It’s Budget season In the CarIbbean: How does St Lucia’s measure up?

THE STAR Businessweek APRIL 20, 2019

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It’s Budget season in the Caribbean: how does St Lucia’s measure up?

By Catherine Morris, STAR Businessweek Correspondent

Prime Minister Allen Chastanet unveiled his 2019/2020 budget this week, listing his government’s priorities as infrastructure, agriculture, sport, health and education but acknowledging that Saint Lucia is “lagging behind” its Eastern Caribbean neighbours.

in this edition of

SBW THE STAR Businessweek

Threats to Commercial Fishing in the Caribbean The Caribbean family has always had a complex relationship with the seas that surround its nations; the story of fishing in the region is reflective of this.

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Continued on page 4

Airbnb’s Future Up In The Air? Airbnb is one of the glittering apps of the disruption era; a leader among a field of players like Uber, Kindle and Spotify that launched with the promise to shake up industries and revolutionise the way we use them.

Certainly, Airbnb has made a splash in the Caribbean.

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Left to right: Jamaica’s Prime Minister Andrew Holness, Saint Lucia’s Prime Minister, Allen Chastanet and Barbados’ Prime Minister Mia Mottley

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APRIL 20, 2019

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BY Christian Wayne – Editor at Large

n the final Businessweek edition of March 2019, we published an article entitled: “A Sinking Feeling: The Cruise Industry’s Dirty Secrets”. In that story, we sought to highlight the little-known truths about the cruising industry, its global operators and their widespread illicit environmental practices. Most of the cases discussed in that article involved Carnival Cruise Lines, the world’s largest travel leisure company. While it’s no surprise that these floating metropolises generate a whopping amount of garbage and waste, many cruisers and their hosts in foreign nations like ours might be surprised to learn how unregulated the operations of these behemoth companies truly are; after all, meaningful oversight is difficult when most of the ships’ operations take place in international waters. Nevertheless, one federal court judge in the United States is taking Carnival Corporation (the parent company of Carnival Cruise Lines) to task for a slew of violations and coverups including the illegal dumping of wastewater off the coast of Glacier Bay (a World Heritage Site in Alaska), the flagrant dumping of plastic waste overboard its Carnival Elation ship (a cruise liner that frequents the Bahamas) and for probation violations stemming from a court settlement where Carnival ships were found guilty of illegally dumping oil into the ocean — and subsequently lying about it to investigators!

U.S. District Judge Patricia Seitz has threatened to restrict Carnival ships from docking at all American ports pending her decision at a hearing set to take place this summer. For more on this story, check out the Associated Press article on page 6.

Hot on the heels of last week’s piece on the Caribbean’s maritime shipping industry, we’re focusing this week on commercial fishing — another import sector of the ‘blue economy’. Long characterized by poor regulation and even poorer fisheries management, this critical Caribbean industry is under threat not just from climate change but also from flaccid regulators. Read more in “Threats to Commercial Fishing in the Caribbean” on page 3.

Airbnb’s rise (or scourge, depending on who you ask!) in the Caribbean began roughly six years ago, but the alternative accommodation provider has surged in popularity within the past three years.

Championed by hosts as a great source of supplementary income and by travellers as a tool for finding more affordable travel

accommodations, the company has undeniably disrupted the market for traditional hotels . . . but by how much?

In “Airbnb’s Future Up In The Air?” on page 7, we’re asking the question: Is Airbnb really the ‘killer app’ it’s made out to be?

Earlier this week, Prime Minister Allen Chastanet presented his government’s EC$ 1.59bn 2019/2020 budget under the theme of ‘Growth by empowerment for a better future’.

As Businessweek readers will already know, the Caribbean is well into budget season with both Jamaica and Barbados having presented their annual budgets a few weeks ago. Earning cover rights this week is a side-by-side-by-side comparison of how Saint Lucia’s fiscal plans stack up against those of Jamaica and Barbados. This article highlights the similarities and the differences in each budget along with the underlying economic ideologies that define each respective government.

Finally, readers will also find a pre-Brexit synopsis about the recent developments on the Caribbean-United Kingdom trade relations front. Several islands recently inked new trade agreements with the UK leading up to London’s imminent divorce from Brussels. More on that story starting on page 5. Worth noting: CARIFORUM trade diplomats began negotiations earlier this week in Jamaica on a post-Cotonou trade treaty between CARIFORUM and the European Union.

Those meetings will inform later stage negotiations as part of the revised ACP–EU Partnership agreement that’s set to expire next year. That particular agreement is the most comprehensive partnership agreement between developing countries and the EU; so keep watching that space because if negotiations stall and EU elections take place before a new agreement is signed, the ACP nations (79 countries throughout Africa, the Caribbean and the Pacific) may discover that their new EU counterparts have a lot less interest in the whole endeavour.

It’s Nothing Personal.

It’s Business.

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COMMERCIAL FISHING

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APRIL 20, 2019

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Threats to Commercial Fishing in the Caribbean

By ED Kennedy, STAR Businessweek Correspondent

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he Caribbean family has always had a complex relationship with the seas that surround its nations; the story of fishing in the region is reflective of this. While businesses have earned income and sustained livelihoods due to fishing, there have occasionally been great setbacks and struggles owing to hurricanes and other misfortunes visited upon the region’s waters.

Now in 2019 a new chapter is beginning in the story of the Caribbean’s commercial fishing sector; and while this industry is one that has always had ebbs and flows, it’s clear that this latest chapter will be its most crucial yet.

The Commercial Fishing Industry Today

An understanding of the contemporary state of commercial fishing within the Caribbean first requires a recognition of the biggest fishing nations and regions of the world, and how their practices compare to fishing in local waters.

A listing of the world’s biggest fishing nations shows that the clear and decisive shift of economic power from west to east is well underway.

2016 saw the United States remain the fourth largest commercial fishing nation in the world, hauling in 4.92 million metric tons annually. Norway was the only other Western nation (and sole European one) within the top 10, harvesting 2.03 metric tons annually.

China, Indonesia and India formed the top three, and collectively harvested 29.16 metric tons annually. Though nations in Asia have led in harvesting, in many global issues within commercial fishing they’ve lagged (further particulars detailed later on).

The annual haul alone is not the sole indicator of economic productivity and profit. After all, Russian caviar may be rarer but it will invariably attract a higher price by the pound than the Catch of the Day. A list of the top ten exporting nations bears many similarities to a list of the largest commercial fishing nations.

The presence of Canada, Sweden and Chile in the top 10 of the world’s biggest exporting nations shows that countries with a comparatively smaller population can still make a big splash in global fishing. The key consideration is: At what price?

Casting a Line in the Caribbean

Recent years have seen substantial change to fishing operations across the region. Yes, human beings have been

Although it is not one of the world’s largest or well-developed commercial fishing areas, the Caribbean helps fuel America’s massive demand for fish and seafood and has valuable species such as swordfish and tuna.

fishing since the hunter-gatherer era but the remarkable speed of globalisation in the past couple of decades has brought change like never before.

The region’s nations are encircled by water — and so have an abundance of potential resources on hand — but the comparatively small population (and the separation of nations as sovereign entities) means that total output as a region has historically been limited.

For the Caribbean commercial fishing industry, opening up to the soaring global demand that brings more profits locally is great, especially when the existential threat of climate change is considered

Here in Saint Lucia it was really only in the 1990s that an industrial element came to be present in this nation’s Exclusive Economic Zone (spanning 15,400 square kilometers around the island), with the introduction of offshore fishery technology and upgraded fibreglass boats, provided via Japan, replacing traditional canoes that numerous Saint Lucian fishermen were still using.

While some exporting appears to have occured before then, beginning with a turtle trade to the UK in the 1950s, the little documentation that has survived through the decades makes it difficult to confirm the nature and scale of the industry.

Nonetheless, that prior generation’s fishermen were known to utilise relatively simple equipment, with around only 50 per cent of boats mechanised in the late 1960s.

The industry has typically known periods of rapid growth and setback; consider the destruction caused by hurricanes like the infamous Hurricane Allen that struck in August 1980. But the present era is unlike one any fishing business has ever faced before.

Catch and Release

The rising middle class in many Asian nations is a tremendous achievement in the battle against global poverty but it

comes with new challenges. Thankfully, commercial whaling has largely disappeared, although Japan has long gone against the grain of international opinion by continuing to practise it, albeit under the auspices of ‘scientific research’. Prominent success stories have been seen, such as the Chinese people’s commendable turn away from shark-fin soup, with consumption dropping around 80 per cent between 2011 and 2018, but demand for the dish elsewhere in Asia means that conservation successes can be a case of ‘one step forward, two steps back’.

Many Caribbean fishers are understood to have long under-reported hauls of certain species that are endangered, weighing the risks of such a species not being there tomorrow against failing to turn a profit today. The result of this saw researchers in 2017 declare that 90 per cent of the Caribbean’s predatory fish had disappeared due to overfishing.

Compounding this is the threat of climate change. The bleaching of coral reef has resulted in a direct and immediate impact on fish populations.

For the Caribbean commercial fishing industry, opening up to the soaring global demand that brings more profits locally is great, especially when the existential threat of climate change is considered.

But satisfying the demand, especially a surging and colossal one, cannot come at the expense of long-term sustainability, particularly when some markets have little to no regard for conservation. In this regard, local conservation groups have done some tremendous work to raise awareness of the issues and drive change, but more remains to be done.

Looking Ahead

In the future there’s the prospect of nurturing new fish and other marine life at nurseries, to assist in repopulation of depleted seas. Advances in technology will make it easier to monitor fish stocks and help prevent overfishing.

But neither of these future possibilities should be relied on presently in the absence of strong regulations and vigilant monitoring. Just like the efforts to slow the impact of climate change, any idea that a cure is more or less as good as prevention, is wrong.

Even if innovation cycles shorten, the presumption that resources can be wasted today due to the advances expected tomorrow would be foolish. But they do offer some comfort to those who’ve looked with anguish at the setbacks seen in years prior, and worry about the sustainability of the industry and fish populations in the years ahead.

Yes, there is some relief on the horizon — but ultimately the tide SBW must turn today.

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APRIL 20, 2019

ECONOMY

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It’s Budget season in the Caribbean: how does St Lucia’s measure up?

Continued from page 1

Prime Minister Chastanet also made mention of reforming the personal income tax system: “a large number of low-income employees will no longer be required to pay personal income tax, while others will benefit from reduced tax liabilities”.

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ast year, the country’s budget was themed ‘building resilience’. This year it focuses on ‘growth by empowerment’ with a medium-term development plan to map Saint Lucia’s progress up to 2022.

Saint Lucia’s debt to GDP ratio continues to trend in the right direction, falling from 65.2 per cent in 2017 to 64.9 per cent last year. This encouraging marker was driven in part by growth in tourism and agriculture, as well as a 6.4 per cent uptick in government revenue bolstered by healthy uptake of the Citizenship by Investment programme which generated EC$ 66.4mn this year.

Hoping to stimulate more activity in the coming year the government intends to spend EC$ 300.6mn funding projects, with most of this going towards capital expenditure and earmarked for infrastructure, social programmes and the development of core industries such as tourism and agriculture.

Caribbean comparison

The prime minister may have pledged to meet Saint Lucia’s challenges “head on” but how do the country’s performance and plans compare with other Caribbean islands? Both Barbados and Jamaica released their budgets last month and both were characterised by an emphasis on economic independence and stability.

For Jamaica that comes in the form of reducing its runaway debt to 96 per cent of the country’s GDP — the first time it

has dropped below 100 per cent in two decades — and building on the 2018/2019 growth rate of around 2 per cent. Hoping to stimulate investment, the Jamaican government is cutting its heavy tax burden, abolishing or phasing out several taxes at a cost to government of around JA$ 14bn.

Jamaica also hopes to spend its way out of trouble, with an increase in government expenditure to around JA$ 800bn.

The tone of Jamaica’s budget may be fiercely independent (with Minister of Finance Dr Nigel Clarke telling parliament: “Economic independence means that we as a country are empowered to chart our economic destiny. We are a people of destiny, a nation of purpose.”) but the yawning gap between expenditure and revenue means a shortfall — one that forces Jamaica to borrow an estimated JA$ 160bn in the coming fiscal year.

In contrast to Jamaica, which hopes to kickstart economic advancement, Barbados focuses on “staying the course” — making slow but steady progress to ensure fiscal stability continues. But the nation arguably has more work to do than its Caribbean neighbours. Once given the dubious honour of having the third highest debt to GDP ratio in the world, Barbados is still one of the region’s worst performers with debt amounting to around 125 per cent of its GDP. The country’s economy contracted by 0.6 per cent last year and is expected to remain flat through 2020. Current GDP for the island is around BBD$ 10.2mn.

Barbadian Prime Minister Mia Mottley delivered a realistic, but optimistic,

summary. Acknowledging the country’s “major challenges” in her Budget presentation she said: “We can’t recover a lost decade in ten months or even five years.

I am not going to fool the people of this country.”

With stability high on the agenda, the Barbadian government is looking at a seven-year plan and hoping to reach its targets through stimulating international business and growing tourism. In sharp contrast to Jamaica, the Eastern Caribbean island is upping taxes, broadening the VAT base and increasing industry taxation. In addition, Mottley is focused on improving ease of doing business through liberalising exchange controls and streamlining bureaucracy. In the tourism sector, she is increasing VAT on accommodations and urging stakeholders to innovate into new niches such as medical tourism and gaming.

Common themes

What do the budgets of Saint Lucia, Barbados and Jamaica have in common?

A focus on infrastructure, security and reforming the public service.

The fight against crime is an ongoing issue for all Caribbean nations. Disturbed by a rising tide of gun crime, Barbados is investing BBD$ 41mn in extra security equipment at its Bridgetown Port and looking to secure its borders with more equipment and canine patrols. For Jamaica, national security is also at the top of its agenda, receiving the largest slice of its JA$ 72bn capital expenditure budget. Just over JA$ 20bn will be given

to upgrade military barracks, purchase new security equipment, renovate police stations and improve correctional facilities.

In Saint Lucia, citizen safety was one of the key tenets of the prime minister’s development plan with the government aiming to reduce crime by 45 per cent and repeat offending by 30 per cent by 2022. It intends to do this by investing in policing, the judicial system and rehabiliation services. EC$ 1.8mn will help fund a CCTV initiative in Castries, while infrastructure and human resources at the courts will be further strengthened.

Infrastructure is another concern for small island states and features significantly in both Saint Lucia and Jamaica’s spending in 2019. Almost a third of Prime Minister Chastanet’s development budget is going to the Department of Infrastructure, Ports and Energy — allocating EC$ 79.8mn for road repairs, bridges and maintenance projects.

This marks Saint Lucia’s biggest public investment in infrastructure in over ten years.

Similarly, infrastructure is the second biggest expense in Jamaica’s capital budget which channels JA$ 18.4bn into road upgrades, construction of new highways and rehabilitation works.

With a focus on gaining efficiencies within the public sector, Jamaica and Barbados are embracing technology in their 2019 Budgets. The latter has made digitisation a priority for seven government departments so Barbadians can soon pay their taxes, renew their driver’s liences and passports, and pay fines online. Jamaica is launching an online pension service for public sector employees in addition to modernising the tax office services.

In Saint Lucia, the newly created Performance Management and Delivery Unit will be tasked with overseeing the implementation of the mediumterm development plan and required to “build capacity in delivery across the public service through better planning, implementation and knowledge sharing”.

A global backdrop

While Barbados looks inward and Jamaica prioritises independence, Saint Lucia was keen to put its Budget in a global context.

Prime Minister Chastanet warned of the nation’s fiscal vulnerability, saying: “Uncertainties in the economies of our source markets for tourism and investment could pose a threat to us and we are watching these developments closely.”

Notwithstanding global shocks, all three Caribbean states are predicting slow but steady growth in 2019. Saint Lucia is looking ahead to 3 per cent expansion in the coming year thanks to more activity in public and private sector construction and greater revenue from tourism. According to the prime minister: “This is going to be a very important year for our country. We must not allow ourselves to get distracted.

After 40 years we must have learned by now that we are stronger when we work together, when we are all-in.”

Global Trade

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APRIL 20, 2019

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UK-Caribbean Relations in a Post-Brexit World

By Catherine Morris, STAR Businessweek Correspondent

UK’s Minister of State for Trade Policy in the Department of International Trade, George Hollingbery (left) and CARIFORUM representatives signing a new EPA agreement last month.

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he seemingly interminable Brexit saga rolls on. Last week the UK secured a last minute reprieve from the European Union as it prepared to crash out of the community without a deal in sight. With Britain facing yet another deadline — present an approved divorce deal to the EU by October 31 or risk whatever political goodwill remains — the formerly staunch European trading partner faces some hard questions about its future, not just in Europe but around the world with allies such as those in the Caribbean.

What is the current status of Brexit?

Even the most avid political commentators suffered from Brexit fatigue in recent months as the UK Parliament engaged in near constant debate about how to extricate itself from its European neighbours. Embattled Prime Minister Theresa May faced mutiny within her own party which split into the so-called ‘hard Brexiteers’, the ‘remainers’ and those eager to find a delicate middle ground that appeals to both the government and the electorate.

Discussions ground to a standstill over several key issues, including how to police the border between Ireland and Northern Ireland — the UK’s only border with the EU. This contentious backstop is not only significant in terms of what it means for the EU Customs Union and the European Single Market, but is also politically sensitive given the hard-won peace in Northern Ireland.

Other areas under scrutiny are the ‘divorce bill’ Britain faces as it negotiates its financial

obligations to the bloc, immigration controls, free movement of people and services, and trade. It is the latter that has nations all over the globe watching closely, including those in the Caribbean region.

The UK was under pressure to reach an exit deal by March 29 but Theresa May’s last-ditch effort failed to gain enough support to push it through parliament. A new date was set — come to the table with an approved deal by April 12 or risk a painful and extended exit — and again it was missed.

Last week EU leaders met for a lengthy debate over Britian’s future, trying to strike a balance between ensuring stability and continuity, and bringing the UK to heel with a more punitive approach (French President Emmanuel Macron warned of a “rogue” Britian undermining the bloc). Theresa May won her extension, and the UK will remain an EU member until October 31, with the option to leave earlier if she can do what she’s failed to pull off so many times before and cajole parliament into a deal.

What does this mean for the Caribbean?

Granting the UK an extra six months’ membership, European Council President Donald Tusk cautioned the country: “Please do not waste this time.” It’s advice the British government has taken to heart.

Uncertainty is bad for business, and terrible for trade. Mindful of the impact on its markets, the UK got busy before the March Brexit deadline signing new agreements with its partners. Trade flows between the UK and the Caribbean have long come under the

EU’s free trade agreements but, with Britain withdrawing from the European bloc, it is forced to find its own way. The Caribbean’s biggest imports by Britain are bananas, sugar cane and rum. In 2017 the UK bought 100 per cent of Saint Lucia’s banana exports, and total trade between the region and Britain that year amounted to around GBP 2.5bn, according to the UK government.

On March 22, UK Trade Policy Minister George Hollingbery met with ministers from several Caribbean states, including Saint Lucia, to sign the CARIFORUM-UK Economic Partnership Agreement (EPA).

This agreement is designed to ensure trade continuity and was widely welcomed among the Caribbean community. Chairman of the West Indies Rum & Spirits Producers’ Association Komal Samaroo said: “We’re extremely happy to see the culmination of this agreement which both sides have worked hard to achieve. The UK is a major export destination for our rums and we are pleased that the trade provisions will maintain our continued access to that market.”

The EPA guarantees no tariffs on all goods imported into the UK from Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, St Kitts and Nevis, Saint Lucia and St Vincent and the Grenadines. The UK government estimates that the deal will save Caribbean banana, fruit and nut exporters GBP 14mn a year in tariff charges and GBP 20mn for those exporting sugarcane or sugar products.

What next?

Backing out of the EU means the UK has to renegotiate trade with over 70 countries.

Deals currently finalised include those with Switzerland, Fiji, Papua New Guinea and Caribbean states. The new CARIFORUM-UK EPA is expected to come into effect in January 2021, or as soon as possible after the UK leaves the EU if no deal is struck.

The previous CARIFORUM EPA was the result of a three-decade relationship between Europe and the Caribbean, through which a stable and mutually beneficial trading system operated. Replacing this with its new incarnation, containing similar provisions, will do a lot to address fears in the post-Brexit era but global trade is still on shaky ground. While

the Caribbean enjoys a bilateral trading relationship with the UK, the region’s governments also participate in multilateral agreements through the World Trade Organization. How Brexit will affect these delicate deals is yet to be seen.

Brexit will also have an impact on development financing. European bodies such as the European Development Fund (EDF) have invested significantly in the region. Without the UK’s support and financial contribution, the EDF may well refocus its remit and Britain will have to find other ways to channel assistance funding into Saint Lucia and other Caribbean nations.

Trade between the UK and Saint Lucia should continue on the same footing in a post-Brexit world, but Britain is more than just a banana market for this island nation. The two countries have enjoyed a close relationship for decades with Saint Lucia welcoming droves of British holidaymakers and second-home owners each year. Brexit and the resulting fluctuations of the GB pound have already affected Saint Lucia’s real estate market and that looks set to continue as the protracted political furore drags on.

With the pound falling, British tourists are likely to stay close to home for their vacations, and British shoppers may well find themselves cutting Caribbean products from their grocery lists.

Over the long term, Britain has said it remains committed to its former colonies and Commonwealth partners. Despite the recent spate of alarmist headlines, Brexit is far from a catastrophe for the Caribbean but merely another road bump in the constantly changing landscape of global trade.

When Prince Charles visited Saint Lucia in March, he called the country “a vital member of our Commonwealth family” and continued by saying: “Through all the unprecedented global change, it seems to me that the Commonwealth remains as vital today as it has ever been. The Commonwealth brings us together and gives us the means to harnass shared opportunities as well as to address common challenges.”

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APRIL 20, 2019

TOURISM

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Judge Threatens to Stop Carnival Cruise Ships From Docking in U.S. Over Waste Dumping

By Associated Press

The Holland America Westerdam is shown in Juneau, Alaska on August 29, 2011. A federal judge in Miami threatened on April 10, 2019 to temporarily block Carnival Corp. from docking cruise ships at ports in the United States as punishment for a possible probation violation.

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IAMI — A federal judge has threatened to temporarily block Carnival Corp. from docking cruise ships at ports in the United States as punishment for a possible probation violation.

The Miami Herald reports U.S. District Judge Patricia Seitz said last Wednesday that she’ll make a decision in June, and she wants company chairman Micky Arison and president Donald Arnold to attend that hearing.

“The people at the top are treating this as a gnat,” Seitz said. “If I could, I would give all the members of the executive committee a visit to the detention centre for a couple of days. It’s amazing how that helps people come to focus on reality.”

Miami-based Carnival has been on probation for two years as part of a US$ 40mn settlement for illegally dumping oil into the ocean from its Princess Cruises ships and lying about the scheme, according to court filings.

Despite this, prosecutors say ships have dumped grey water into Alaska’s Glacier Bay National Park, prepared ships in advance of court-ordered audits to avoid unfavourable findings, falsified records and dumped plastic garbage into the ocean. The company has acknowledged these incidents in court filings.

In a statement after the hearing, Carnival said “It appears there were some mischaracterizations made by others to the court. We intend to fully address the issues raised at today’s court conference.”

Carnival’s Chief Communications Officer Roger Frizzell said, “Our environmental responsibility has been,

and continues to be, a top priority for the company.”

The five-year probation began in April 2017 and requires a third-party auditor to inspect ships belonging to Carnival and its subsidiaries. Carnival owns nine cruise brands and has 102 ships.

The court filings say that during 2017 Carnival had a programme in place to prepare ships in advance of the audits to avoid negative findings. Seitz ordered the company to stop in December 2017, and it stopped. But federal prosecutors said the practice continued in 2018.

Prosecutors said internal emails shared among Carnival’s subsidiaries discussed the practice. An email from Carnival’s Germanbased cruise line AIDA Cruises said, “It would be really important to go onboard on August 12 for one week in order to have time to manage issues before the audits and avoid findings.”

They said a similar email from Carnival’s Seattle-based Holland America Line mentioned “prevent audit findings” as a goal in early 2018.

The court filings said the monitor found that Carnival and its subsidiaries repeatedly falsified records, as recently as September 2018 when an engineer on Holland America’s Westerdam ship falsified maintenance records to make it appear he

Carnival’s Chief Communications Officer Roger Frizzell said, “Our environmental responsibility has been, and continues to be, a top priority for the company.”

had cleaned and tested equipment when he had not. The same ship, according to court filings, dumped 26,000 gallons of grey water into Glacier Bay National Park in September 2018.

Monitors also found that the Carnival Elation ship dumped plastic garbage overboard during an audit in December. The plastic wasn’t being separated from food, court filings said.

The judge last Wednesday mentioned a 45-minute presentation she received as a guest onboard Carnival Corp.’s ultraluxury cruise line Seabourn about how plastic straws are damaging the marine environment.

“I was thinking to myself, ‘I’m impressed,’” she said, “Obviously they talk the talk, but they aren’t walking the walk.”

TOURISM

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APRIL 20, 2019

Airbnb’s Future Up In The Air?

By ED Kennedy, STAR Businessweek Correspondent

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irbnb is one of the glittering apps of the disruption era; a leader among a field of players like Uber, Kindle and Spotify that launched with the promise to shake up industries and revolutionise the way we use them. Certainly, Airbnb has made a splash in the Caribbean.

Though Airbnb’s launch came with great fanfare and the promise of sweeping and enduring changes to accommodation as we know it, after a number of years it appears that the first wave of the Airbnb revolution has come and gone while ‘regular’ hotels are still here.

So what do the stats and data tell us about Airbnb? And what may the future hold for it in the region? Let’s look now in-depth.

Airbnb Globally

Since its founding in 2008, Airbnb has seen an incredible rate of growth although, as discussed further ahead, this growth hasn’t been without speed bumps or setbacks. In spite of this, even the greatest detractor of the online accommodation provider couldn’t fail to recognise its achievements.

According to Airbnb there are over 6 million listings on its platform across the globe. These listings cover 81,000 cities in 191 countries. Due to various territorial conflicts and diplomatic disputes, there’s some disagreement over exactly how many countries there are in the world but, given that the United Nations recognises 193 countries, it’s no understatement to say that Airbnb’s presence is truly global.

Airbnb rentals start well below US$ 100 a night for a single, cosy bed somewhere, all the way up to thousands of dollars per night for luxury accomodation overlooking some of the world’s most famous sights. But despite its huge diversity and ongoing popularity, Airbnb is not invulnerable to all headwinds.

The High Season of Airbnb Growth?

However one looks at it, Airbnb is

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fortunes here will give pause for thought.

Hoteliers across the region have approached Airbnb in different ways.

Some have looked to resist it, others embrace it, and some simply try to co-exist. For hoteliers who have found it hard to do the latter, there is the possibility that the storm clouds are clearing for longstanding providers, while they are growing for Airbnb.

Airbnb in the Future

For families travelling with kids and elderly in-laws, all-inclusive resorts often prove to be an easier option than an Airbnb vacation rental

slowing in growth. In 2017 it was forecast that Airbnb profits would rise to US$ 3bn by 2020. Though it was revealed in 2018 that the business had made US$ 3.3bn in revenue during 2017, the overall profit was a far more (comparatively) modest US$ 117mn.

The achievement of over US$ 1bn revenue in Q3 2018 alone has shown Airbnb’s capacity to achieve strong growth on growth. Just the same, even earning US$ 1bn per quarter in total revenue would still see profits far below US$ 3bn a year.

The specific reasons for slowing growth can vary from nation to nation, and from region to region, but a common factor is that the competitive advantage once enjoyed by Airbnb as a pioneer and disruptor has been challenged by pre-existing competitors who’ve caught up. Then there is the growth of similar businesses that have arisen, using the concept of ‘imitation is the highest form of flattery’ as a business model.

Making Room for Airbnb Locally

Airbnb’s fortunes in the Caribbean have been informed by its capacity to formulate agreements with governments that smooth the path for its operation within nations around the region. Among them, the Bahamas, Grenada and Dominica have seen agreements struck between local states and the San Francisco-based

company. Alongside MOUs at government level, Airbnb also signed one with with the Caribbean Tourism Organization in October 2018. Given the tensions that could easily arise between established and emerging accommodation providers, this move may be seen as a win-win for all.

Yet the statistics also show the complexity of Airbnb’s operations across a region with 30 territories. Though the Bahamas’ MOU did provide for the taxation of vacation home rentals on Airbnb, as of February 2019 the US Virgin Islands and Puerto Rico remain the site’s most popular destinations for travellers, with the Virgin Islands’ capital of Saint Thomas seeing a 600% increase in bookings over the past year.

Given the devastation faced by these two US territories, and other islands, due to Hurricanes Marie and Irma, all cheer the return of tourists in such sizeable numbers.

But the stats also show that those dreaming of an Airbnb partnership that would see the promotion and popularity of the platform spread evenly throughout the region may be waiting a long time indeed.

Yes, by almost every measure, Airbnb is still moving along nicely, but the distance between its previous projections and the current reality is growing, and it could have a substantial bearing on the future. An IPO has long been promised, but seen rumours of its date shift from 2019 to 2020 (and perhaps even further out). For those today looking to make bookings with Airbnb tomorrow, the changing

Earlier this month the South African government announced that it would take steps to regulate Airbnb within the nation. As well as the growing expansion of oversight by governments on Airbnb and similar disruptors, there are also a number of existing legal issues that have been tested — or are set to be tested — as a result of Airbnb’s rise.

Each jurisdiction and issue varies but the rights of tenants to sublet, and questions surrounding liability if someone is injured or killed when using an Airbnb accommodation, are common.

There’s no suggestion that Airbnb or anyone affiliated with it is breaking the law, but the 2017 case from the Turks and Caicos Islands that went all the way to the Privy Council in the UK and made global headlines is a key example of the many spot fires that Airbnb could increasingly face.

There’s growing consensus among many legal communities that the innovations Airbnb has brought about demand a rethinking surrounding property law and accommodation regulations. Given that the history of private property laws predate many nations within the Caribbean and around the world, pursuing quick and decisive reform in this arena is no easy task.

Though Airbnb’s founders saw a fortune made by their company’s role as a disruptor in the past, it’s increasingly clear that its future profitability will be deeply informed by the actions of the most traditional pillars in society: government, the legal system and market demand. Certainly Airbnb is a presence that’s set to stay in the Caribbean but it may find the future less accommodating.

Airbnb’s Caribbean and Latin America media departments were contacted for comment on this article but did not return enquiries in time before SBW publication.

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The star businessweek

APRIL 20, 2019

CARICOM

www.stluciastar.com

Widespread Fraud of CARICOM Skills Certificates

J

amaicans are the main culprits in an emerging illicit scheme of Caribbean nationals submitting fraudulent skills certificates to obtain the right to work in CARICOM countries, an issue likely to inflame anti-free movement passions to the detriment of an already struggling integration movement.

The details are contained in a confidential report obtained by The Sunday Gleaner which continues the decades-long trend of highlighting how the words of CARICOM leaders mean little as the follow-through with implementation remains “poor” and of “great concern”.

Up to 2018, some 168 fraudulent skills certificates were detected or seized in six CARICOM territories, according to the report prepared by the CARICOM Secretariat for the 48th meeting of the Council for Trade and Economic Development (COTED), to be held April 29-30 in Guyana. The report dated April 9, 2019 gives an update on the implementation of the CARICOM Single Market and Economy (CSME).

Jamaicans were holders of the false

documents in 167 cases. The other case involved a Guyanese.

NO ARRESTS

The bulk of the fake documents (148) were submitted in Trinidad and Tobago. Antigua and Barbuda, Barbados, Grenada, St Kitts and Nevis, and Saint Lucia were the other receiving countries.

No arrests were reported and, according to the CARICOM document, “investigations have also not revealed the source country(ies) of the fraudulent certificates”. COTED is due to approve a series of measures aimed at strengthening verification and investigations.

The skills certificate is part of a CARICOM law adopted by the 15-member bloc to allow nationals with certain skills to move freely and work in any of the participating countries without the need for a work permit. Ten categories of workers can benefit under the regime. Agricultural workers and security guards are in line to join.

Artistes, musicians, holders of degrees from recognised tertiary educational institutions, journalists/media workers, and sportsmen and women were the first five before the list was expanded to include nurses, teachers and workers holding specific categories of

According to CARICOM Secretary General Irwin LaRocque (pictured), qualified CARICOM nationals are broadening their access to employment opportunities within the region through the free movement regime. However, a new study shows abuse and defrauding of the system is widespread and must be addressed.

vocational qualifications.

But like many CARICOM agreements, the skills certificate regime has suffered from a poor record of implementation.

“An assessment of the status of implementation of all 10 categories provided results which are somewhat alarming, as there are only three member states that have covered the first 10 categories in their legislation,” the CARICOM report said, pointing to Grenada, Guyana and Jamaica. Most of the other states cover the first five categories.

Barbados’ excuse is that it has tabled amendments in its parliament, but with no end in sight for their passage. Dominica, St Vincent and the Grenadines, and Suriname have only added nurses and teachers, refusing to consider the full five additional categories.

The CARICOM Secretariat said some member states have claimed other reasons for their failure to implement. Antigua and Barbuda, Belize, Dominica, St Kitts and Nevis, and Suriname have argued that they lack the technical and vocational education and training (TVET) capacity and so cannot certify Caribbean vocational qualifications.

Some countries have also claimed they lack capacity to draft the new domestic legislation.

But the CARICOM Secretariat has undercut those arguments, saying significant assistance was provided to member states under the Canada-funded CARICOM Trade and Competitiveness Project and the CARICOM Education for Employment Project.

Trinidad and Tobago, meanwhile, was singled out in another report for maintaining a requirement that CARICOM nationals who have a skills certificate from another CARICOM country must obtain certification from the twin-island republic’s authorities before being permitted to work there. That goes against a decision of CARICOM leaders that states should recognise the skills certificate issued by another state.

Part of Trinidad’s problem is that it only recognises the first five categories of workers and treats nationals skilled in the other five areas as visitors. CARICOM said in January 2019 that it received a complaint

that “indicated that a skilled national with a skills certificate issued by Saint Lucia in the category ‘university graduate’ was made to apply for a skills certificate issued by Trinidad and Tobago. During that period, the skilled national was not allowed to work and was not processed by immigration for indefinite stay”.

Frustrations abound on a wider scale, however, over the pace of implementation of all sorts of agreements, especially those relating to free movement, which Jamaican Prime Minister Andrew Holness, immediate past CARICOM chairman, has argued is one of the areas in which citizens of the region need to feel tangible benefits.

Holness, whose stint as chairman covered the last half of 2018, together with the Barbadian leader, Mia Mottley, pledged a revival of the integration process. The latest report, though, makes clear that almost a year later, “progress on implementation action to date remains poor, and the credibility of individual member states and of the Community with respect to implementation continues to be at risk”.

But this 2019 report, though acknowledging some advances, says ‘merit’ mention, like some states’ removal of visa requirements for Haitians, is hardly different in language to one in 2016 that formed the basis for the declaration of a review of the CSME. Leaders had since committed themselves to an implementation plan that included a short-term time frame (up to six months) which ended in January 2018 and a medium-term (up to 1.5 years) which expired in January 2019. The long-term time frame (up to 2.5 years) is set to end on January 31, 2020.

With a poor record so far and the final deadline nine months away, the Secretariat has been forced into bilateral discussions with member states, hoping to give Chairman Dr Timothy Harris, the prime minister of St Kitts and Nevis, some positive news to report at the July conference of regional leaders.

Originally published in the Jamaica Gleaner

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