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Continuing the Conversation on the International Airport

by: - October 20, 2014
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Gregory Nassief (file photo)

Gregory Nassief (file photo)

In a recent interview with a local newspaper I stated that I was “not in favor” of an international airport. As someone committed to developing tourism in Dominica, the comment puzzled many, including the guy that passed me on the street and shouted through his open car window “you are wrong on the international airport”. Most concerning was indirect feedback that I was “anti development”. It may have been unwise of me to make such a statement without a deeper clarification as to my reasoning.

Many in Dominica simply assume that an international airport will significantly increase stay-over arrivals to Dominica and suddenly boost the industry. This is based on the strong belief that tourists do not come to Dominica because they cannot get a direct flight here. The fundamental challenge for Dominica’s tourism industry is not lack of direct fights, it is lack of awareness of the destination. Most people still have never heard of us, and many that may hear about our island assume we are the Dominican Republic and do not give it another thought. Dominica spends ec$4m annually on destination marketing, St. Lucia spends ec$40m and Barbados ec$135m. Our tourism master plan calls for an ec$12m annual spend on destination marketing. To increase awareness of our destination thereby increasing demand for our destination, we need to allocate more resources to marketing and improve the effectiveness of our marketing and communication strategies.

There is also the question of economics – the cost to build and operate the airport, as well as whether it makes business sense for international airlines to introduce direct flights to a destination like Dominica – which is fundamental to the discussion. Without an honest assessment of the magnitude of these financial challenges, both to Dominica and to the international carriers, we keep hanging our hopes on the illusion that an international airport is the answer.

Dominica’s air access challenge is one of economics and convenience, not one of infrastructure. With higher demand for our destination, there would be more airlift and better options. The main/scheduled airlines that currently service Dominica have the capacity to carry between 34 and 68 passengers per flight, but on average arrive and leave with 40% – 50% of their seats empty. Many of them are financially challenged to continue servicing Dominica. And we think major international carriers with 200+ seats will suddenly start arriving if we have an international airport? What about Melville Hall? Melville Hall already has an international runway, and can accommodate direct flights form the US with 100+ passengers. A recent study showed that for a single airline to break-even financially servicing Dominica with five directly flights a week from Miami would require 30,000 passengers annually, a number that far exceeds the 18,000 visitors that arrived here from the United States in 2013. The current demand to drive the economics is far from where it needs to be.

Regarding convenience, travellers worldwide are accustomed to going through hubs, getting off one plane, getting on another, and continuing their journey. What they expect, however, is a convenient connection in terms of time/reliability (not having to wait too long for the connecting flight), baggage (baggage going straight through to their final destination i.e. Dominica) and an in-transit connection process (no need to go through immigration and customs and have to check-in again for the connecting flight). Here is an example of a typical and inconvenient connection: an American Airlines passenger arriving to Antigua, having to go through immigration, pick up their bags, go through customs, go to the LIAT check-in counter, go through another check-in process, pass through immigration, then security, etc. This is the problem we need to focus on solving. We have seen great improvements with Seabourne in San Juan and WinAir in St. Maarten, due to the agreements they have with various international airlines like American, Jet Blue, United, Air France and British Airways, thus allowing and enabling “convenient connections”. “Fixing LIAT” means significant improvement in its service and reliability such that similar agreements with international airlines become possible.

The other challenge to growing our tourism product is the number and quality of hotel rooms available, currently numbering less than 500. St. Lucia has approximately 5,000 and Barbados almost 8,000. To increase the number and quality of rooms we need to create an enabling environment for investing in and operating tourism-based businesses in Dominica. Our fiscal framework and incentives are outdated and uncompetitive, and our VAT rates and energy rates are the highest in the region. We need to change this.

It is useful to reflect on the experience of St. Lucia & Grenada. St. Lucia’s Hewanorra International Airport was built by the US Military and handed over to St. Lucia in 1952 (effectively a gift to the island). It became operational with a new control tower in the early 1970s and did not see serious internationally scheduled flights until 10 years later, when St. Lucia already had over 2,000 hotel rooms and double the arrivals we have today (and that was 30 years ago!). Grenada’s Maurice Bishop International Airport was completed in 1984, also substantially a gift to the island (first built by the Cuban Government, then finished with funding from various donor agencies). Similarly for Grenada, it took about 10 years to see regularly scheduled international flights, by which time Grenada already had over 1,000 hotel rooms with arrivals exceeding what we have today. Dominica’s international airport would cost approximately ec$1 billion and the key metrics of hotel rooms and visitor arrivals are not nearly where they need to be (note that our tourism master plan’s medium growth strategy goals for the year 2022 are 1,220 hotel rooms, up from less than 500 today, and 127,000 stay-over visitors, up from 80,000 today; so in 2022, if we achieve these goals, we will have less rooms and visitors than St. Lucia did in the early 1980s when its first international flights began arriving).

Dominica’s obsession with an international airport is destructive because we lose focus on the key things we need to do in the short and medium term: increase our marketing spend and marketing effectiveness so that Dominica is increasingly recognized internationally as a tourism destination; create an enabling environment for investing in and operating tourism-based businesses so that the quantity and quality of our hotel rooms can be increased; optimize and grow our airlift to achieve convenient connections with our seven nearby hubs so that we provide visitors with reliable and convenient airlift in and out of Dominica.

If Dominica does these three things then we may actually need an international airport in 10 years. Of course, if in the mean time, a donor country is willing to write a check for ec$1 billion to build one, and we can build it and operate it in a financially and environmentally sustainable manner, then absolutely, lets go for it (although I may still argue strongly that we can use ec$1 billion in much better ways). But even if that happened tomorrow morning, we still need to do the hard work to develop our tourism product and attract a significantly increased number of visitors to our island. If not, we would have built the airport of our dreams but still be dreaming about the visitors that never arrive.

By Gregor Nassief

Note: The views expressed are those of the author and not necessarily the views of the Dominica Hotel & Tourism Association of which the author is President.