PRESENTATION
JAMAICA INVESTMENT FORUM

NICOLA MADDEN-GREIG
PRESIDENT OF THE JAMAICA HOTEL & TOURIST ASSOCIATION
March 10, 2015

Salutations

Private sector perspective on outlook of sector in Jamaica:

Over the next two days you will hear from numerous presenters all the “good” reasons to invest in Jamaica. Our Director of Tourism has just outlined the plans and outlook for the industry. Well what would you think if I told you that Jamaica is indeed a “BAD” investment option? Yes, “BAD” – B for Buoyant, A for Attractive – very attractive and D for defining – we in Jamaica are at a very defining moment in our industry. And I will spell out the B, A, D for you.

The Jamaican tourism sector is strong and robust. Our sector historically has managed to weather some of the most turbulent times in history and remain buoyant. This buoyancy however was not by luck of the draw; the many local and international players in the sector along with the government have and continue to be strident and responsive to market conditions.

While we have not yet achieved our targeted double digit growth, wecontinue to make strides and welcomed just over 2 million stop-over visitors in 2014,a 3.6.% growth over 2013, with an additional 1.42million cruise ship passengers recording a 12.5% growth over 2013.

The outlook for 2015 looks promising and preliminary results for January and February are showing an increase in stop-over arrivals over 2014. All this in still a very tough competitive environment.

The Jamaica tourism sector continues to see expansion of the Industry with renewed commitments from local investors and the influx of major international chains. Local investors have also been upgrading their products and services geared at not only meeting but exceeding the demands on an ever discerning international traveller.

While the industry has had its challenges with the recent changes in the incentive regime governing the industry, all tourism interests worked harder to produce strong numbers.

The recently enacted Omnibus Incentives legislationdoes provide the ability for those not previously under the Hotels incentive Act to now receive benefits todo on-going renovationand expansion projects.

Jamaica through JAMVAC, The Airports Authority of Jamaica and the JTB has sought and has been successful in attracting many of the world’s top Charter and scheduled air operators. These airlines have found Jamaica to be a sound business investment with good yields. Many have expanded their capacity to the island especially out of the Canadian and US markets.

This steady increase in arrivals over the years has given Jamaica a momentum in the marketplace with the potential for further growth. The push to theopening up of new markets is a joint effort of both the public and private sectors and initiatives targeting China, Latin America, Eastern Europe and the Caribbean are key areas of focus.

Jamaica is also Attractive:

Jamaica is the sports, entertainment and cultural capital of the Caribbean. Theinfluence of our culture which is felt worldwide, far exceeds the reach of our tiny island of just over 2.7 million inhabitants. This is a powerful draw.

The JHTA has continued to place focus on attracting a new breed of traveller who wants to go beyond sun, sea and sand! The JHTA has lobbied the government to pursue to be greater degree niche marketing that plays to Jamaica’s strengths in Sports Tourism, Health and Wellness, Adventure/Culture and Meetings/Conventions. To that end, the Jamaica Sport Committee and well as a sub-committee to address marketing of our convention facilities have been established.

Facilities such as the newly launched Eden Garden Wellness Centre and the soon to be open Hospiten in Montego Bay are a step in the right direction. The Health/Wellness market is growing exponentially. We are already combining sports and wellness with the proliferation of 5K and international marathons such as the Kingston City Run and the ever popular Reggae Marathon in Negril.

As the JHTA we are encouraging our members to seek partnerships with area medical and sporting associations. We are also partnering with other governmental agencies working on attracting investment in these areas. Jamaica can sprint ahead and take its rightful place in front of the pack for this niche market.

Yet, we have just started on this path and are yet to tap the full potential of these niche segments.

So ladies and gentlemen, exciting times are ahead.

This attractiveness of Jamaica is also played out in the wide range of accommodations and attractions from small boutique hotels to mega all-inclusives.

In the nineties the JHTA created specific themes to highlight a unique selling proposition of our six (6) resort areas.This decision has effectively led to a strong repeat guest ratio for Jamaica as each resort area is marketed as a must-do. The themes of Montego Bay – the complete resort, Negril – the capital of casual, Kingston – the heartbeat of Jamaica, South Coast – off the beaten path, Ocho Rios – the garden parish and Port Antonio – naturally, communicates the diversity of each area.

We at the JHTA also recognize the new trend where city tourism is now experiencing major growth. In fact, city tourism worldwide is growing faster than international tourism as a percentage.

The millenials as business travellers are part of the creative class who are mainly knowledge workers, intellectuals and artists. Cities such as Kingston are ideal for this new traveller. The city’s reputation for nightlife, culture, music sports, art and technology are key assets.

There is a real opportunity to open up Kingston as the gateway to the east carrying along Port Antonio, St. Thomas and the South Coast. All these resort areas offer unique experiences geared towards the needs and expectations of this new millennial traveller. They are looking for hip, happening destinations. Our appeal is unquestionable.

The Hip Strip of Montego Bay is also ideal for this traveller and there are over 500 closed hotels rooms as well as restaurants and attractions that are ready for investors who see the vision of the future.

The addition and soon completion of the North-South highway will serve to open up the resort areas of the South Coast, Port Antonio, Kingston and the majestic Blue Mountains will be in easier access to visitors seeking the diversity that Jamaica has to offer.

Another reason Jamaica is Attractive

Is the great advantage of access to a strong, trained and skilled labour pool. Jamaica’s hospitality service is world renowned and attracts many international recruitersscouting for staff, to our shores. Yes, we do lose them at times to the international marketplace but the advantage is that the majority of the persons go on short term contracts and these workers return to the island with greater exposure to a range of clientele and they put their enhanced skills and expertise into their jobs.

Long ago, when I worked at Half Moon I asked the Managing Director why Half Moon spent so much on training and especially when we often lose team members to competing hotels. The response was simple, a better trained worker whether at our hotel or moving on to another means an overall better reputation for service in Jamaica. You will find that this level of unselfish sharing of best practices is a feature of the Jamaican hotel landscape where large established properties through the arms of the JHTA share trade secrets and ideas with small players to ensure the overall reputation of Jamaica continues to improve.

In essence making sure as the tide rises - ALL boats float.

In the meantime, our luxury market remains competitive and our 4 and 5 star hotels continue to exceed the expectations of discerning travellers.

Small and EP properties are reporting growth and continue to upgrade their offerings

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Jamaica’s attractions and places of interest are some of the most beautiful. We have numerous attractions catering to the various desires from slow and easy to adventurous and untamed. However, they are still under-utilized and with many possibilities for future development. Jamaica has the potential to use attractions to drive visitor arrivals and claim its place as the number #1 destination in the Caribbean. We must be the Orlando of the Caribbean. Assets such as the Blue & John Crow Mountains, Seville in St. Ann and Port Royal are just a few of the many that can be further developed. Entrepreneurs need to see the potential of investing in the sub-sector, that can, like Disney did for Orlando, create a scenario where travellers choose the attraction first then figure out later where they will stay.

Our unique heritage also gives us many segments to explore for specialized tours. For example the ethnicmix in Jamaica presents a great opportunity for pilgrimages – Jewish

pilgrimage tourism is already growing in Jamaica. Similar heritage tours geared at showcasing the deep roots of our “Out of Many One People” Motto can be customized. This niche segment as the ones mentioned before, go beyond the typical winter traveller profile and can help solve the perennial issue of low occupancy that plagues the fall months of September – December and other low yield periods. Investors in Jamaica’s tourism product must think outside the box, and work collectively to flatten the demand curve.

Jamaica is also at a Defining Moment in our industry.

The industry currently is dominated by medium to large all-inclusive properties a concept pioneered by ingenious Jamaican hoteliers. The popularity of the model is so wide spread that even world class EP chains such as Hyatt are now opening up all-inclusive properties. While this is a model that must continue to have resonance for Jamaica, there is a parallel strategy that must be employed.

Recent research by Comscore, pointed out that70% of millenials would rather spend money on an experience than on a material item. Millenials are predicted to surpass the spending power of Baby Boomers by 2018. Coupled with this need to travel is also the mindset that the standard vacation taken by “Mom and Pop” is old school and they prefer extended, meaningful experiences.

They are also more open to adventure and unique one-of-a-kind vacations.

We therefore, have an opportunity in the industry to foster the growth and development of unique high end luxury E.P. properties across our resort areas most suited for this kind of development. Port Antonio, The South Coast, Negril and Kingston come to mind.

Jamaica is also at a defining moment with the opening up of Cuba. We feel this should be looked at as an opportunity to promote a “new Caribbean”. The proximity of Jamaica to Cuba and even the Dominican Republic and Cayman provides the potential for cruise tourism between these islands similar to a Mediterranean experience. Chain hotels may also consider multi-destination marketing for long stay clientele seeking a diverse vacation experience.

As pointed out earlier with our defined six Resort Areas and respective themes there is also an opportunity for a round the island cruise. A savvy investor could easily create a once-in-a-lifetime memorable experience that showcases the best of Jamaica.

The Jamaican industry could be described as mature, however, with our foray into niche segments, strategically moving to even further diversify our products and services, while seeking new avenues for development on island and jointly across borders, we will, like the number one female artist of the past twenty (20) years – Madonna – continue to re-invent Jamaica and make her shiny and new!

As I said ladies and gentlemen, Jamaica is BAD!

Partnership with Government in supporting tourism investment in Jamaica.

The JHTA works very closely with the Ministry of Tourism and Entertainment and other key Ministries and Government agencies to ensure the success of tourism. While we may not always agree on everything or even the best path forward what we do agree on is that tourism is essential to Jamaica’s economy and we maintain an open line of communication and employ numerous avenues to work through our areas of disagreement and to champion our areas of shared vision.

Executive members as well as other key tourism partners sit on the boards of the Jamaica Tourist Board, The Tourism Enhancement Fund, the Tourism ProductDevelopmentCompany and the various resort boards.

The JHTA is also a member of the Tourism Linkages Council that includes the manufacturing, agriculture and creative industries. The Council’s main objective it to ensure the full benefits of the industry accrue to all Jamaicans by fostering opportunities for local suppliers to provide the requisite goods and services.

The JHTA recently spearheaded a Speed Networking event where over 80 suppliers met with over 50 hoteliers and attractions. Over 1000 appointments were scheduled. The event was a tremendous success with a 95% satisfaction rate being reported by attendees.

Marketing Collaboration:

This is one of the most crucial areas of collaboration for the industry. Annual sales blitzes, familiarization tours, media trips, online webinars, blogger visits, co-op advertising opportunities are planned and executed with the input of both the private and public sector teams. Through a joint JHTA/JTB marketing sub-committee tremendous effort is made to ensure the marketing strategy of the private sector and the public sector are aligned to get the best results for the island.

The on island marketing activities are strongly supported by the private sector where thousands of complimentary room nights are given annually along with food and beverage, attraction passes, ground transportationto support fly-ins of thousands of travel agents and media to get the Jamaican story out to the world.

JAPEX:

Our annual trade show JAPEX showcases the best of Jamaica to the international market. In 2014 we assembled over 200 of the best in Jamaica’s hospitality and tourism industry including hotels, airlines, attractions, and allied members to meet with over 300 delegates representing the world’s major wholesale, tour operators, travel agents and media from the USA, Australia, the Czech Republic, Canada, TheDominican Republic, Germany, Mexico and the UK.

In addition, we welcomed an on-going partnership with JAMPRO, Jamaica Manufacturers Assn., Jamaica Business Development Company and RADA, facilitated through the Tourism Linkages Council presenting over 30 suppliers who showcased a wide array of products and services in a fully integrated hospitality and tourism industry that benefits all Jamaica.

This industry spawned by indigenous operators has evolved with the injection of both local and foreign investment. Jamaican investors, some in concert with overseas partners are demonstrating continued confidence in this destination.

As the new breed of travellers is looking for a destination that answers the call for unique, culturally rich experiences, Jamaica has all the assets to answer that call across our diverse resort areas.

Overview of the JHTA:

The JHTA is the voice of the industry and plays a strong role in supporting the investor through numerous channels. The structure of the Association is based upon six (6) resort area Chapters with a head office in Kingston. The JHTA Executive is on several government and private sector boards and works to forward the growth agenda for the industry by creating dialogue, partnerships and working to remove impediments to the sector.

Currently the JHTA membership includes 111 properties, representing roughly 18,518 rooms or 90% of the total number of hotel rooms available on island. Our membership also includes 100 Allied members.

The Association is also widely regarded by international Organizations such as the World Bank, USAID, DFID and IDB and is often engaged by these organizations in discussions pertaining to competitiveness, financing, productive development and growth targets for Jamaica.

Our Committees are Advocacy, Marketing and Public Relations, Safety and Security, Product Development, Environment and Energy, Membership and Recognition, Allied and Linkages, Small Accommodations and Finance and Revenue.

Each sub-committee carries out the day-to-day mandate of the Association and provides services to the membership.

So in closing, I just want to point out that atthe JHTA we embrace as a strategic mission taking advantage of our diverse hospitality and tourism industry that spans a wide variety of accommodations from small to intimate, to large and contemporary, transportation providers, attractions, tours, dining and entertainment along with a host of popular festivals and events that appeal to the psychometric desires of potential travellers looking to go beyond sun, sea and sand to create life changing experiences.

There is no disputing that destination Jamaica continues to be aspirational and we at the JHTA feel privileged for the part we play in this regard.