Troubling News for Tourism-Dependent Nations

• Fitch Solutions expects tourism growth in the Caribbean region to slow in 2024, after experiencing a solid two-and-a-half years of growth after the end of Covid lockdowns.
• Historically, tourism has been a major contributor to the GDP of Caribbean economies. As of 2021, Statista reported that travel and tourism brought in US$39.3Bn towards the Caribbean GDP, approximately 12.5% of the overall Caribbean GDP, with the largest tourism markets being the Dominican Republic, followed by Cuba, Puerto Rico, the Bahamas, Jamaica and Aruba.
• Some of the smallest island economies in the regions, such as those belonging to the Organisation of Eastern Caribbean States, are even more reliant on tourism, with travel and tourism contributing more than 40.0% of GDP in places like Antigua and Barbuda, St. Lucia, Anguilla, the British Virgin Islands, St. Kitts and Nevis and Grenada. 
• The expected recession in the United States which is expected to begin in Q224 will lower demand for Caribbean tourism, dragging down growth across the region. The strong reliance on tourism makes these markets exceptionally vulnerable to any shocks, as was demonstrated in 2020-21.
• This in turn will drive down growth across the region, as US tourism is a major driver of growth in most markets. There is likely to be a region-wide slowdown from 2.2% in 2023 to 1.7% in 2024. 
• Beyond 2024, given the anticipation for the US recession to be short and relatively mild, Fitch expects a rebound driven in part by the tourism recovery; and sees regional growth at approximately 2.4% (2023-2028).

(Source: Fitch Solutions)