Belize~ Analysis of Belize Tourism Report 2016

By Richard Harrison: The Belize Tourism Board (BTB) is a statutory body under the Ministry of Tourism.

“Within the Belize Tourism Board Act, Chapter 275 of the Laws of Belize Revised Edition 2011, the Board is a selected group appointed by the Minister of Tourism, with the mandate to manage, protect and develop the Belize tourism industry.” ~ BTB website

Nowhere in their mandate says that they should report….which is perhaps the reason why they do not publish annual audited financial statements on their website….they only publish what they call Belize Travel and Tourism Digest.

In 2008, the total overnight visitors was 245,000; and expanded to 385,000 by 2016….a growth of 57% or average of 6.33% per year.

Cruise arrivals in 2008 was 597,000; and increased to 1,000,000 by 2016. ….a growth of 67% or average of 7.44% per year.

Total tourism receipts were estimated at BZ$563 million in 2008…and BZ$819 million in 2016….a growth of 45%….or around 5% per year.

Although cruise arrivals are 2.6 times the number of overnight arrivals, they only contribute around 15% to the total estimated tourism receipts of BZ$819 million in 2016….which would be around BZ$123 million….or only BZ$123 spent per cruise ship visitor….while an overnight customer will spend on average around BZ$1,800….as they average 6 days stay. For comparison, the cruise tourist average spend in Cozumel is BZ$238, Cayman Island is BZ$230, Bahamas is BZ$165 and Jamaica is BZ$238….and they all get a lot more cruise tourists than Belize. Belize needs to significantly increase the cruise tourist spend, by learning from these other leading destinations.

77% of overnight tourism arrivals came through the Phillip Goldson International Airport (PGIA)….which is 295,000 persons. Thus, if departure fee of BZ$78.50 per person is collected….a total of BZ$23 million is collected….which is broken down into BZ$8.79 million passenger fee, BZ$10.55 million airport development fee, BZ$2.2 million P.A.C.T. fee and BZ$1.46 million screening fee. This entire set of operations need to be audited annually and the financial statements published in the Belize Airport Authority website in timely fashion.

The private firm managing the PGIA is making a whole lot of money, and not investing at the rate they should in the scale and scope of the PGIA potential. European travel to Belize is only 11% or around 42,000 visitors…and the principal bottleneck is that there are no direct flights to Belize from Europe…if this constraint is resolved in the short term, overnight tourism growth could reach as high as 10% per year, with better quality of European visitors.

It is notable that USA citizens continue to account for the lion’s share of Belize visitors, with 66% of total, or around 250,000 in 2016. Europeans and Canadians follow with 11% and 5.7%, respectively…..however, Canadian visits have decreased significantly from 26,400 in 2014 to 21,867 in 2016…..the extravagant hoopla that BTB spent on in Canada seems to be having counterproductive effects. Trade shows can be a dangerous gamble, if only inexperienced, partying kids are sent to do the work of mature investors and professional business development managers.

Of significance is that Belizeans living abroad increased their visits from 8,800 in 2008 to 14,900 in 2016….a growth of 69%.

Belizeans at home contribute to around 15% of total tourism receipts.

So, Belizeans already play an important role in the stability and growth of the tourism sector….however, this segment can grow much more rapidly if the national economy was growing at a faster pace. Belizeans are already the biggest marketers of Belize tourism….word-of-mouth and digital media and advertising/selling channels are of significant importance to Belize tourism marketing….the news from Belize and the things that occupy the minds of Belizeans….which is what they express…must become more good and attractive.

While entry at the western border only increased slightly since 2008, arrivals at the northern border has increased from 23,800 in 2008 to 40,300 in 2016….a growth of 69%….which could mean that the Riviera Maya and Mexico is becoming a more important source of our tourism arrivals. There are many Belizeans working in the Riviera Maya now, and their important role needs appreciation, enhancement, expansion and investment. Linkages with hotels, tour operators and travel agents in that region needs to be deepened and broadened.

The general impression is that Americans travel to Belize mainly to run away from the winter….which is the traditional explanation for our high season being between December and March….and our slow season between August and October. Yet, when you look at the USA origin of the visitors, around 50% come from southern states. Thus, while the “sea, sun and sand” seekers are important, people are travelling to Belize for reasons that are obviously other than “coming in from the cold”.

56% of visitors were under the age of 35….and student travel to Belize increased from 34,000 in 2014 to 57,000 in 2016…..and increase of 67% in 3 years. The networks of Education First, G Adventures, Intrepid and others bringing Christian charity, veterinary and medical/nursing students are making their impact…and should continue to grow exponentially.

Indeed, this growth of 23,000 students from 2015-16 accounts for around 50% of the total tourism growth recorded that year….and at this early stage of development, student travel accounts already for 15% of total overnight tourism. Student travel is going to become much more important over the next five years.

The visit for military purpose stands out….with increase from 2,200 in 2014 to 3,900 in 2016….a growth of 77%. This needs to be better understood for its tourism and national security implications.

These numbers indicate that inland tourism has taken over island tourism. Belize City, San Ignacio and Placencia lead the way currently…but the entire inland Belize is ready for rapid tourism growth.

Of all the registered hotels in Belize, 63% are inland….63% of rooms available are inland….and around 60% of beds. 77% of registered tour guides are inland….and so are 73% of tour operators.

Of the visitors who declare themselves as managerial or professional level, the numbers increased from 64,000 in 2014 to 122,000 in 2016…..a 90% increase in 3 years….which is a sign that there is an increase in higher-end visitors coming to Belize.

The male to female ratio of visitors is almost equal…with 178,000 females and 177,000 males visiting in 2016.

Tourists staying in guest house/hostel accommodations increased from 5,500 in 2014 to 20,500 in 2016….an increase of 272%….which is an important growth to be understood, although it accounts for only 5% of total Belize arrivals currently.

The primary references where tourists get information about Belize is first from friends…and then from the internet….which means that visiting tourists should be encouraged and rewarded for promoting Belize to their friends and contacts…and online marketing efforts need more development investments.

Around 20% of tourism visitors are return customers….these people need to be identified and better understood….and rewarded.

Daily expenditure for overnight tourism visitors is estimated at US$150 per person per day.

In terms of customer review, domestic transportation and value for money are the two measured parameters with lowest score, with 65% good, 30% average and 5% poor.

65% good value for money should not be satisfactory….Belize needs to become a lot more competitive….in cost…in quality of facilities…and in public and private services.

The number of hotels increased from 620 in 2008 to 861 in 2016….a growth of 39%. While the number of rooms increased from 6,539 to 8,212….or 26%, for the same period.

Occupancy averaged 21% during the slow months of September to October and peaked at around 56% during February to March.

73% of hotels were less than 11 rooms….while only 1.7% of hotels were more than 50 rooms. Belize is poised for a couple major international hotel brands, which will bring the kind of marketing capacity and capability the likes of Sandals in Jamaica.

The average room rate per day rose from BZ$226 in 2008….to BZ$294 in 2016. This would suggest that the BTB takes in around BZ$35 million from hotel tax of 9% alone….it also takes in around 40% of the estimated BZ$14 million collected from cruise tourism head tax, or BZ$5.6 million in 2016. Along with other sources of revenue, the BTB can be estimated to have taken in revenues of around BZ$45-50 million in 2016. This amount of money needs to be audited annually, and the financial statements published on the BTB website in timely fashion.

If the average spend per day for overnight tourist is BZ$300…and the average room rate is BZ$294…and assuming two occupants per room average…then the average tourist spends only BZ$153 per day on food, entertainment, transportation, tours, gifts, etc. This needs to be taken into consideration in designing and pricing these non-room offers.

The number of tour guides increased from 976 in 2008….to 1945 in 2016. The number of tour operators also increased from 222 in 2008 to 409 in 2016. This segment can benefit from greater creativity and innovation…improvement in scale and scope of offers…increase their pre-arrival advertising, promotion and sales via online channels…with less direct competition and more cooperation and coordination for better pricing and profitability.

Belize tourism is growing faster than the rest of the economy….so Belize tourism looks good compared to the 600,000 visitors to Guatemala expected this year, which will be a 10% growth…..but is still very small when compared with the Mexican Riviera Maya 4.7 million visitors and 90% hotel occupancy in 2016.

The views expressed in this article are those of the writer and not necessarily those of Breaking Belize News.

This article was written by Richard Harrison, Belizean investor in production and services businesses in Belize. He holds a Master’s in Business Administration degree from Lancaster University.