Country Report St Maarten March 2011

The region: Weak US and UK demand will continue to affect tourism

Following a sharp decline in 2009-and only a muted improvement in 2010-earnings from the tourism sector, the region's main source of employment and foreign exchange, will remain weak in the outlook period as demand remains modest (owing to still-high unemployment levels in source markets) and prices are cut to attract visitors. This will continue to weigh on domestic employment, tax revenue and foreign-exchange earnings. Tourist arrivals are expected to benefit in 2011 only from a statistical rebound, with a more meaningful recovery remaining elusive until 2012 at the earliest. Fuel prices will remain high, with negative implications for both airline and cruise travel costs, further constricting fragile tourism demand. Many investments in the tourism sector have been put on hold and there are few signs of renewed investor appetite owing to continued financing constraints, further reducing employment opportunities.

© 2011 The Economist lntelligence Unit Ltd. All rights reserved
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