Tourism growth could pressure fresh food supplies, warns Tyler
With projects in various stages of execution to raise Jamaica’s hotel room count to 50,000 in five years, a supplier of food products to the sector is highlighting a connected problem.
Executive Co-Chairman and co-founder of Caribbean Producers Jamaica Limited, Thomas Tyler, says the swings in produce prices and supplies are a major challenge for the tourism sector.
“The biggest Achilles heel for the tourism industry in Jamaica is fresh produce and the massive swings in abundance to nothing at all,” said Tyler in an interview with the Financial Gleaner.
“St Elizabeth is the breadbasket but [because of] the swing of water and no water, there are six months where things are good then there is a five-month swing when there is no produce. It creates a difficult thing for the hotel industry,” he said.
The tourism sector directly or indirectly provides an estimated 30 per cent of jobs and nearly 60 per cent of total exports from visitor spending.
According to the Ministry of Tourism, the country is likely to record 4,122,000 visitors for the January to December period with projected earnings of US$4.2 billion. Meanwhile, 1,800 new rooms are expected to be added to the hotel room count by the end of 2024.
“Adding all the new rooms coming on there is difficulty for lettuce, tomatoes and so on. It is something we have spoken to the Government about. They want to protect the local farmer, but they have a big industry that is being affected. There are 1,800 new hotel rooms coming on stream soon and in all 7,000 rooms are in the pipeline. It is a big problem.”
CPJ sells produce in other markets, but not in Jamaica. That’s because import charges range from 88 per cent to 238 per cent, “making import unfeasible”, and local supply of crops is not guaranteed.
“Can you imagine paying such duties on products that only last seven to 14 days after landing?” he asked rhetorically.
“We are in the produce business in other islands. It is not an area unknown to us. In Jamaica that is the biggest problem for the hotel industry, and it is an immediate problem,” he added.
CPJ has looked at developing a centralised facility in St Elizabeth, but both price swings and import charges have been a barrier.
“When its feast there is more than you know what to do with it; when it is famine, they charge the highest prices. We would love to be in that business but not in the current circumstances,” Tyler said.
Minister of Agriculture, Fisheries and Mining Floyd Green says in response that plans are under way to stabilise price swings and also increase production of fresh produce.
“We are on a drive to expand our irrigation network. One short-term measure is to put in place rainwater harvesting across productive areas. We have identified six such areas. Additionally, for individual farmers, we will provide pond liners free of cost where farmers are willing to build the ponds,” the minister told the Financial Gleaner.
However, in relation to importation, he said decisions are taken based on available data and need.
“Jamaica has been self-sufficient in fruit and vegetable lines except when we have significant rainfall and drought. The more we are able to help our farmers it will strengthen our self-sufficiency. There will be no carte blanche decision on importation. Jamaica has for a long time been self-sufficient in fruits and vegetables, we will only consider importation in weather events,” Green stated.
“Clearly, if there is a need, we will take on a case by case-by-case basis. One of the things we are doing better is to use data to guide our farmers. Eighteen hundred more new rooms will come on stream for tourism next year, but so will two new agro parks. By February we will be advertising for investors.”
The minister said that while the plans and programmes of the Government are meant to ramp up production to deal with demand, the agriculture ministry would also like to see companies like CPJ, which have good distribution networks, engaging farmers with contractual arrangements.
“For example, if they know that 20,000 pounds of lettuce will be needed at a certain time we will work with our farmers to work on supply,” he said.
The Ministry of Tourism has said there is US$4 billion worth of projects in the pipeline to develop new hotel rooms over five years. They include Oceans by H10 in Trelawny, 444 rooms; and Princess Hotels, Hanover, 2,000 rooms, and Hard Rock Hotel & Casino in Montego Bay, 1,700 rooms.
Still, Tyler was somewhat cautious about the size of the expected growth in the market.
While 2022 “was a roaring year for travel, in 2023 we are feeling it softening in the Caribbean,” he said. “I think we are back into a pre-COVID cycle” for travel.