Update Country Report Curaçao 16 Aug 2018

Event

Tourist arrivals grew by 10% year on year in June, the second consecutive month of arrivals growth.

Analysis

This indicates that the tourism industry is now entering a recovery phase as the sector attempts to move itself away from reliance on tourists from Venezuela. Total arrivals in June reached 30,820, up from 27,958 in June 2017. A rise in arrivals from the Netherlands is driving this growth, with visitors from the Netherlands growing by 18% in June, to reach more than 12,000 for the first time. The Netherlands' position as Curaçao's main tourism source market has been bolstered by the addition of two direct flights between the countries. In addition, a new Brussels to Curaçao flight began operating in mid-June, leading to a 40% rise in arrivals from Belgium, albeit to only 467 arrivals. If extended beyond the summer holiday period, these new flights could provide a long-term boost to arrivals.

New flights from the US also encouraged more American tourism, with US arrivals rising by 28% in June, to 6,843 visitors. This is one of the highest growth levels recorded from the US market, indicating that sustained marketing efforts in the US are having some success. In particular, efforts to differentiate Curaçao from the rest of the Caribbean by emphasising its Dutch heritage appear to be encouraging more tourist interest.

Surging tourist arrivals in May and June mean that arrivals for the first half of the year are now showing overall growth of 2%. With the high season just beginning, these figures bode well for a good performance by the tourism sector in full-year 2018, following a weak performance in 2017 as the industry struggled to adapt to the sharp drop in arrivals from Venezuela. The rise in arrivals is likely to encourage more investment into the sector, both in terms of more flights and also hotel development. Such benefits are likely to be felt in 2019, with limited impact on economic activity in 2018.

Impact on the forecast

We maintain our forecast for slow real GDP growth in 2018, before a slightly broader recovery in 2019.