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1. INTRODUCTION
Current forecasts continue to predict the unfettered growth of global tourism, and the
expected developmental gains for poor countries, without adequately considering the range of
developmental issues that will accompany such growth. Most naive predictions also fail to
recognize that pro poor benefits and development are not automatic consequences of the growth
of tourism.
This paper explores how tourism development can go hand in hand with development for
the poor in local communities. Section I constitutes a theoretical exploration of the prospective
role of the tourism industry in local economic development and how tourism businesses, in
exercising Corporate Social Responsibility and sound business practice, can increase the
opportunities for poor people to directly benefit from the tourism industry.
Section II focuses on the issues of tourism, Corporate Social Responsibility, local
economic development and pro-poor growth in Jamaica. Here the analysis is focused around
studies of the impact of the accommodation sector on local economic development. A case study
of one locally owned all-inclusive chain of resorts is also presented in order to ascertain the
practical prospects of, and challenges to, tourism led pro-poor development in Jamaica.
1.1 The Global Tourism IndustryGrowth in the services sector has been identified by the international development
community as one of the key targets for economic advancement in developing countries going
forward (Mashayekhi and Kidane 2006). The services sector includes so-called intangible goods
focusing on delivering content, attention, advice or an experience. The United Nations
Conference on International Travel and Tourism of 1963 provides a generally accepted definition
of tourists as temporary visitors who spend more than 24 hours in destinations other than their
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normal place of residence, whose journey is for the purpose of holiday-making, recreation,
health, study, religion, sport, visiting family or friends, business or meetings (UN 1963).
According to the World Travel and Tourism Council (WTTC), global tourism including
domestic tourism- is a US $3.5 trillion industry. The industry, directly or indirectly, is
responsible for employing some 10 percent of the worlds workforce and contributing
approximately 11.5 percent, directly or indirectly, to the Gross Domestic Product of the world
economy (Jayawardena 2007 and Sharpley 2002). Prospects for continued growth in global
tourism are strong, particularly for emerging markets (including China), youth travel, eco-
tourism and online travel services (PIOJ 2007). Although a slowdown is expected due to
worsening global economic conditions, the World Travel and Tourism Council (WTTC) predicts
that by 2010 the industrys contribution to world GDP will increase to 12.5 percent and employ
328 million people (WTTC 1998 in Jayawardena 2007). Indeed, global tourism is slated remain
one of the fastest growing industries worldwide.
1.2 Tourism and the Caribbean RegionThe share of global tourism belonging to developing countries is just about 30 percent.
Tourist arrivals are currently concentrated in five destinations: the United States, Italy, France,
Spain and the United Kingdom respectively (Jayawardena 2007). In spite of this, growth in
tourist arrivals is concentrated in developing countries. Sun, sand and sea are the dominant
images in the minds of tourists who have made the Caribbean the most sought after destination
for honeymoons and weddings in the world (CTO 2008). The most recent estimates from the
Caribbean Tourism Organization (CTO) indicate that the region was the destination of choice for
some 22.5 million tourists in 2007 - an increase of 1.5% over the previous year (CTO 2008). The
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(Jayawardena 2007). The all-inclusive hotel is the fastest growing category of accommodation in
the Caribbean (Travel Watch 2006). According to Zona and Zona-Paris (1999 in Jayawardena
2007), 48 of the best 100 all-inclusive hotels are in the Caribbean. However, the all-inclusive
hotel model is not popular in all Caribbean destinations as 17 of the 48 resorts are located in
Jamaica alone (Jayawardena 2007). The all-inclusive model warrants special attention given its
prominent position in the Jamaican tourism industry and will be discussed at length in sections to
follow. The main criticism of all-inclusive tourism is that visitors may spend little time
experiencing local offerings outside the hotel as most services are provided on the property.
Sun-lust tourists are those who are part of the mass market of visitors arriving in the
Caribbean primarily to enjoy the sun, sea and sand but unlike all-inclusive tourists they opt to
stay in traditional hotels, inns or guesthouses.
Although the mass tourism market in the Caribbean is predominant, alternative tourism
has been gaining popularity among seasoned travellers, both within the region and
internationally. Eco and special interest tourism includes sub sectors such as agro-tourism,
adventure tourism, sports tourism, heritage tourism, and health tourism (Jayawardena 2007:20).
Special interest tourists crave new experiences with a sense of adventure and action while
ecotourism is popular among well-educated, environmentally conscious travellers with more
disposable income than other categories of tourists. Alternative tourism is more conducive to a
community-based development approach it offers more opportunities for the inclusion of local
community members. Alternative tourism is offered as a more resource and environmentally
friendly form of development. Experts suggest that alternative tourism will play an important
role in the future viability of the Caribbean tourism product and as such, increased focus should
be put on more fully developing this area.
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1.3 Defining DevelopmentDevelopment and questions of what it means and how to achieve it assumed international
relevance following World War I. Today, development remains one of the most urgent issues of
our time, however no universally accepted meaning of what development means exists to date
(Clarke 2002). Development has been traditionally defined in terms of growth of the economy
an economy that achieves 5-7% growth in its Gross National Product (GNP) after having been
static for a long time is said to have achieved development (Todaro 2006:15). The economic
approach maintains that growth from the national economy will trickle down to the masses in
the form of employment and other economic opportunities, creating the necessary conditions for
poverty reduction and improvement in standards of living (Todaro 2006). It is a mainstream
economics approach that has generally been institutionalized by the World Bank in its World
Development Reports and is supported by many development economists (Clarke 2002). In their
view, problems of inequality, poverty, discrimination and unemployment are secondary to
getting the growth job done (Todaro 2006:16).
In the 1950s and 60s, many developing countries did achieve development according to
the economic definition, however, despite increases in GNP, the welfare of the masses in these
countries showed little or no improvement (Todaro 2006). This experience prompted the
broadening of the concept of development from a narrow focus on economics to a direct
emphasis on the advancement of people. The human welfare conception of development focuses
on people-centred growth and is institutionally represented by the United Nations
Development Programmes (UNDP) Human Development Reports (Clarke 2002:4). The Reports
define human development as a process of enlarging peoples choices...the most critical of these
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are to live a long and healthy life, to be educated and to have access to resources needed for a
decent standard of living (UNDP 1990:1).
People-centred development economists appreciate the need for overall economic growth
while understanding that on its own, growth will not necessarily improve the human welfare and
life chances of the masses (Clarke 2002). Economic growth is therefore not an end in itself, but
an instrument that can provide the capability to function (Sen 1998 in Todaro 2006). The
tourism industrys economic benefits are measured in quantifiable terms on a national scale
foreign exchange receipts, contribution to GDP, contribution to exports, tax revenue and national
employment levels (Sharpley 2002). However, tourisms contribution to development for the
poorcannot be measured as readily. In this study, I focus on how tourism businesses can extend
opportunities from the tourism industry to the poor in a way that directly enhances their life
chances and choices. The experience of development of the 1950s and 60s underlines the fact
that, ipso facto, economic growth does not directly translate to improvements in the welfare of
the poor. Pro poor growth can only happen when national economic growth increases the flow of
income from poor peoples assets orthe number of value of those assets (Roe 2006).
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2. CORPORATE SOCIAL RESPONSIBILITY AND DEVELOPMENT2.1 What is Corporate Social Responsibility (CSR)?
This paper will rely on the following definition by the United Nations Conference on Trade
and Development (UNCTAD): Corporate social responsibility concerns how business
enterprises relate to, and impact upon, a societys needs and goals (UNCTAD 1999:1).
Corporate Social Responsibility is frequently and mistakenly equated with corporate
philanthropy. The concept of Corporate Social Responsibility focuses on the operational
behaviour of a company and the implications of that behaviour for the society that the company
operates in (UNCTAD 1999). On the other hand, philanthropic activities are those that are
external to a companys business operations. A CSR program is thus defined as a codified
voluntary strategy involving operational procedures or activities through which the company
pursues objectives that benefit society.
The practice of Corporate Social Responsibility has become increasingly popular among
corporations worldwide (Contreras 2004). Experts cite a number of factors to explain the
proliferation of CSR globally. The main one has been widely identified as the need for the
corporation to decrease or buffer the perceived threat to its normal operation (Contreras 2004).
In a developing country context where national budgets are often strained, the corporation may
also be called upon by the community to provide basic services where the state is unable to. For
example several companies in Jamaica cite the need to respond to the increasing pleas of
communities for health and education related services, which should be the states responsibility,
as the primary reason for the creation and expansion of their CSR initiatives (Levy 2008).
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2.2 Can CSR Contribute to Development? The CSR Debate
The question of whether or not CSR can contribute to international development, and the
extent of such a contribution, is widely debated in the CSR and development literature. CSR
expert and author Michael Hopkins argues that CSR provides a platform for business to deepen
its involvement in development by making a concerted effort to improve the well-being of
disadvantaged people, wherever they may be (Hopkins 2007:2). Hopkins goes on to boldly
assert, CSR can untap the fortune from development (Hopkins 2007: xi). Companies,
international development organizations and governments, though perhaps not sharing the extent
of Hopkinss fervour, also make extensive claims regarding the benefits of CSR for development
(Blowfield 2007).
On the other hand, critics argue that CSR programs alter the role of business in society
orienting it toward goals that are beyond the realm of its expertise. One such critic is eminent
economist Martin Wolf, who argues that CSR is not only problematic but also dangerous (Wolf
2004). Wolf asserts that it is by strictly seeking out profit that business best contributes to social
and economic development (Wolf 2004: 10). This view is in line with the mainstream view of
development that aggregate benefits to a national economy will eventually trickle down to
benefit the poor.
In reality, there is scant evidence to support either Hopkins sweeping claims or those of
corporations and governments on CSRs alleged benefits for development. It has proven difficult
to measure the impact of CSR according to the recognized measures of the international
development community (Blowfield 2007). The gap between rhetoric and reality on the
developmental impact of CSR exists to a large extent because of a lack of understanding of what
development entails and how to design CSR strategies for development. This paper will show
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that, within the tourism industry, scope exists for businesses to, in executing their CSR,
contribute further to local development. For CSR to effectively contribute to development,
businesses should first be aware of the needs and goals of the society and then focus on how
aspects of their operational behaviour can be designed to positively impact upon those societal
needs.
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3. TOURISM, LOCAL ECONOMIC DEVELOPMENT AND PRO POOR
GROWTH3.1 Benefits of Tourism: The Theory
The tourism industry generates significant tax revenue for the Government, who, in a
developing country context, more than likely faces budget deficit issues. Tourism receipts also
provide a vital source of foreign exchange for developing countries. Foreign exchange is
beneficial to a developing countrys balance of payments and as a means of purchasing capital
goods and other essential imports (Sinclair 1998). Perhaps most important for many countries is
that tourism is a significant generator of local employment. The industry provides a crucial
source of income in the form of employment for women and low-income groups who occupy a
large share of tourism-related jobs (Puri 2007).
Given the economic benefits of a thriving tourism industry, many developing countries
target the sector as part of national development strategy. The sector is viewed as a viable focus
for further development, compared to other industries, for a number of reasons. Firstly, as
discussed in Section 1.1, global tourism is a growth industry. Though global tourism contributes,
in an economic sense, most to the countries that need revenue least, international arrivals to the
developed world have been increasing. The resulting income opportunity is viewed favourably
by developing country planners (Sharpley 2002). Second, tourism is viewed as a means of
redistributing wealth from rich countries to poor ones, not only by the spending of tourists but
through investments in infrastructure by developed country investors. As will be further
discussed below, the ownership structure within the industry will determine the proportion of
tourism receipts that are actually retained since foreign-owned tourism enterprises repatriate their
profits.
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Developing countries also pursue tourism for development because it allows monetary
value to be extracted from inherent national properties such as culture and natural resources and
attractions. These raw materials are basically free natural resources such as sand, sea,
mountains, culture etc. That is, the industry is seen to have low start-up costs (Sharpley 2002).
Tourism however, requires extensive supportive infrastructure such as roads, water and sewage
systems and electricity infrastructure. Where these did not previously exist, the start-up costs of
establishing tourism may be very high. Finally, tourism is viewed as a favourable path to
development due to its linkages and multiplier effects within the local economy, compared to
other industries. Not only does tourism development require that extensive infrastructure be
built, it is also a composite product involving several product and service opportunities that may
be taken up by local providers. In theory, local farmers could enjoy the economic benefits of the
industry by providing food to hotels and restaurants while local manufacturers could provide
furniture and finishes. The local construction industry could also benefit from the industry
through the erection and expansion of accommodations for tourists (Sharpley 2002).
Unfortunately, as will be discussed at length in this paper, without proactive policies the
potential income earning opportunities for local people and the poor may never become reality.
Hunziker and Krapf were the first to show that depending on the direction of tourist
flows, tourism could have both a positive and negative effect on national income (Mihalic 2002).
Tourism is an expenditure-driven economic activity, that is, the consumption of tourism is at the
centre of its economic measurement and it is consumption expenditure, of both domestic and
international tourists, that generates national tourism income. The final economic impact of
tourism on national economic growth will depend on how much was invested in tourism
development by public and private investors, that is, tourism expenditure in the host country, and
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the proportions of imported goods and services consumed by tourists (Mihalic 2002). If
investment in tourism dwarfs receipts from tourism there will be a negative effect on national
income while if tourists are predominantly sold imported goods and services, money will flow
out of the host economy to a foreign country.
The volume of outflows is determined in part by the import propensity of the host
country and the ownership structure of the tourism industry and associated industries. Outflows
are also determined by the maturity of the domestic industries and their ability to meet the
tourism industrys needs from domestic production (Mihalic 2002). The outflows are popularly
called leakages and reduce the economic and developmental impact of tourism. External
payments that never accrue to the host country, such as travel agent commissions and foreign
airlines also constitute leakages from the industry (Mitchell and Page 2006). Of particular note is
that the net retention of tourism receipts is especially low for countries with an industry
dominated by foreign investors or that have a high import propensity. Many developing countries
fall into one, or both, of these categories.
Tourism theory points to the indirect economic benefits that the presence of a healthy
tourism industry generates in terms of widespread multipliers throughout the economy (Sharpley
2002). As mentioned in Section 1.4, travel and tourism also creates markets for, in theory at
least, locals to become service providers in various areas. In addition, a thriving tourism sector
spurs other economic activities such as agriculture, fisheries, crafts and the manufacture of inputs
required to support the industry. The key issue is whether the stimulus of these industries is
created at the local level.
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3.2 Why the benefits of tourism may not extend to poor people
The direct and indirect benefits generated by the industry are said to constitute a
powerful engine for employment, poverty reduction and development (Puri 2007:3). The
tourism industry may indirectly benefit poor people through taxes paid to the government who,
with increased revenue, can finance welfare services and develop infrastructure that benefit the
entire community, including the poor. However, there is no guarantee that increased revenue to
the government produce such results. In large part, the tourism industry can spur local economic
development and pro poor growth directly only to the extent that members of the community,
including poor people can take up the income-earning opportunities arising from the sector. For
example, if a hotel, as a matter of policy, primarily employs individuals from outside the local
community or host country, the impact on the local economy is lessened. Another consideration
is whether or not local people, especially the poor, are trained and possess the necessary skills to
qualify for employment in the sector. Poor people in particular may not possess the human or
monetary capital necessary to take advantage of the opportunities to become employees within
the tourism industry.
The development contribution of tourism may also be limited by the ability of the local
economy to take advantage of the linkage opportunities that arise from the industry. A
developing country economy may not be at the stage of maturity or have enough diversity to
meet the quality or quantity requirements of the hotels on the consistent basis necessary. In
addition the scale or type of tourist development might not allow for local provision of goods and
services or there may not be enough investment available to finance their provision (Sharpley
2002). In such cases, tourism companies import heavily. Leakage of tourism receipts to outside
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the host country is perhaps one of the most significant factors affecting the extent to which
tourist development benefits the host country (Sharpley 2002).
It is clear that the growth of the tourism sector and indeed the economic growth of the
country, do not translate to an automatic improvement in the livelihoods of the poor. Strategic
policies are required to ensure that the bulk of the economic gains of the industry are not
concentrated in the hands of the local elite or foreign investors with little tangible benefits for the
local economy and the poor who constitute it. If tourism is to be a vehicle for human
development, of which economic growth is a necessary but not sufficient pre-condition,policies
must ensure that the industry effectively functions as a catalyst not only at the national, but also
at the local, community level (Tefler 2002).
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4. TOURISM INDUSTRY IN JAMAICA
Up to the middle of last century Cuba was regarded as the principal tourist destination of
the Caribbean (Seaga 2006). After the Cuban Revolution, development interests were sparked
elsewhere and Jamaica began to establish a reputation as a vacation paradise for the wealthy and
elite (Seaga 2006). Today, Jamaica is a well-known island destination with a strong brand based
on cultural and physical assets that continue to enjoy strong international appeal. In the 45 years
since the country achieved independence, the number of tourist arrivals to Jamaica has increased
more than tenfold (PIOJ 2007). Following four years of consecutive growth, the industry
recorded its best ever year in 2006 with total arrivals increasing by 15.3% to just over 3 million
visitors (approximately the size of Jamaicas population) (CDB 2007). Jamaica ended the year
2007 on par with 2006 despite several setbacks, the most significant of which was the
introduction of the passport requirement for US citizens.
4.1 Government Initiatives in the Tourism sector in JamaicaAs a pillar of the national development strategy, the tourism industry has been the target
of selected Government intervention since the 1970s (Chambers and Airey 2001). In recent
years, the development of the tourism sector has become an increasingly important national
priority and it is explicitly identified as a priority area of focus for Vision 2030 Jamaica: National
Development Plan (PIOJ 2007). The Government has created a number of agencies under the
Ministry of Tourism with responsibilities that include marketing and promotion, developing the
tourism product and implementing supportive industry policy (CDB 2007). A Master Plan for
Sustainable Tourism Development, developed in 2003, helps guide tourism development in
Jamaica. The sector development plan recommends not only expansion of accommodation
capacity, but initiatives to diversify the tourism product, increase and improve tourist attractions
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and the strengthening of linkages throughout the economy (CDB 2007). A Tourism
Enhancement Fee was instituted in 2005, charging US$10.00 to incoming airline passengers and
US$2.00 to cruise ship passengers, to fund the implementation of the Master Plan (CDB 2007
and PIOJ 2007).
The islands tourism industry has benefited from high levels of capital investment
concentrated in hotel expansion, from both local and foreign investors (CDB 2007). The
Government has undertaken wide scale infrastructural improvements to support the sector
including the upgrading and expanding of the road network, national airports and ports (CDB
2007). Public investment is also being channelled toward the spatial and planning needs of the
tourism sector including identifying skills and training needs, and the development of supporting
infrastructure such as housing and utilities (CDB 2007).
4.2 Characteristics of the Tourism Industry in JamaicaJamaicas tourism industry is centred around three main destination areas: Montego Bay,
Ocho Rios and Negril. Development in other areas of the island including the South Coast and
Portland are also taking place. The all-inclusive hotel is the main type of tourist
accommodation in Jamaica (Pennicook 2006). Research from the World Travel and Tourism
Council (WTTC) puts overall direct industry employment at approximately 8.2% of the labour
force (2008), while estimates indicate that each direct job creates an additional 2-4 indirect jobs
in the economy (Lengefeld and Stewart 2004). Together, the WTTC estimates that the tourism
sector is responsible for, directly and indirectly, employing some 31% of the Jamaican labour
force (WTTC 2008).
The Jamaican tourism product comprises an interlinked set of services that cater to
visitors and domestic travellers. A variety of public and private sector actors are involved in the
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manufacture and provision of these services including accommodations, tourist attractions, food
and beverage facilities, ground transport, in-bond shopping and arts and crafts (PIOJ 2007). The
cruise ship and airline industries are crucial aspects of Jamaican tourism. In 2007, approximately
41 percent of tourist arrivals were cruise ship passengers2. These 1.1 million cruise ship visitors
spent approximately U$114 million in Jamaica (JTB 2007). Although plans are now afoot to
divest the national carrier, Air Jamaica was owned and operated by the Government for a number
of years, at a significant loss, due to the view of its strategic importance for the national tourism
sector.
In 2007, tourists expenditure amounted to just over of US$1.9 billion in revenues,
equivalent to 20 percent of Jamaicas Gross Domestic Product (JIS 2008). This gross
expenditure represented a 2.1% increase over the US$1.871 billion spent in 2006 (JTB 2007).
The Government of Jamaica predicts growth of 14% in revenues for 2008 as plans continue for
expansion of this vital, lucrative national product (JIS 2008).
2 Calculated from figures provided by the Jamaica Tourist Board (2007)
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5. TOURISM BUSINESSES, CSR and PRO POOR TOURISM IN JAMAICA
5.1
Why tourism businesses in Jamaica should have a CSR Approach to Pro Poor Tourism
Poverty reduction is a clear need and goal of Jamaican society, particularly in rural areas.
Poverty is a multifaceted concept having to do with both lack of income and lack of access to
basic and essential services such as water, education, health services, sanitation and housing
(ICRT 2004). Pro poor tourism is defined as tourism that results in increased net benefits for
poor people (Roe 2006). The traditional mode of thinking on how tourism can address poverty
has been focused on the trickle down effect where the benefits of tourism are expected to
eventually improve the lives of the poor as gains diffuse throughout the economy. The UN
Millennium Development Goals have renewed the focus on poor people while the specific
commitments to halve the proportion of people living in extreme poverty by 2015 have lent an
increased urgency to global poverty reduction. Pro poor tourism takes a proactive, direct
approach to addressing poverty by looking at how tourism can be structured, developed and
managed in order to increase the flows of income to poor people, their assets and/or their
participation (Roe 2006).
Tourism companies should view pro poor strategies as a social responsibility and a sound
business decision contributing to the human security of poor people raises the general security
of the country, which in turn enhances tourisms own security and operating environment. As
with Corporate Social Responsibility, the integration of a pro poor approach by tourism
businesses does not demand the compromise of profitability. For Corporate Social Responsibility
to fulfil developmental objectives including pro poor growth, socially progressive values must be
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firmly entrenched in the culture of the company. That is, CSR strategies must constitute
operational behaviour of the company as opposed to add-ons far removed from daily operation
and commercial interests. It follows that for PPT strategies to be successful and sustainable over
the long term, they must be constituted so as to achieve commercial objectives (Ashley 2006).
Without commercially successful tourism businesses and a thriving sector, the poor do not stand
to benefit from tourism. The same is true for Corporate Social Responsibility and business in
general CSR practices should enhance, or at the very least not undermine, the profitability of
business.
Tourism literature frequently points to the significant interdependence between the
tourism industry and the broader social, economic and political environment in which it operates
(Sharpley 2002; Seaga 2006; PPT 2006). It is on this basis that tourism companies should take a
pro poor approach to doing business. Indeed, the prosperity of surrounding communities and the
security of the country in general are critical to the viability of tourism companies operations.
The tourism product and the quality of the tourist experience are especially vulnerable to the
negative externalities that arise from underdeveloped communities and social decay.. The
incidence of poverty is closely aligned with high and rising levels of crime and violence, the
adoption of a pro poor approach makes social andbusiness sense.
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6. TOURISM BUSINESSES, LOCAL ECONOMIC DEVELOPMENT & PRO POORGROWTH IN JAMAICA
6.1
How tourism companies can take a pro poor approach to business
Tourism businesses that take a pro poor approach to their operation focus on measurable
impacts on the livelihoods of poor people, rather than relying on trickledown effects and general
multipliers to fulfil their corporate social responsibility. The literature speaks to minimizing
leakages and maximizing linkages within the tourism sector to increase the retention of tourism
receipts within the host country economy. It is true that a strongly linked and integrated tourism
sector can effectively drive local economic growth, however, it is not sufficient for securing local
economic development and poverty reduction. In order to ensure that the growth of the local
economy translates to development for the poor, tourism companies must adopt a strategic pro
poor approach to strengthening linkages within the local economy. A pro poor tourism approach
requires that companies do business differently to benefit poor people, seeking to maximize local
economic development and by working, wherever possible, with poor people who produce goods
and services (PPT Partnership 2004).
Philanthropic contributions can be useful, however they do not make the best use of the
assets of the tourism sector. The most effective and sustainable Corporate Social Responsibility
strategies draw upon the core competencies of the business to address targeted developmental
needs within a given community. The tourism sector has the advantage of sizeable purchasing
power, requirements for inputs and staffing as well as influence over a large number of tourists
spending behaviour (PPTP and CTO 2006). Considerable scope exists for tourism companies to
adopt a pro poor approach to how they do business, using their core capabilities to boost gains
for poor people without sacrificing the profitability of their own operations.
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The Pro Poor Tourism Partnership (PPTP), a research effort funded by the British
governments Department for International Development (DFID), has recommended strategies
that can be employed by tourism companies, based on extensive field work in Africa, the
Caribbean and India. The PPTP strategies can be disaggregated according to three markers of
poverty and underdevelopment a lack of income, diminished quality of life, and a dearth of
participation and involvement in the processes that affect individual life and that of the
community.
Strategies that can be employed by tourism companies to improve income prospects for
poor people include the expansion of employment and local wages, the expansion of business
opportunities for the poor and the development of collective community income (PPTP 2004). In
fact, labour is cited as the most important linkage between a hotel and the local economy
(Mitchell and Page 2006:5). Pro poor employee recruitment policies, maximizing the share of
local employment as well as instituting fair working conditions and benefits for employees are
other pro poor, socially responsible measures that tourism businesses can integrate into their
operations. Tourism businesses should also provide training and conduct other capacity
improvement and management interventions that equip employees with the necessary capability
to assume senior level positions (ICRT 2004). Properly designed interventions will both improve
poor peoples access to tourism markets and enable them to profitably engage with those
markets. Capacity building interventions though perhaps not directly income related, allow poor
people to earn from tourism by upgrading their skills and improving their access to markets.
In terms of expansion of business opportunities for the poor, tourism companies can
adopt a pro poor approach to how they procure goods and services. With this in mind, hotels
should seek, wherever possible, to develop partnerships with local people, including the poor,
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who can supply inputs to the sector. For example, hotels should seek to source food from local
farmers, laundry services, security, soft furnishings and other inputs from small and micro
enterprises (SMEs) and products from local entrepreneurs for supply directly to tourists (e.g.
guiding, crafts and souvenirs etc.) (PPP 2004). Sourcing food from local farmers is advantageous
to both farmer and hotel and will be discussed in detail in the case study below. Hotels and
resorts should also look for opportunities to work with informal tourism businesses, for example
using a local taxi company to provide ground transportation for guests, or hiring local artistes for
in-house entertainment (Mitchell and Page 2006).
One of the benefits of the expansion of tourism is that it brings improved infrastructure to
destinations: potable water, improved roads, waste management, transport, electricity and
telecommunications (PPTP and CTO 2006). These infrastructural improvements can
significantly enhance the quality of life for the poor, and to the extent that poverty is defined by
the lack of access to these basic services, such improvements can lessen the effects of poverty.
Beyond the typology of strategies outlined by the Pro Poor Tourism Partnership, tourism
companies can integrate other strategies into their daily operations that may help the poor to earn
from tourism. Hotels can use their ability to influence tourist behaviour to encourage guests to
spend in local communities by having local information counters to provide guests with
information on local taxis, entertainment venues and charities (Ashley 2006). Pro poor
stakeholder behaviour in the tourism sector significantly contributes to local economic
development by increasing partnerships with local entrepreneurs and ensuring that the
multipliers from the industry are concentrated locally.
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6.2 Why tourism companies should take a pro poor approach to business
Trends indicate that the tourism market is changing to reflect an increasingly socially,
environmentally and culturally discerning consumer (ICRT 2004). Given the strong international
pressure to achieve the MDGs by 2015, a reputation for responsible business practices toward
the poor and social aspects of development can constitute a significant market advantage for
developers, hoteliers, resort owners and tour operators in the industry.
Not only do more and more tourists concerned with the impact of their vacation, they also
seek a richer, often times more authentic experience. In order to secure commercial advantage in
an increasingly competitive environment, hotels must necessarily expand their traditional
offerings and provide a more uniquely local experience. A diversified, local tourism product can
usually best be secured with offerings from the local community and companies can work with
SMEs and local people to encourage the diversification of tourism services and local products
(ICRT 2004). For example, Dominica Coconut Products now supplies coconut soap to cruise
ships while Earth Mother Botanicals of Barbados supplies beauty products made with locally
grown herbs to prominent local hotels (PPTP and CTO 2006). The relationship between the
cruise ships and the local coconut products business developed after a conversation between the
proprietor and a top cruise line official. This demonstrates the importance of communication and
networking between local SMEs and tourism companies.
One negative experience of tourism is the extent to which it arouses feelings of exclusion
in people who cannot and do not participate. If access to infrastructural improvements is
restricted and enclaves are created that exclude local people, discontent will abound in local
communities. Discontent, generated by envy is a prime motive for crimes against the industry as
locals get even and show displeasure by sabotaging the tourism product (Seaga 2006).
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Resentful communities can make it significantly more expensive for the industry to operate and
reduce the quality of the tourist experience (Ashley 2006). Therefore, wherever possible,
hoteliers and local authorities should make every effort to ensure that local people are allowed to
enjoy the benefits of infrastructural improvements that come with increasing levels of tourism.
Although pro poor strategies may entail medium term implementation costs, they can
generate long term commercial gain for tourism companies and contribute to the long-term
viability of the sector (Ashley 2006). The implementation costs of pro poor strategies can be
shared by the government and private sector as a pro poor approach to tourism is not only in the
commercial interest of the company but also in the national interest.
6.3 Challenges of Pro Poor Tourism
Attempts to extend income-generating opportunities to the poor are not without their
share of challenges. A lack of skills, low understanding of tourism, poor quality and inconsistent
supply of inputs all impinge upon a tourism companys willingness and ability to do business
with poor people. Interventions to address these issues are therefore needed. One issue is that
hotels typically pay for goods received after 30 or 90 days, a credit arrangement that does not
suit small local producers as they lack working capital. Under this arrangement, small farmers
and small and micro enterprises may not be able to afford to supply hotels. In St. Lucia, the
relationship between local florists and large hotels was strained due to the unsuitable nature of
the credit arrangement (PPT and CTO 2006). Another structural issue for pro poor tourism is the
lack of an operating market to facilitate communication between local producers and hotels
(PPT and CTO 2006). Local producers may want to sell and hotels may want to buy, local
artistes may want to perform and hotels may want to hire, but there is no intermediary to make
the link for negotiations to take place.
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The international development community sanctions tourisms transformative
developmental role and there is no dearth of suggested strategies for maximizing linkages and
minimizing leakages. For example, one strategy for increasing the industrys contribution to the
local economy and the poor is increasing community-based tourism, for example the tour
operator in the Dominican Republic that organizes tours around poor, rural areas. Former Prime
Minister Edward Seaga points out that in the case of tourism in Jamaica, it is difficult to
anticipate what visitors will like beyond standard offerings such as special attractions like
waterfalls, entertainment related sites such as aerial rides and dolphin coves. He believes that
many suggestions for increasing tourisms contribution to Jamaicas poor are nothing more than
politically motivated rhetoric with no chance of practical success.
6.4 Tourism and the Problem of Crime in JamaicaJamaica has an internationally notorious high rate of violent crime, especially homicides
(Harriott 2006). However, its effect on tourism development in Jamaica is usually vastly
overstated. Firstly, the rates of crimes against tourists, including violent crimes, are quite low. In
2003 only 0.0004 per cent of the 2482 million visitors to the island were victimized, while the
homicide rate among visitors for the five-year period up to 2003 averaged 2.8 per 100,000
(Harriott 2006: 25). Second, empirical studies by Alleyne and Boxhill have shown that national
crime rates have not had much impact on visitor arrivals in Jamaica (2003). As discussed in
previous sections of this paper, tourist arrivals have continued to rise over the past ten years.
Over the same period, violent crime in Jamaica has soared. Harriott suggests that tourism may be
more resilient than the literature suggests pointing out that Jamaicas tourism product has indeed
survived a variety of conditions including high crime rates and high levels of criminal and
political violence (Harriott 2006).
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Still, crime is a highly visible problem for the tourist industry in Jamaica and the product
is sensitive to political instability and the loss of general public safety. It is safe to assume that if
Jamaicas high crime problem is left unchecked, the loss of public safety will soon follow. While
high crime rates have not necessarily affected visitor arrivals to Jamaica, the structure of tourism
has been affected. The rising number of enclaves or safe havens for tourists, in form of the all-
inclusive resorts, point to the feeling of insecurity that many tourists have concerning their stay
in the island. Sex, drugs and related tourisms are expected to rise as they are congruent with
violent crime and have undesirable implications for the sector and society at large (Harriott
2006). Beyond national strategies to address the spiralling crime problem, the tourism industry
must develop tourist specific measures to reduce tourist victimization. For example, hotels may
provide a front-desk safety briefing for tourists who plan to venture on to the streets highlighting
hotspots of tourist victimization (Harriott 2006).
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7. THE ACCOMODATION SECTOR, LOCAL ECONOMIC DEVELOPMENT ANDPRO POOR TOURISM IN JAMAICA
In order to meaningfully grapple with the question of how tourism companies can, in
executing socially responsible and sound business practices, increase the contribution of the
industry to local economic development and pro poor growth in Jamaica, I will focus on large,
all-inclusive hotel operators. A focus on all-inclusive hotels is an analytically practical point of
departure since large, all-inclusive hotels dominate the Jamaican tourism landscape. Therefore, a
case study of how all-inclusive hotels in Jamaica can do business in a way that helps benefits
flow to poor people will demonstrate how industry-wide contribution can be increased.
7.1 The All-Inclusive Concept
As indicated in Section 4.2 all-inclusive hotels are the dominant type of accommodation
in Jamaica. The Caribbean Tourism Organization (CTO) defines the all-inclusive (AI) concept
as resorts or vacations where all or most hotel guest services are included in one prepaid
package price (Pennicook 2006). The package includes airport transfers, accommodation, all
food and drinks, snacks, alcoholic beverages, entertainment, sports facilities, some watersports,
and gratuities. Expenses of a more personal nature such as phone calls, excursions, car hire and
gifts are usually not included (Pennicook 2006).
All-inclusive hotels account for the majority of room capacity within the accommodation
sector with over 2.7 million rooms compared to just over 867 thousand rooms for non all-
inclusive accommodation (JTB 2007). Still, a variety of non-all inclusive options exist, including
upscale villas, guesthouses, apartments and traditional hotels. They usually offer variations of the
European Plan (EP), where the rate charged covers accommodation only or accommodation plus
certain meals (Pennicook 2006). All-inclusive hotels have however enjoyed an occupancy rate
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of upwards of 70% for each of the past five years (71.2% in 2007) while occupancy rates for non
all-inclusives have seldom surpassed 40% (46.6% in 2007) (JTB 2007).
The relative success of the all-inclusive model in Jamaica may be explained by a number
of factors. All-inclusive hotels are usually able to deploy more resources toward local and
international advertising contributing to a strong brand that attracts many visitors. Many visitors
also prefer to have the advantage of knowing what the vacation will likely cost beforehand.
Finally, a large number of these visitors usually return for future vacations so all-inclusives
benefit from a high number of repeat arrivals. Repeat arrivals keep occupancy levels high
throughout the year, compared with conventional hotels whose occupancy levels fluctuate
greatly according to season (Pennicook 2006). However, it is perhaps the high incidence of crime
and violence in Jamaica that largely accounts for the popularity of the all-inclusive hotel, as the
safety of the islands visitors can be better assured in a controlled environment. Whatever the
reasons, the all-inclusive hotel in Jamaica is king within the tourism industry. As such, how all-
inclusive hotels can successfully integrate a pro poor approach into their model of operation is of
central importance to the success of pro poor tourism in Jamaica.
7.2 Economic Impact of All-Inclusive Hotels in Jamaica: The Debate
The extent to which benefits from tourism flow to the poor is a function of the benefits
that flow to the local economy; therefore, the impact of all-inclusive properties on the local
economy must be analyzed. The impact of this category on the Jamaican economy is at the
center of vigorous debate. One school of thought holds that the all-inclusive model has a
particularly high level of leakage while also diminishing linkage opportunities within the local
economy. It is said that local entrepreneurs have limited opportunity to engage with tourists and
profit from their arrival in the island while further economic activity is stifled as tourists who
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have already pre-paid for their entire vacation spend little additional money. The problem is
compounded, critics argue, if the property is foreign-owned. Tourism Concern, a non-industry
based UK watchdog, claims that in the case of foreign owned all-inclusive resorts up to 90
percent of the holiday cost leaves developing countries (Mitchell and Page 2006:5). On the other
hand, the PPTP estimates that even in the most leaky of scenarios the highest leakage rates are
approximately 75% (Mitchell and Page 2006:5). The difference between both estimates may be
due to the biased interests of Tourism Concern, an organization whose self-declared raison d'tre
is to campaign against exploitation in the global tourism industry (Tourism Concern n.d.).
On the other side of the debate are those who maintain that all-inclusive hotels yield far-
reaching benefits for local communities and the economy in general (Pennicook 2006). This
school of thought holds that all-inclusive hotels in Jamaica contribute to linkages to local
agriculture, transport and manufacturing as well as provide significant levels of earnings and
employment.
7.3 All-Inclusive vs. EP Style Hotels: Earnings, Employment and Other Linkages
Leading Jamaican tourism expert Paul Pennicook conducted a comparative study of the
impact of both types of accommodation on the Jamaican economy to illustrate the significant and
positive impact of all-inclusives. The study was conducted using surveys and questionnaires on
both leading all-inclusives and European Plan (EP) style hotels (2006). The participating all-
inclusives are SuperClubs, Sandals, RIU and Sunset chains, Couples Ocho Rios and the Holiday
Inn SunSpree while the EP hotels included are the Hilton Kingston, Jamaica Pegasus, the
Courtleigh and the Ritz Carlton. The following section will analyze findings from the research
looking at the performance of all-inclusives by earnings, employment and linkages with local
agriculture, manufacturing and transport.
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Earnings
Occupancy levels correspond with earnings, therefore it follows that, of all categories,
AIs contribute the most to earnings from the accommodation sector. The most recent empirical
study detailing this, a 1997 Organization of American States (OAS) Study, indicated that all
inclusives earned more than all other accommodation combined (Pennicook 2006). In terms of
tax revenues, all-inclusives have the potential to contribute more on a per room basis than EP
hotels given the year-round occupancy levels that they enjoy. In addition, the level of resources
invested in advertising campaigns by large all-inclusives supplements national marketing dollars
and the promotion of brand Jamaica yields industry-wide benefits.
Employment
Both all-inclusive and EP hotels directly employ a large number of Jamaicans. 2000
estimates reflected this fact, indicating that the accommodation sector was responsible for some
47% of employment in the tourism sector (Pennicook 2006). 2007 numbers correspond with this
finding; the entire local accommodation sector accounted for almost 4% of the overall 8.2%
direct industry contribution to employment (see Section 4.2). However, compared to EP style
hotels, all-inclusives employ a larger number of permanent staff due to high year-round
occupancy levels (Pennicook 2006). Therefore, the AIs contribute more to employment
compared with EP style hotels. In terms of local employment the Jamaica Tourist Boards (JTB)
informal survey among all-inclusive and EP style hotels indicated that 90 to 100 percent of staff
members were Jamaican (Pennicook 2006).
Other Linkages: Agriculture, Manufacturing and Transport
The all-inclusive model demands above average inputs of produce, goods and services.
All-inclusives provide a guaranteed three meals as well as unlimited drinks and snacks per guest
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each day. If a pro poor approach to procuring produce, goods, and services is employed, this
consumption could represent tremendous income earning opportunity for the local community,
including the poor. The JTBs informal survey among hotels indicates that all-inclusive hotels
provide a major additional source of income for local suppliers due to year-round demand and
higher expenditure levels for agricultural products and manufacturing, compared to their EP
counterparts (Pennicook 2006). On the other hand, EP style hotels use of local foods ranges
from 70 to 90% while all-inclusives, on an average, consume between 40 to 60 percent local
food (Pennicook 2006). Although the AIs buy less local food in percentage terms, the volumes
purchased by AIs are higher and their overall expenditure on local food much greater than EP
style hotels.
Based on Pennicooks research it is clear that although the percentage of local food
consumed by AIs could be increased, their contribution to local agriculture and food production
is sizeable. Therefore, the focus should shift from arguing against the existence of AIs
(especially since the number of AIs show no sign of decreasing) to a focus on what interventions
are necessary to increase the percentage of local food purchased by all-inclusives. Such a view is
in line with the increasing recognition by development organizations that instead of creating
sustainable tourism, a niche market by any standards, the focus should be on making existing
forms of tourism more sustainable (Lengefeld and Stewart 2004).
In terms of manufactured goods, EPs use 25 to 91% locally manufactured goods while
local use by AIs range from 1 to 60 percent. As with food, though AIs purchase less locally on a
percentage basis, their absolute expenditure on local manufactures is greater than EPs, according
to the informal survey (Pennicook 2006). The accommodation sector boosts local transportation
industries. According to the JTB survey, the vast majority of all-inclusive and EP employees
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commute to work by public transportation. Because all-inclusives employ more staff on a year-
round basis, the impact of AI on the local transportation sector is greater. All-inclusive hotels
also spend more on utilities, gardening, landscaping, security, laundry and entertainment on a per
room basis that EP style hotels.
Without a doubt, the all-inclusive model demands more inputs and expends more
resources than EP style accommodation. Pennicooks study demonstrates that the sheer
immensity of AIs requirements and spending power means that, although on a percentage basis
they consume less local goods and services than traditional hotels, their contribution to the local
economy is greater. The relevant question then is whether all-inclusives can increase their
consumption of local goods and services beyond what currently prevails. In the following section
I take a critical look at a 2006 analysis by former Prime Minister and tourism expert Edward
which concludes that there is limited scope for increase in purchases of local food and
manufactures by hotels. I go on to examine how one Jamaican all-inclusive, Sandals Resorts, is
contradicting Seagas conclusions by working with farmers to increase local food supply. The
Sandals model represents how all-inclusive hotels in Jamaica can successfully align a pro poor
agenda with commercial interests and integrate this socially responsible approach into day-to-
day business operations.
7.4 Can AIs increase their consumption of local goods and services beyond what currently
prevails?
Seaga relies on data from a 1997 empirical analysis of tourism in Jamaica carried out by
Pacific Analytics Inc. Though almost 10 years old at the time that Seagas paper was published,
the Pacific study continues to be the only available detailed and comprehensive report of its kind
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that is based on empirical findings. Although tourism has expanded in Jamaica since 1997, the
structure of the industry has remained the same and trends continue in similar directions.
Therefore, I rely on this study because of the level of detail provided regarding consumption
within the accommodation sector. Unlike Pennicooks report, the study does not disaggregate
hotel by category, focusing instead on the whole accommodation sector.
In 1997, foreign exchange earnings were approximately JA$1.155 while imports of goods
and services for direct tourism and tourism related activities amounted to some $766 million in
1997 (Seaga 2006). Net retention of earnings from tourism in Jamaica that year was thus $389
million or 34 cents on the dollar. In other words, approximately 66 cents for every dollar earned
from tourism in Jamaica leaked outside of the country. Still, compared to other major export
earning industries, tourism was the third highest performer in terms of net retention of earnings
in 2002. The 1997 figure was used for 2002 analysis as it was assumed that for tourism, net
retention of earnings would not have changed significantly over the period (Seaga 2006).
It is the leakage, whereby a large share of tourism receipts flow to foreign investors that
may inhibit the developmental potential of tourism. The data indicates that within the sector, the
majority of imports or leakages, as a percentage of products used by hotels, fall into the follow
categories: linens, towels and sheets (57%), carpets and drapes (49%) and electrical items (45%).
Lesser imports include furniture and fixtures, soaps and toiletries, food and drink and advertising
and promotion.
Substituting local production to reduce the levels of importation in linens, carpets and
drapes and electrical items is not a viable option. In a conversation with the former Prime
Minister, he pointed out that Jamaican manufactures are simply not globally competitive
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primarily due to the high and rising cost of energy and other associated costs. The problem of
supplying locally manufactured products to the accommodation sector is further compounded by
the GoJs tourism development incentive laws allowing hotels to import Furniture, Fixtures and
Equipment (FFE) materials duty-free (Invest Jamaica n.d.). In this case, even if, as suggested in
the National Development Plan, the procurement process were designed to allow local suppliers
to bid competitively for hotel contracts, local producers would find themselves at a disadvantage
due to the relatively higher costs they face. A lack of supportive Government policy geared
toward the sector does little to alleviate the challenges faced by local manufacturers.
In light of the particularly difficult challenges to local manufactures, the most common
strategy recommended for increasing the benefits of the industry to local economic growth is the
strengthening of linkages with farmers for the supply of local food. The study found that over
96% of vegetables and starches, 90.6% of fruits and 89.7% of dairy used by the hotels are locally
purchased. Similarly, local farmers supply over 80% of meat and 90% of fresh seafood used by
the sector. Local production also supplies 82% of alcoholic and 94% of non-alcoholic beverages
consumed within the sector.
In contrast to hotels in the industry, cruise ships are not significant purchasers of local
food supplies. The cruise shipping industry purchases all food in Miami as a matter of policy and
may only purchase small amount of locally produced liquor, jams, jellies and spices in port.
Based on the percentages of locally sourced food to the hotel sector, Seaga concludes that
not much possibility exists for additional local supply as specialty imports of certain meats,
seafood and liquor are unavoidable (Seaga 2006). The small percentages of food items that are
not sourced locally include specialty items such as broccoli, asparagus and others that are not
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grown locally, Seaga informed me. He went on to explain that hotels also import potatoes and
rice, however Jamaica does not produce rice or potatoes in significant quantities. Jamaica does
produce significant quantities of starches such yams, dasheens and green bananas, however
international visitors generally do not prefer these products.
Hotels cite a lack of quality and availability of locally produced goods and services as
the primary constraint when procuring food from local suppliers, while price was given as a
secondary explanation. In the tourism industry, quality has to do with satisfying the expectations
of the visitor, therefore, hotels prefer to import goods from a foreign producer who understands
the needs of the tourists and can meet them on a reliable and consistent basis. The problem,
Seaga admits, is that availability of certain types of local produce results in an over-supply,
followed by an under-supply, which dislocates the planning and operation of hotels. According
to Seaga, the relative inefficiency of local farms, especially the smaller ones, is the main issue to
overcome in terms of increasing local supply of food to the tourism industry (Seaga 2006).
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8 FROM THEORY TO PRACTICE: ALL-INCLUSIVE HOTELS IN JAMAICA
8.1 The Spanish Hotels in Jamaica
The group of Spanish hotels operating in Jamaica have launched the Spanish Jamaican
Foundation, a collaborative effort involving the following hotels: Bahia Principe Hotels, the
Grand Palladium-Fiesta Hotel Groups, Iberostar, RIU and the Seawind Key-Fuerte Hotel Group.
The Foundations website characterizes its establishment as a demonstration of the corporate
and social responsibility of these majority stakeholders in the Jamaican economy (Spanish
Jamaican Foundation 2007). It was expected that, given the combined financial capacity of these
hotels, they would match or exceed the level of development-related support shown by locally
owned properties, however to date this has not materialized. Currently, the Foundations has no
active projects and have only publicly signed two Memorandums of Understanding (MOUs) with
Government ministries and agencies. Under the two MOUs, the Foundation commits to
enhancing cultural tourism in Jamaica as well as integrating persons with disabilities into their
labour force (Spanish Jamaican Foundation 2007).
Seaga, one of the Foundations Board members admitted to me that there has been very
little in terms of funding of anything worthwhile. The PPRPT finds that cooperation among
tourism companies can make pro poor strategies more effective as collaborative efforts create a
larger range of opportunities for local sourcing and a larger pool of labour with appropriate skills
from which to hire (ICRT 2004). Unfortunately, the Spanish Jamaican Foundation has not
exploited such advantages. Despite public declarations, the Spanish hotels have displayed a
disappointing lack of commitment to local development, especially compared to locally owned
hotels and resorts.
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That international tourism is a powerful tool for redistributing wealth from rich countries
to poor countries is a claim made in development literature. However, where tourism companies
are largely foreign owned, profits, except those needed to fund expansion, are repatriated to the
country of their origin. As demonstrated by the Spanish hotels operating in Jamaica, foreign-
owned hotels also display less of a substantive CSR commitment to local development and pro
poor growth. Although the leakage of funds and lack of commitment to local development
dampens the poverty reducing effect of tourism, foreign-owned hotels provide a source of
employment for many local persons. Tourism jobs in Jamaica are perceived to be of high quality
and though net retention of tourism receipts may fall with the increasing presence of foreign
hotels, the concomitant increase in employment is advantageous to the Jamaican economy and
society.
8.2 Sandals Resorts International: Pro Poor Tourism in Practice
Background
The Sandals Group is owned by Jamaican entrepreneur Gordon Butch Stewart and
employs some 8000 people locally. The Sandals Groups includes both the Sandals and Beaches
Resorts. They are large, all-inclusive hotel chains that operate in St. Lucia, the Turks and Caicos
Islands, the Bahamas, Antigua and Jamaica. Both Sandals and Beaches Resorts share the same
environmental management policy as well as employment and social policies. Sandals Resorts
International is one striking example of how one locally owned hotel is effectively practicing its
Corporate Social Responsibility to the benefit of local economic development and pro-poor
growth in Jamaica. Pro poor advocates and CSR proponents laud the Sandals approach as a
highly successful model of responsible tourism while Travel Watch names Sandals as the all-
inclusive that appears to operate at best practice levels in terms of local economic contribution
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(Travel Watch 2006: 6). I will focus on two programs that are particularly relevant for this paper,
the Sandals Farmer Programme and Sandals employee policies.
In 1996, Sandals introduced the Sandals Farmer Programme designed to strengthen
linkages with small, local farmers. In partnership with the Jamaican Governments Rural
Agricultural Development Authority (RADA), the Programme seeks to improve the quality,
quantity, diversity and consistency of produce sold to the tourism sector (RADA 2003). Under
the programme, farmers supply vegetable crops, especially leafy vegetables to the hotels.
Perhaps one of the most important aspects of the Sandals Farmers Programme is the drive to get
local farmers to cultivate exotic
3
vegetables to meet the specialty needs of hotels and reduce
hotel importation of these items. Sandals supplies the seeds for the specialty produce to the
farmers up-front and receives payment from revenue generated from sales of the crops (Rhiney
2006). This project receives technical support from the Inter-American Institute for Cooperation
on Agriculture (IICA) and the University of the West Indies Continuing Education Program in
Agricultural Technology (CEPAT and PPTP 2004).
Results and Benefits of the Programme
The Farmers Programme has been highly successful since its establishment, beginning
with 10 farmers supplying two hotels from five locations and by 2003 a total of 80 farmers were
growing specialty vegetables and traditional vegetables for all eight Sandals hotels in Jamaica
(RADA 2003). Sandals also increased their investment in the programme by 300% and farmers
sales increased over 55 times from US$55,000 to US$3.3 million over the same period (PPTP
and CTO 2006).
3 These vegetables are not traditionally grown in Jamaica. Other exotic vegetables includeyellow & red sweet pepper, table tomatoes, red cabbage, cantaloupe and yellow squash.
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The Santoy Farmers Co-operative is one by-product of the multi-sectoral partnership for
local supply of exotic vegetables to Sandals hotels (Rhiney 2006). By encouraging farmers to
form a co-operative, Sandals encourages small farmers to pool resources, which not only reduces
their vulnerability to external shocks, but also allows them to meet the quantity requirements of
large, all-inclusive hotels. The co-operative also allows formalizes the linkage between small
producer and large hotel, a structure, as outlined earlier in the paper, that is needed to facilitate
their relationship.
The intervention by Sandals is pro poor and facilitates local economic development as it
enables small, poor farmers to engage in production and earn income in spite of significant
working capital constraints. To further address the primary challenges facing farmers, RADA is
conducting training in Group Farming and Marketing in the areas of Cooperative Management,
Group Dynamics and Strategic Marketing i.e. Producing for Specialized Markets (RADA
2003). RADA has also developed printed quality standard leaflets for 8 specialty crops 4, to help
farmers meet hotel quality requirements (RADA 2003). As part of the Sandals Farmers
Programme, farmers visit Sandals hotels to see how their produce is being used and why Sandals
standards for quality are so important (PPTP and CTO 2006).
Challenges faced by the Programme
The main challenges faced by farmers and Sandals hotels are production and sales
related. A lack of consistent water supply constrains production and results in low quality,
inconsistent supply of produce to the hotels. To counter this problem the Government and hotel
sector have distributed water tanks while a planned irrigation system is in the works in one
4 Cantaloupe, sweet pepper, cauliflower, broccoli, yellow squash, zucchini, table tomatoes andsweet corn
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parish. Another production related issue is the lack of proper packaging on the part of small,
often poor farmers whose capacity to invest in production is low. Farmers and hotels alike
complain of the problem of over-supply followed by under supply described in the previous
section. In some cases, inadequate communication between the farmers and the hotels was to
blame for supply issues and RADA is addressing this issue by ensuring that information on
available crops, and their volumes, is supplied to hotel purchasers two weeks in advance of their
readiness. Another issue faced by farmers is the credit period traditionally used by hotels in
payment for orders. As described in Section 6.3, this is a significant problem for poor farmers
who lack sufficient cash flow to maintain regular operations while awaiting payment from hotels.
Overcoming the Main Challenges to Increasing Local Supply of Food
Seaga maintains that there is little scope for increasing local food supplies to hotels in
Jamaicas tourism industry. His analysis is based on the premise that locally sourced foods
already account for a high percentage of food purchased and the remaining requirements for
specialty foods must be satisfied through importation. However, the Sandals Farmers
Programme clearly demonstrates that Jamaican farmers can be successfully trained and
encouraged to produce these exotic vegetables to satisfy the needs of hotels. Such programmes
should be established by more hotels in Jamaica and as an increasing number of farmers engage
in specialty food production, hotels will be able to source more food locally.
Quality and quantity requirements are two other commonly cited issues with purchasing
food from local farmers for hotels. Bringing the latest technology available to bear on production
is an excellent prospect for farmers in terms of satisfying both quality and quantity requirements.
One venture capitalist, Richard Khouri, has introduced hydroponics production to lettuce,
tomatoes and bell peppers (Seaga 2008). The hydroponics farm involves an elaborate greenhouse
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in which air temperature is regulated and nutrition fed into the roots of the plants, which are
suspended in a nutrient solution. The process is regulated by a computer and sees yields up to 78
times greater than the national average for lettuce, 32 times greater for tomatoes and 30 times
greater for bell peppers (Seaga 2008). Since the relative inefficiency of small farms is cited as
one main obstacle of increasing local supply to hotels hydroponics technology holds significant
promise for deepening linkages between local agriculture and the tourism industry. It is a high-
tech agricultural model that will require significant investment, however its development is in the
national interest and in the social and business interest of tourism companies.
Sandals Employee Policies
Sandals Resorts also has a pro poor approach to employment within its hotels. For
example, the Sandals Montego Bay hotel operates the START programme, which offers training
positions to youth from the nearby low-income community of Flanker. The positions include
training on aspects involved in running the resort, from catering to scuba instruction (PPTP and
CTO 2006). Graduates of the training programme automatically become part of a placement
programme developed by Sandals, in which they are either directly employed by Sandals or
given recommendations for placements with nearby participating hotels (PPTP and CTO 2006).
The investment by Sandals in staff development is substantial by any means. Line staff
receives 120 hours of training valued at US$85 per year while the hotel has spent an additional
US$5 million per year for training centres and higher education for staff (Lengefeld and Stuart
2006). A study of all-inclusives across the Caribbean, found that untrained recruits to Sandals
could achieve salaries of between US$450 and US$900 per month through career progression
(PPTP and CTO 2006) while the hotel also maintains generous employee benefits. The Sandals
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Group contributes to pension plans and provides comprehensive health and life insurance plans
for employees. The hotel also provides meals and transport free of cost to employees (Lengefeld
and Stuart 2006). Additionally Sandals employees enjoy job security, a major concern for
employees in the tourism industry due to its seasonal nature half of the persons interviewed in
two hotels in Negril had worked for Sandals for between 3 to 12 years (Karammel 2006).
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9. PROSPECTS FOR TOURISM-LED GROWTH FOR THE POOR IN JAMAICA
Jamaica is a lower middle-income country with a population of 2.682 million and a GDP
per capita (purchasing power parity) of $7,700 at the end of 2007 (STATIN and CIA 2008).
Robust, sustained economic growth has eluded Jamaica and estimates indicate that some 14.8
percent of Jamaicas almost 3-million person population survives on less than $2 per day (CIA
2008). The Human Poverty Index (HPI) is perhaps a more illuminating measure of poverty as
takes into account non-income dimensions of poverty including a short life, lack of basic
education and lack of access to public an private resources. The HPI, developed by the UNDP,
compares 103 developing countries. Jamaica is ranked 34, which is high compared to other
islands in the region including Barbados (which is ranked 1) (UNDP 2007).
High levels of poverty and criminal activity are closely related, and Jamaica suffers from
one of the highest murder rates in the world. Poverty in Jamaica is chiefly a rural problem (DFID
2007). Herein lies the crucial significance of tourism, as it is the most active sector in providing
jobs in rural areas where they are desperately needed. Therefore, the tourism industry is uniquely
positioned to affect poverty in Jamaica if the correct policies are implemented. For example, up
to half of the employees interviewed at two Sandals hotels in Negril reported that working for
Sandals had enabled them to not only support their immediate family, but in many cases
members of their extended family as well (Karammel 2006). Also, 70 St. Elizabeth farmers who
participate in the Sandals Farmer Programme earn US$7200 per month from the sale of
watermelon and cantaloupe to one Sandals resort in the area, representing an income of US$100
per farmer enough to keep one family above the poverty line (Lengefeld and Stewart 2006).
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9.1 Pro Poor Tourism and Local Economic Development in Jamaica: Recommendations
69% of poor people in Jamaica live in rural areas and are unemployed or underemployed
(DFID 2003). Tourism is well placed to be a viable sectoral strategy for reducing poverty in
Jamaica because, with proper policies, hotels can address the lack of economic opportunities in
rural areas, low quality skills training and lack of access to basic infrastructural services.
Although the all-inclusive model has been criticized for locking local poor people out of tourism,
Sandals proves that poor people can be successfully integrated into the all-inclusive operation.
The Sandals Group presents an excellent model for doing businesses in a way that allows
poor people to reap opportunities from tourism development. It must be noted that the pro poor
approach of the Sandals Group is seamlessly integrated with profitable business operation. All
hotels, including EP style hotels, can adopt various elements of Sandals pro poor policies
outlined in this paper to increase their contribution to pro poor development.
Government agencies like RADA demonstrate how successful public-private partnership
can be in executing programmes to deepen local linkages and improve the livelihoods of the
poor. The Government of Jamaica should continue to pursue partnerships of this nature, while
providing industry-wide support through infrastructure upgrading, national marketing and
facilitating partnership with local industries.
Pro poor growth and local economic development should be the priority CSR objective
for tourism companies operating in Jamaica. These days, its everyones business.
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