Update Country Report Curaçao 21 Mar 2019

Event

According to the Curaçao Tourist Board, tourist arrivals rose by 20% year on year in January, with stopover arrivals totalling 44,151, up from 39,735 in January 2018. Cruise arrivals also grew strongly, rising by 23% annually to total 120,361, with 51 ships visiting the island.

Analysis

Tourism figures are increasingly robust as the sector continues to diversify away from reliance on Venezuelan tourists and increases its marketing outside the Caribbean. In January arrivals from North America rose by 14%, while arrivals from South America increased by 24%. The latter was supported by an increase in arrivals from Venezuela, which is unlikely to extend into the remainder of the first quarter, given the closure of maritime and aerial borders between that country and Curaçao.

The strong growth in January comes on the back of a steady 8% increase in arrivals in 2018, with arrivals from North America posting the highest growth, rising by 18% annually. Conversely, arrivals from South America fell by 4% on the year, driven by a sharp decline in Venezuelan tourists. At the end of the year, overall arrivals grew by 17% annually in December, boding well for 2019.

Indeed, growth from North American and European markets is set to continue. This is supported by an increase in flight routes to Curaçao. In 2018 US carriers JetBlue and American Airlines added new flights to the island. In addition, several new airlines have begun operating Curaçao routes, filling the gap left by the Curaçao-based airline InselAir, which had been experiencing financial difficulties for several years and ceased operating in February. Colombian airline Wingo began operating in Curaçao in early 2019 and Jet Caribbean is looking to take over some of InselAir's previous routes.

As the tourism industry shifts its focus to the North American market, the island will improve its facilities to draw more visitors. In February the Curaçao Tourism Development Foundation (CTDF) renewed a partnership with Airbnb, a US hospitality company, to expand rental options. Meanwhile, the CEO and managing director of the CTDF, Paul Pennicook, has stated that over the next year the island plans on expanding its hotel occupancy capacity, adding 1,000 new rooms.

Impact on the forecast

Improving tourist arrivals will provide some economic support for Curaçao, although it will not compensate for downturns in the manufacturing sector, led by lower activity at the Isla oil refinery. We maintain our forecast for subdued real GDP growth in 2019.