Update Country Report Curaçao 11 Jun 2018

Event

Tourist arrivals to Curaçao fell by 1% annually in the first four months of the year, signalling that the island has yet to recover from a tourism slump experienced since 2017.

Analysis

Overall tourist arrivals in the January-April period totalled 142,733, down from 144,274 in the same period in 2017. Tourist arrivals declined particularly in April, falling by 8% year on year. This decline was driven by a sharp drop in visitors from neighbouring Venezuela, as a result of that country's ongoing economic and political turmoil. If Venezuelan tourism were stripped out, cumulative arrivals would have risen by around 5% in the first four months.

Visitor arrivals from Curacao's main source markets, the US, which represents around one-fifth of visitors, and Europe, which accounts for a little more than one-half of visitors, performed well. Arrivals from North America rose by 8% in the first four months, with those from the US growing by 10%. Arrivals from Europe grew by 4% and arrivals from the Netherlands in particular (which accounted for 46% of total) were strong, rising by 9%. Steady growth from these source markets will offer some encouragement for the government, which is aiming to diversify tourism away from a dependence on Venezuela.

Moreover, a surge in cruise arrivals will also provide some optimism, with cruise arrivals soaring by 66% in the first four months of the year, to 392,792. This reflects Curaçao's ongoing investment in tourism infrastructure, with a new cruise mega-pier opening in 2017. Cruise arrivals have also helped to bolster tourism revenues, which totalled USD213.6 million in the first four months of the year, with 47% of this generated by European tourists.

A decline in Venezuelan tourism will continue to impact Curaçao in 2018, although the statistical effect should pass through by the end of the year. Nonetheless, real GDP growth will be constrained in 2018, especially as regional competition for tourism revives as those islands affected by hurricanes in September 2017 begin to open for business again.

Impact on the forecast

We maintain unchanged our forecast that real GDP will grow by 0.2% in 2018 and 0.9% in 2019.