24 June 2008

Some dire predictions for future of Caribbean tourism

The future of tourism in the Caribbean -- the regionÃ¢â¬â¢s economic cornerstone drawing more than 15 million visitors a year -- is threatened by soaring airline ticket prices and a sinking US economy, observers say.

"Billions of dollars of investment are being exposed and thousands of jobs are being exposed," Allen Chastanet, chairman of the Caribbean Tourism Organization, told the AP.

The Caribbean is particularly vulnerable because one foundering airline, American, controls much of the market Ã¢â¬' carrying more than 60% of passengers traveling through Puerto Rico last year.

American now expects to cut daily flights out of Puerto Rico's capital from 93 to 51 in September. There will be no more flights to Santo Domingo, Antigua, St. Maarten, Aruba and Samana in the Dominican Republic, spokeswoman Minnette Velez said.

Fewer flights to Puerto Rico also could also jeopardize the island's cruise ship industry. Ten cruise ships used Puerto Rico as their home port last year but its questionable that will continue if cruisers cannot get airline tickets.

Rather than raise ticket prices so high that they're beyond the reach of most customers, American has decided to cut flights and reduce capacity, Ms Velez said. "Traveling would be completely inaccessible if we increase fares as oil prices rise," she said.

American is not the only airline to cut back. Spirit Airlines recently said it would close its San Juan hub, and Continental Airlines expects to soon announce destination and flight cuts.

The Caribbean is still affordable for wealthy travelers, but resorts "that appeal particularly to price-sensitive families are in a world of trouble," said Christopher Hart, a professor at the Cornell University School of Hotel Administration.

Report by David Wilkening