Aruba’s Tourism Still in the Tank for August 2006 even after a Concerted Marketing Campaign

As the rest of the Caribbean sees increases in their tourism, Aruba continues to not even break even. Does anyone in Aruba want to rethink the notion that the “Natalee Holloway” situation with go away in 4 days? Do you still doubt Scared Monkey’s June 2, 2005 initial post, This Can’t Be Good For Tourism, Where’s Natalee Holloway?

It is hard to imagine that Aruba’s tourism numbers have still not stabilized after all this time following the disappearance of Natalee Holloway. Eventually, after the disastrous 2005 and 2006 decline in tourism Aruba will have to hit rock bottom and show some type of increase. However, even with what little increase they may show the tourism numbers in Aruba are far from what they once were. Especially factoring in the fact that many Caribbean islands are showing rapid increases. The bad news continues in the CBA report for October 2006.

Year to date for the first 8 months of 2006 stay over visitors are down nearly 10%. This while tourism is up across the Caribbean. From the Aruba Central Bank:

• In October 2006, money supply shrank by Afl. 9.7 million or 0.4 percent to Afl. 2,463.6 million. This contraction was the result of an Afl. 8.3 million outflow of funds to abroad and an Afl. 1.4 million decrease in net domestic assets.
• In August 2006, the number of stay-over visitors and their nights spent on the island
  declined by 0.9 percent and 0.8 percent, respectively, compared to the corresponding
  month in 2005.
• In the first eight months of 2006, stay-over visitors and total nights spent on the island shrank by 9 percent and 6.4 percent, respectively.
• According to data from the Central Bureau of Statistics, the average occupancy rate of the hotels for October 2006 shows a contraction of 6.2 percentage points to 73.7 percent, compared to the corresponding month a year earlier.

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More disastrous economic numbers are reported from the CBA from the second quarter in Aruba. Couple these continued poor results with the upcoming 2007 BBO “turnover tax”, Royal Caribbean no longer docking in Aruba and the tax battle with Valero.

Quarterly bulletin for the second quarter of 2006

• The Centrale Bank van Aruba (the Bank) mentions in its Bulletin of the second quarter of 2006 that available information indicates a weakening in current business conditions in the second quarter of 2006. Indicative hereof is that the Partial Economic Activity Index (PEAI), as published by the Central Bureau of Statistics (CBS), showed a 2.0 percent decline in the volume of business activities, compared to the corresponding quarter a year earlier.
• Compared to previous surveys, a decline in the optimism for the coming months has also been noticed. The performance in business conditions is affected by an ongoing weak performance in the tourism sector, as indicated by the numbers of stay-over visitors and nights spent on the island, which declined by 5 percent and 4 percent, respectively.
• Gross tourism receipts decreased by 4 percent, while the average hotel occupancy rate recorded a 6.3 percentage points decline to 74.4 percent.
• Inflationary pressures remained unabated in the second quarter of 2006. The quarterly
  average inflation rate remained high at 3.9 percent
• This improvement reflected mainly a decrease in payment arrears to government-related institutions (including the AZV) and suppliers of goods and services of, respectively, Afl. 29 million and Afl. 9 million. However, total government debt surged by Afl. 119 million (7 percent) to Afl. 1,882 million, compared to the second quarter of 2005, reflecting increases in both domestic and foreign debt of Afl. 69 million (7 percent) and Afl. 50 million (6 percent), respectively. The debt-to-GD (GDP 2005) ratio rose by 3 percentage points to 47 percent.