Following an extremely challenging period for the region's key tourism sector in the wake of the global financial crisis—which resulted in sharp reduction in arrivals and spending from crucial markets such as the US and UK—there were continuing signs of a tepid recovery in most countries in the first nine months of 2010. However, according to the most recent country-specific data from the Caribbean Tourism Organisation (CTO; which covers varying time periods and is not yet available for all countries), performance continued to be mixed and varied widely from country to country. Furthermore, although most countries posted year-on-year increases in tourist arrival figures, this performance reflects very weak bases of comparison and in most cases arrivals remained below pre-2009 levels. Tourism earnings data are also not readily available for most countries, complicating any analysis of sector recovery (lower hotel and airfare prices have attracted increased numbers of tourists in many markets, but earnings are thought to have remained weak as a result of these incentives).

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According to available data, stopover arrivals remained lower in Grenada, Montserrat, St Vincent and the Grenadines and Trinidad and Tobago. With the exception of Trinidad and Tobago, the larger Caricom countries fared relatively well, with stopover arrivals to the Bahamas (up 6.4% year on year in the first seven months of 2010), Barbados (up 7.3% year on year in January-October) and Jamaica (up by 4.2% year on year in the first eight months of 2010) posting some of the strongest increases in the English-speaking Caribbean. The increase in arrivals to Jamaica was attributed mainly to continued sharp discounting by airlines, hotels and tour operators (which will have a marked negative impact on the sector's profits), as well as higher arrivals from Canada, which rose by nearly 8% year on year during the period following an intensive marketing campaign. US arrivals rose strongly in all markets except Bermuda (down 3% in the first nine months of the year), Grenada (down 11% year on year in January-July) and Montserrat (down over 20% in January to March), but this was mainly owing to a low base of comparison; overall, US arrivals remained below pre-2009 levels in most countries. Nonetheless, US arrival figures posted strong recoveries in Anguilla (up 17%), Barbados (15.5%), Curaçao (40%) and Saint Lucia (38%). The return of US tourists is an encouraging sign for the region's tourism sector, which relies on the US as its main tourism market.

Following a year of strong growth in cruise passenger arrivals in 2009—mainly on account of deep price reductions—data for 2010 show a marked reversal in several markets. Arrivals fell by over 7% year on year in Jamaica (January-August), by over 17% in Curaçao (January-September), and by 14% in Trinidad and Tobago (a very small cruise market). Sharp declines were also observed in several countries in the OECS (arrivals to St Vincent and the Grenadines fell by nearly 31% in January-August, to Antigua-Barbuda by over 25%, and Grenada by 7.2%). The number of arrivals in Saint Lucia stagnated. Dominica posted year-on-year growth of 3.5% in cruise passenger arrivals in January-October. The Bahamas (the most visited cruise destination in the Caribbean), Belize and Bermuda have all posted strong year-on-year increases in cruise arrivals, mainly reflecting changes to cruise ship routes during the period and continuing deep discounts on cruise packages from the key US market.

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The outlook for a recovery in tourism sector earnings remains precarious in 2011 despite our expectation that arrivals numbers will rise markedly in year-on-year terms in some key markets. With traditionally higher-spending UK arrivals set to remain weak—and worsened by the implementation of the UK Air Passenger Duty (APD), which will result in higher airline ticket prices to the Caribbean—US and Canadian arrivals will rise, but will not boost overall tourism sector revenue strongly enough to spur a meaningful recovery in the short term. Any significant improvement in arrivals figures in 2011 will be owing primarily to continuing base effects and further discounting by hotel and airline operators.