammering, co-owner of Limpi Recycling, holds a soccer goal post made from recycled ... [+] plastic, while co-owner Debrah Nijdam holds shredded plastic used to make the equipment.

Limpi Recycling is a new business that creates keychains, decorative art and soccer goalposts out of plastics that would otherwise harm the environment. Debrah Nijdam, co-owner of Limpi, says the company sources the plastic from the usual places — thrown away containers from trash and recycling bins. But they also get them from one place that others might not.

Limpi sponsors beach cleanups where volunteers visit the north end of the island. That's where strong currents regularly deposit trash from the ocean. Nijdam estimates that they collect about 100 kilos of plastic per month. Then they return to their workshop, where they shred the plastic, melt it down, and then create new products.

"We started as a project just to create awareness around the plastic waste problem," says Nijdam. "We wanted to show people that plastic is not trash. It's something valuable that you can reuse and recycle to make something new."

Limpi is on to something. Ask anyone in Curaçao and they'll tell you recycling is the number-one sustainability issue. Hunting lionfish is sexy, but to quote The Graduate , the future can be summed up in one word: plastics.

Gary Farstad, general manager of the Curaçao Marriott Beach Resort, with art made from recycled ... [+] plastics. You'll find this starfish in guest rooms, where it increases awareness of the island's sustainability challenges.

Marriott saves Curaçao one recycled plastic starfish at a time

One of the hotels that's all-in on Limpi's recycled plastics is the Curaçao Marriott Beach Resort.

"We give recycled keychains and luggage tags to our guests," says Gary Farstad, the property's general manager.

Limpi also worked on a big project for the Marriott to create decorative fish made entirely from beach-collected plastics on the island's north shore. Farstad says these decorations are particularly meaningful to visitors who are looking for something to bring home as a keepsake.

"People have been cleaning that area for years, and finally, someone got the bright idea of turning it into something," he says. "And our guests love doing something good for the environment."

How did the Marriott get on board with sustainability? Farstad came to this property from Saskatoon, Canada, where he worked closely with the Dakota Nation to incorporate indigenous art into the design of a resort he managed in Whitecap. He says the end result was a hotel that meant as much to the indigenous people who lived there as to the guests. He worked with the tribe to create a more sustainable hotel that collected and recycled rainwater.

"For me," he adds, "it was a totally different perspective."

Farstad hoped to bring the lessons he learned to the Marriott in Curaçao and ultimately connect it to the community. That type of involvement is one of the pillars of sustainability. And it's a path other resorts are also following.

Solar panels on the roof of LionsDive Beach Resort Curaçao. The hotel has made sustainability part ... [+] of its employee evaluation process.

How LionsDive built sustainability into its resort

The most forward-looking hotels know that unless they have a buy-in from their guests, sustainability efforts will fall flat. But what about employees? At LionsDive Beach Resort Curaçao, a small property that specializes in diving and family vacations, general manager Mimi Luttge has found a way to nudge sustainability forward by encouraging housekeepers, bellmen and diving instructors to come up with a way to move it to the next level.

"We've made sustainability part of our employee evaluation process," she says. That means every employee review includes a sustainability component. It evaluates workers based on their ideas on how to improve recycling and add renewable energy to the 35-year-old hotel.

"Our employees have ideas — everything from beach cleanups to animal rescue — and we've decided to work with a number of charities on the island. And when we ask for volunteers, there are always people standing up saying, 'Hey, I want to help,'" she says.

Luttge says it's also led to a deep and meaningful conversation about what the hotel can do to reduce its carbon footprint and promote sustainability in resource-strapped Curaçao. She's taken some of those ideas to the Curaçao Hospitality and Tourism Association , an island hospitality trade group that she leads.

Divers survey the reef on the site of the new Proteus underwater lab.

Coming next: an underwater lab in Curaçao

All of these projects are adding to Curaçao's environmental credentials. But what may put it over the top is set to arrive soon. It's a new underwater lab called Proteus , dubbed the International Space Station of the Ocean. The project, helmed by environmental advocate Fabien Cousteau, is a modular underwater habitat that will be used for marine research and exploration. It's scheduled for deployment off the coast of Curaçao in 2027.

Proteus could put this island on the map as a model for sustainability, and not just because of the Cousteau pedigree. The lab's goal of researching the most pressing issues Earth faces is certain to put it into the middle of an ongoing debate about sustainability. Of course, the hotels on the islands are eager to help. Already, Sandals has offered to ferry volunteers to Proteus in its dive boat.

Curaçao is home to one of the few remaining Caribbean reefs that is still growing, says Lisa Marrocchino, CEO of Proteus Ocean Group.

"Our scientists have already installed a suite of sensors to capture variables ranging from temperature to water quality to the acoustic environment," she told me. "The goal is to build an extensive network that will inform conservation approaches to benefit Curaçao's coral reefs."

There is, of course, the necessary reality check: The typical visitor to Curaçao really just wants to hang out at the beach with a drink. Will any of these sustainability efforts make a difference? The truth is, people on Curaçao want to be good stewards of their island, but they don't want it to cost too much, and they don't want to lose business.

Travel to Curaçao is booming, and no one wants to do anything to jeopardize it. An environmental message that's too forceful might be a turnoff to tourists. But not trying to be green isn't an option either.

The tourism industry on this island walks a fine line, as they do in the rest of the Caribbean.

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An Oklahoma tourist says he faces 12 years in prison in the Caribbean after he mistakenly left 4 bullets from a hunting trip in his carry-on duffel bag

• Ryan Watson was on vacation when he was charged with illegally carrying ammo into Turks and Caicos.
• He and his wife, Valerie, say the four bullets in their duffel bag were unknowingly left there from a hunting trip.
• Watson now faces 12 years in prison, alongside several US tourists charged for similar offenses.

An Oklahoma man traveling with his wife in the Caribbean territory of Turks and Caicos faces 12 years in prison after four rounds of ammunition were found in his luggage.

Ryan and Valerie Watson arrived in Turks and Caicos earlier this month to celebrate his 40th birthday with several other couples, their families said in a GoFundMe. NBC Boston reported that the Watsons arrived on April 7.

But the pair, who have two young children, were arrested in the self-governed British territory after airport security found the four bullets in their carry-on duffel bag.

Their families' GoFundMe said the ammo had been left in the bag unintentionally, and was from a prior deer hunting trip.

"They were hunting ammunition rounds that I use for white-tailed deer, and I recognized them, and I thought: 'Oh, what a mistake.' I had no idea that they were in there," Ryan Watson told NBC News.

Valerie Watson was released from the charges on Tuesday and flew back to Oklahoma to reunite with her children.

But her husband remains in Turks and Caicos, and was granted $15,000 bail the day after by the local supreme court, according to a police statement.

He now faces 12 years in prison, which is the minimum custodial sentence for bringing firearms or ammunition into Turks and Caicos.

Ryan Watson must stay on the islands and report twice a week to a local police station while waiting for his hearing, which is set for June 7.

Meanwhile, his family is trying to raise $300,000 for his legal fees and housing in the Caribbean.

"Isolated from their family, friends, and children, they face mounting legal fees, living expenses, and the overwhelming stress of their situation," their GoFundMe reads. "The emotional and financial toll is immense, and they are at risk of losing everything."

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"We were trying to pack board shorts and flip flops," Valerie Watson told CBS News . "Packing ammunition was not at all our intent."

The Watsons did not immediately respond to a request for comment sent outside regular business hours by Business Insider through their GoFundMe.

Eight US tourists prosecuted since February

It is illegal to bring firearms or ammunition into Turks and Caicos, and penalties apply regardless of the offender's status or country of origin, according to the local attorney general's chambers.

Several tourists caught under this law were previously let off with just a fine, while at least one was given a prison sentence under the minimum limit.

But in February, a court of appeal ordered that all offenders be given at least the minimum sentence of 12 years in prison.

At least eight tourists from the US have since been prosecuted under this rule, per the attorney general's chambers.

Another American tourist, 31-year-old Tyler Wenrich , was charged on Tuesday with possessing ammunition after he arrived in Turks and Caicos on a cruise ship, according to local police.

"While going through a security checkpoint, it was discovered Mr Wenrich allegedly had ammunition in his possession," a police statement said.

Amid the recent spate of tourist arrests, the US State Department published a September advisory warning US citizens that it wouldn't be able to secure their release if they brought firearms and ammo into Turks and Caicos.

"We strongly encourage you to carefully check your luggage for stray ammunition or forgotten weapons before departing for TCI," the advisory said.

The US State Department did not immediately respond to a request for comment sent outside regular business hours by Business Insider.

Tourism is a key revenue for Turks and Caicos, and in 2019 provided about $787 million, or 65% of the island's GDP, to the territory, per a 2023 report by the Commonwealth Chamber of Commerce.

The Caribbean archipelago is a popular port of call for US cruise ships, and this year has seen a 127% jump in tourist arrivals — the largest increase in the world — compared to 2019, the United Nations World Tourism Organization said in February.

Watch: VIDEO: Matthew McConaughey makes an emotional plea for more gun control

• Main content

World News in Brief: Support for Haiti mission, challenge of ‘commodity dependence’, Iran's 'strict' hijab law

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Following the installation of a transitional council in Haiti, seven countries officially notified the UN Secretary-General on Friday of their intention to contribute personnel to the Security Council-backed support mission for the crisis-wracked Caribbean nation. 

Kenya has offered to lead the multinational mission that aims to provide much needed back up to the national police in a bid to regain control of the streets from gang rule, which has plunged the country into chaos in recent months. 

Kenya was joined by the Bahamas, Bangladesh, Barbados, Benin, Chad and Jamaica in pledging support. The UN Spokesperson’s Office said “other countries have expressed interest, including publicly, but have not notified the Secretary-General yet.” 

Currently, $18 million has been deposited in the support mission’s Trust Fund, provided by Canada ($8.7 million), France ($3.2 million) and the United States ($6 million). 

Meanwhile, armed violence continues across the country, with Port-au-Prince and the Ouest department the worst hit. 

The situation also remains volatile at the national port, said UN Spokesperson Stéphane Dujarric. 

“The Varreux fuel terminal is now closed after several attacks by gangs. However, on a more positive note, our humanitarian colleagues tell us that in the past three weeks, more than 100 humanitarian containers were retrieved at the Caribbean Port Service.” 

Meanwhile, the humanitarian response continues, and the World Food Programme ( WFP ) has provided daily food assistance to displaced people in Port-au-Prince, and in other departments.  

UN health agency WHO and the UN Children’s Fund (UNICEF) have set up mobile clinics at displacement sites to provide medical consultations. Migration agency IOM is also providing basic medical and psychosocial services to people displaced. 

General Assembly President raises alert over ‘commodity dependence’ 

The President of the General Assembly on Friday called for Member States and stakeholders to address commodity dependence in countries and its effect on the global economy during an informal dialogue on the issue. 

According to Dennis Francis, commodity dependence is “a scenario where 60 per cent or more of a country's export revenue depends on basic goods”, disproportionately affecting mainly developing countries. 

While commodity markets are important to the global economy, excessive commodity dependence leaves countries and their citizens vulnerable to economic instability, he said.  

Mr. Francis called for the issue to be addressed urgently amid ongoing global discussions over debt sustainability and reform of the international financial architecture. 

“I believe that breaking free from commodity dependence, while challenging, is achievable,” Mr. Francis said.  

Dependent nations 

Based on UN trade and development body UNCTAD ’s State of Commodity Dependence report, 85 per cent of the world’s least-developed countries are commodity dependent along with many landlocked developing nations and small island developing States, leaving their economies “ vulnerable and highly susceptible to external shocks ”. 

The Assembly President said the two-decade long increase in countries impacted should “ sound the alarm bell ” for Member States as addressing the issue is necessary for achieving the 2030 Sustainable Development Goals . 

UNHumanRights

Iran police enforces ‘strict’ hijab rules, OHCHR says

Police in Iran are enforcing a violent crackdown against women and girls under the country’s hijab laws, resulting in the arrest and harassment of girls between ages 15 and 17, said Jeremy Laurence, spokesperson for the UN human rights office, OHCHR , on Friday. 

The Tehran head of the Islamic Revolutionary Guard Corps (IRGC) announced on 21 April a new body that would allow them to enforce existing mandatory hijab laws; members of the IRGC are reportedly allowed to implement these laws “in a more serious manner” when in public.

OHCHR is concerned about the Supporting the Family by Promoting the Culture of Chastity and Hijab draft bill, which, in its earlier form, states that violators of the mandated dress code could face flogging, fines or up to 10 years in prison.

Mr. Laurence reiterated that corporal punishment is arbitrary under international law.

As the draft bill is nearing final approval by the Guardian Council, OHCHR is calling for its shelving.

The UN High Commissioner for Human Rights, Volker Türk, is calling on the Iranian government to remove “all forms of gender-based discrimination and violence, including through the revision and the repeal of harmful laws, policies and practices, in line with international human rights norms and standards”.

• World News in Brief

US tourists face 12 years in prison for accidentally bringing ammo to Caribbean island

The u.s. state department is warning travelers about strict new laws in turks and caicos islands that carry a mandatory minimum sentence of 12 years for bringing guns or ammunition to the island: "if you bring a firearm or ammunition into tci, even inadvertently, we will not be able to secure your release from custody", by leslie gaydos • published april 23, 2024 • updated on april 25, 2024 at 8:56 pm.

An Oklahoma woman was reunited Tuesday with her young children after being detained for almost two weeks in Turks and Caicos Islands for allegedly violating their strict guns and ammunition law. Her husband is being held in the British Overseas Territory near the Bahamas.

Ryan and Valerie Watson, who live in Oklahoma, left for Turks and Caicos Islands on April 7 to celebrate the 40th birthdays of Ryan and two friends. When they went through security for their return flight, their carry-on was flagged and searched and officials found a Ziploc bag of bullets.

"They were hunting ammunition rounds that I use for whitetail deer," said Ryan, "and I recognized them and I thought, oh man, what a bonehead mistake that I had no idea that those were in there."

The two shared their story virtually with NBC10 Boston last week before their first court hearing. They were stuck on the island, their passports confiscated, separated from their young son and daughter.

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"When I heard that, I immediately was terrified because I was like, we can't both be in prison for 12 years. We have kids at home. And this is such an innocent mistake that we didn't even know we weren't– we didn't even know it was there. So yeah, my immediate thought was our kids and them being, you know, parentless for, for that long," Valerie said.

The Watsons were questioned and charged with possession of ammunition. In 2022, Turks and Caicos passed an amendment with stiffer penalties for possession of weapons or ammunition, increasing the mandatory minimum prison sentence to 12 years.

This is something that we may never recover from Ryan Watson, American tourist charged with possession of ammunition in Turks and Caicos Islands

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Last September, the U.S. Embassy in the Bahamas issued a travel alert warning Americans after a tourist from Indiana got an eight-month prison sentence for possession of ammunition.

The alert says: "We wish to remind all travelers that declaring a weapon in your luggage with an airline carrier does not grant permission to bring the weapon into TCI [Turks and Caicos Islands] and will result in your arrest.

"We strongly encourage you to carefully check your luggage for stray ammunition or forgotten weapons before departing for TCI. If you bring a firearm or ammunition into TCI, we will not be able to secure your release from custody. You are subject to TCI laws and must follow local law enforcement procedures," the alert continued.

Bryan Hagerich was detained by Turks and Caicos authorities after a family vacation in February when hunting ammunition was found in his luggage before he boarded a flight home. He said the ammunition was found in a bag he frequently used for weekend hunting trips.

"I've been here for almost 70 days now after posting bail. I've been out, right now just waiting to go to the hearing. That's where my case would be heard, then following that would be sentencing," Hagerich said.

Hagerich, who played baseball professionally and was once drafted by the Florida Marlins, lives in Pennsylvania with his wife and two young kids. He spent eight days in prison before posting bail and is awaiting a May 3 court hearing.

"It's incredibly scary. You know, you just don't know what the next day may bring. You know, what path this may take. You know, you're in a completely different culture, a different country by yourself. You know, it's certainly a lot different than packing your bags and going away with your family for a few days. It's been the worst 70 days of my life," Hagerich said.

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He and the Watsons are also dealing with the financial strain of paying for an extended stay and being away from their jobs.

"We've already talked, and we're like, what if, you know, what if we lose our house? Which, when we moved to Oklahoma, we built a home that we thought was our forever home. And to think that this is going to ruin us..." said an emotional Valerie.

"This is something that we may never recover from," Ryan said.

"I'm just very anxious, eager to get home to my family," said Hagerich. "This has been too long. You know, it's just had so much irreparable harm to my family, that, you know, I just can't continue to see them struggle anymore. I just want to hug my family and start this healing process together."

After their hearing yesterday, Ryan was sent to jail; he was granted bail at a hearing on Wednesday. Charges were dropped for Valerie on Monday and she is now back in Oklahoma with her two children.

The judges in Turks and Caicos Islands are able to make exceptions to the mandatory minimum sentence if they determine there are "exceptional circumstances" in a case.

NBC10 Boston reached out to the U.S. Embassy in the Bahamas and Turks and Caicos Islands' tourism bureau about the Watsons' situation and have not heard back. We contacted the State Department and a spokesperson told NBC10 Boston they are aware of the arrest of U.S. citizens in Turks and Caicos and that, "The U.S. Department of State and our embassies and consulates abroad have no greater priority than the safety and security of U.S. citizens overseas."

The spokesperson added, "When a U.S. citizen is arrested overseas, we stand ready to provide all appropriate consular assistance. In a foreign country, U.S. citizens are subject to that country's laws, even if they differ from those in the United States… As our security alert from September 22, 2023 states, in the Turks and Caicos Islands (TCI), firearms, ammunition, and other weapons are not permitted. TCI authorities strictly enforce all firearms related laws. The penalty for traveling to TCI with a firearm, ammunition, or other weapon is a minimum custodial sentence of twelve (12) years. If a traveler brings a firearm or ammunition into TCI, the U.S. Department of State will not be able to secure their release from custody. Travelers are subject to TCI laws and must follow local law enforcement procedures."

The State Department said they are unable to provide the number of U.S. citizens charged with weapon/ammunition possession since the department is unable to track local arrests.

But law enforcement officials in Turks and Caicos Islands acknowledged Wednesday in a statement that three Americans are out on bail in such cases.

"The Firearms Ordinance applies to all persons present within the Turks and Caicos Islands regardless of status or origin," read the statement from the offices of the attorney general and the director of public prosecution.

pic.twitter.com/Kz31Ng5wJk — TCIG Communications Directorate (@TCIG_Press) April 24, 2024

Also Wednesday, the U.S. Embassy in the Bahamas issued a new statement urging all travelers to take care looking for weapons or ammunition when leaving the U.S.

" Carefully check your luggage for stray ammunition or forgotten weapons before departing from the United States ," the warning says in bold, going on to note that enforcement in Turks and Caicos Islands is strict, legally declared weapons aren't allowed in the territory and TSA screening may not turn up ammunition in baggage on the way out of the country.

" If you bring a firearm or ammunition into TCI, even inadvertently, we will not be able to secure your release from custody. You are subject to TCI laws and must follow local law enforcement procedures," the statement said.

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Pictures: 1900 park fare reopens at disney’s grand floridian.

Scenes from the reopening of 1900 Park Fare at Disney’s Grand Floridian resort at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

The dining hall at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

Cinderella interacts with guests at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

Prime rib with horseradish sauce, baked salmon, mashed potatoes and green beans from the buffet at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

A Strawberry Rosé Spritz with La Fête du Rosé, Rockey’s Botanical Liqueur, Tito’s Handmade Vodka and Fresh Strawberry and a Passion Fruit Daiquiri (foreground) with Diplomático Planas Extra Añejo Blanco Rum, Aperol Liqueur, Passion Fruit, Vanilla and Lime at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

Tiana’s Gumbo with added shrimp at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

Princess Tiana interacts with guests at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

The Big Bertha pipe organ at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

Peel-n-eat shrimp at 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

A Passion Fruit Daiquiri with Diplomático Planas Extra Añejo Blanco Rum, Aperol Liqueur, Passion Fruit, Vanilla and Lime at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

Prime rib, macaroni & cheese with glazed carrots from the buffet at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

Aladdin interacts with guests at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

Warm Chocolate Cake dusted with confectioner sugar and a Vanilla Creme Anglaise; Almond Cake with Sea Salt Caramel, Toasted Meringue and a Chocolate Medallion; strawberries and whipped creme, at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

Mirabel interacts with guests at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

Baked Salmon, Focaccia and Green Beans at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

A Strawberry Rosé Spritz with La Fête du Rosé, Rockey’s Botanical Liqueur, Tito’s Handmade Vodka and Fresh Strawberry and a Passion Fruit Daiquiri (background) with Diplomático Planas Extra Añejo Blanco Rum, Aperol Liqueur, Passion Fruit, Vanilla and Lime at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

Curried chicken at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

Lemon Blueberry Cheesecake and Toasted Coconut cake at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

A Strawberry Rosé Spritz with La Fête du Rosé, Rockey’s Botanical Liqueur, Tito’s Handmade Vodka and Fresh Strawberry at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

Disney-style impressionist artwork at the reopening of 1900 Park Fare at Disney’s Grand Floridian Resort & Spa at Walt Disney World, Thursday, April 25, 2024. The turn-of-the-century themed restaurant originally opened in 1988 and reopens after a four-year hiatus following the world pandemic in 2020. (Joe Burbank/Orlando Sentinel)

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