The Washington Diplomat / May 2007
By Larry Luxner
A new law that aims to protect the United States from terrorists may inadvertently cost the Caribbean hundreds of millions of dollars in lost tourism revenues, while specifically helping Puerto Rico and the U.S. Virgin Islands.
That's the assessment from tourism officials in at least a dozen Caribbean island destinations who are concerned about the long-term effects of the U.S. Western Hemisphere Travel Initiative (WHTI).
Under WHTI, which took effect Jan. 23, all U.S. citizens re-entering the United States via air — including those returning from Canada, Mexico and the Caribbean — now need valid U.S. passports, when previously a driver's license was enough.
For now, cruise-ship passengers are exempt from the ruling but will require passports by June 1, 2009 — as will American citizens driving back into the United States from Canada or Mexico.
Hugh Riley, marketing director at the Barbados-based Caribbean Tourism Organization, said that since the new regulations went into effect, news of the passport requirement seems to have reached "large numbers" of prospective travelers.
"Some observers credit the Caribbean's tourism authorities, a network of Caribbean-producing travel professionals and the media for giving wide coverage of the issue," said Riley. "A number of popular winter destinations which are not affected by the passport requirement like Hawaii, Puerto Rico, the U.S. Virgin Islands and South Florida do not appear at this early stage to be seeing any big boost in tourist arrivals."
He added: "The cruise industry, which is also unaffected by the immediate need for cruise passengers to have a passport, is widely reported to be having a soft season.
"There is, however, a backlog of passport applications — leading to an extended waiting period to obtain a U.S. passport. This could be a result of consumers not planning early enough for their vacations and then finding out that a passport is required. Undoubtedly, this will have an adverse effect on travel to the Caribbean if prospective vacationers have to delay their trips or choose alternate destinations."
The Bahamas Ministry of Tourism says WHTI will cost the country 233,000 visitors, 1.37 million visitor nights and $278 million in visitor revenues in 2007 alone.
According to a study commissioned by the Puerto Rico-based Caribbean Hotel Association, some 86.6% of all visitors to the Bahamas are U.S. citizens — the highest percentage of any country in the Caribbean, and even higher than the proportion of U.S. citizens traveling to Puerto Rico (86.1%) and the U.S. Virgin Islands (85.4%).
"On the surface, this decision may be seen as yet another valid security enhancement to protect U.S. borders. However, it does impose a significant economic hardship for several Caribbean economies, which depend heavily on U.S. visitors," says the CTO.
"This movement in traffic and need to get U.S. visitors to apply for passports is not a temporary situation. Instead, it is a permanent change in traffic and market potential for Caribbean destinations that have previously enjoyed a freer flow and larger potential market of U.S. visitors."
The State Department estimates that only 27% of Americans currently have passports. And some people might be dissuaded by the hassle and expense of applying for a passport, which now costs $67 ($52 for children under 16). That doesn't include the $30 execution fee or $15 photo fee.
Indeed, that's exactly what Puerto Rico and the U.S. Virgin Islands are banking on.
Passports aren't necessary to visit either destination — a fact both territories are touting in their latest ad campaigns.
"Today's travelers are looking for convenient and hassle-free vacations that allow them to escape from their hectic daily lives," said Terestella González Denton, executive director of the Puerto Rico Tourism Co. "Puerto Rico's exemption from the new passport regulation allows travelers to easily pack up, leave their hometowns and explore our beautiful island."
To get tourists to do just that, the PRTC is spending $36 million on its latest advertising blitz, which features the slogan "Leave your passport at home — travel to Puerto Rico now!"
Similar tactics are being pursued by the Virgin Islands Hotel & Tourism Association which has created "No Passports Required" promotions, including a special logo and substantial discounts on tour packages.
According to the Virgin Islands Daily News, the territory's Department of Tourism didn't begin mentioning the passport exemption in its paid advertising until late January. That's partially because until October, former Tourism Commissioner Pamela Richards had been locked in a regional dilemma when she served as chairwoman of the CTO, which lobbied hard against the new passport requirements.
Caribbean tourism officials say that law could jeopardize as much as $2.6 billion in tourism revenue and 188,000 jobs throughout the region, particularly when it comes to last-minute travel or budget-conscious Americans.
Yet the WHTI won't have much impact on destinations like Martinique or Cuba, which get relatively few American tourists — or other islands such as Anguilla, Curaçao or the Turks and Caicos, where the Americans who do visit already have passports.
"Thus far, this has not been an issue for us, as most of our visitors are high-end seasoned travelers who hold passports," said Caesar Campbell, executive director of the Turks and Caicos Hotel & Tourism Association.
"Aruba is very happy to report that the island has not seen any negative fallout" from WHTI, added Cristina Rivas, associate vice-president at Quinn & Co., the New York-based PR firm that has the Aruba tourism account.
"We conducted a Q&A with the island's travel partners to gauge how business was impacted and heard across the board that Aruba was doing just fine despite the new travel initiative," she said. "In fact, we heard in some cases, cancellations were down in the first two months of 2007 and that business to Aruba had seen year-over-year growth."
At the other end of the spectrum is Jamaica, which could suffer a double whammy because 73% of its foreign tourists are Americans, 80% of whom don't have passports. That puts 58.4% of total "visitor exports" to Jamaica in jeopardy, according to the CHA study.
To combat that effect, the Jamaica Tourist Board has launched a program encouraging U.S. citizens to get their passports by rewarding vacationers who make Jamaica their first visit with their new passport. These include special credits while on the island equivalent to the cost of obtaining a passport.
Other destinations in trouble, says the CHA, are the Cayman Islands, where an estimated 40.5% of arrivals could be affected; the British Virgin Islands (32.2%), the Bahamas (21.7%) and St. Kitts & Nevis (20.4%).
Canada has also lobbied hard against the WHTI, which will require passports for all Americans crossing by land into Canada and Mexico by June 1, 2009, at the latest.
Michael Wilson, Canada's ambassador to the United States, says he agrees that security is of great importance, but he's concerned that WHTI will interrupt legitimate commerce and travel.
At least 70% of the $1.6 billion in U.S-Canadian trade is transported over the border by truck. That translates into more than $1 million per minute. That trade could be significantly slowed down if truckers must apply for passports and present them each time they cross the long border between the two countries.
"First, we need transparent Canada-U.S. consultations to plan out how WHTI will be implemented at our joint land border. Second, we need to consider whether we can use commonly held documents as alternatives to a passport. Since the vast majority of travelers are welcome visitors, let's do this in a user-friendly manner," said Wilson.
"Third, we need a robust economic impact analysis to be completed on the WHTI land border implementation that maps out the economic consequences for U.S. travel and tourist industries, particularly in the implementation phase. Finally, we need a comprehensive and well-planned communication, marketing and distribution plan to explain WHTI requirements to our stakeholders and again, do so in a user-friendly way."