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Travel & Tourism As A Driver Of Economic Development In Jamaica
Tourism has increasingly become the primary supplier of foreign exchange to the Jamaican economy as remittance inflows and bauxite earnings experienced a major set back as a result of the global economic crisis.
Tourism is widely considered to be a key driver of the Jamaican economy. The sector plays a strong role in generating taxes, employment, income and foreign exchange inflows. Given its linkages with other production sectors, it impacts a wide cross-section of the economy.
Since the advent of tourism in Jamaica, the sector has received incentives to attract local and foreign direct investment. The Hotel Incentives Act of 1968, the Resort Cottages Incentive Act of 1971 and the Attractions Incentive Regulation have all played a major role in the development of the sector, with the addition of almost 5,000 rooms and employment growth of 19% in the accommodation sector between 2000 and 2010. Visitor arrivals also increased by 45% over the last decade, allowing tourism to contribute between US$1.3 and US$2 billion annually to the local economy.
However, the sector is currently under scrutiny in terms of the value of its contribution to the local economy. This is in reference to the tax relief it receives through incentive packages compared to other sectors, which are currently under review by policy makers. The disparities across target incentives to investments in particular economic sectors are undergoing imminent reform as part of the overall economic development strategy for Jamaica and to help meet the revenue demands of the country’s budget.
In light of this, the Jamaican Hotel & Tourist Association (JHTA) commissioned this study to explore how tourism compares with other sectors in terms of its potential to drive economic development. Whilst the JHTA recognizes the need for tax reform, it wishes to show the appropriateness of supporting tourism as a driver of economic progress.
The research includes two main parts. The first is a statistical, quantitative analysis of the economic role of the tourism. The second is more qualitative set of viewpoints gleaned from consultations with stakeholders within and outside the tourism sector to identify the key strengths and weaknesses of the tourism sector. From these research bases, we conclude with a summary of findings and their implications on how public policy and private sector strategy can best capitalize on the economic opportunities presented by tourism in Jamaica.