The number of tourists flying to Barbados had been falling steadily for years when Freundel Stuart, prime minister of the tiny Caribbean island, set out to drum up new business in June. Instead of paying a visit to the United Kingdom or the United States — the sourcesof nearly half of his country’s visitors — he went halfway around the world to China. 

Only a few hundred Chinese tourists visit Barbados each year, but the island sees that country's travelers as a potential savior in an increasingly competitive tourism industry. “The plan is for, in the long run, to become a destination for high-end tourism from China,” says Bernard Phillips, manager of planning for the Barbados Tourism Authority. “The number of Chinese tourists with disposable incomes is growing each year.… We want to raise awareness of Barbados in China.” 

That hope resonates across the Caribbean, where tourism is the predominant economic driver. Consider the numbers: Around 55 million Chinese traveled abroad in 2010, spending an estimated US$42 billion. That’s more than three times the 18 million overnight visitors from around the world that the Caribbean attracted that year, according to tourism statistics. As more Chinese travel, “the potential is enormous,” notes Lisa Simon, president of the National Tour Association, a Kentucky-based organization that partners with Caribbean tourism groups and works with Chinese tour agencies. “It’s going to keep growing every year. You’ll see more and more interest in North America, not just the United States, as a destination.” Boston Consulting Group predicts that by 2020, outbound travel from China will be worth US$590 billion. 

For the Caribbean, there’s just one problem. Most Chinese only have a vague idea of the region as a business or holiday destination. “In China, you don’t see anything about the Caribbean,” says Pierre Gervois, a French expat in Beijing, who is CEO and president of China Elite Focus, a company promoting tourism to wealthy Chinese. “There is no brand exposure.” 

The Caribbean is trying to change that, step by step. In 2010, for example, Barbados tourism authorities set up an exhibit at the Shanghai Expo and launched a web site in Mandarin. As Prime Minister Stuart stated, “If Barbados could attract just a small percentage of [the millions of Chinese who travel each year], it would solve a lot of our problems.” The entire region has begun promoting itself as a destination to mix business with a round of golf, its famous cigars and beachfront villas, and even luxury weddings. While it is unlikely that millions of Chinese will flock to the Caribbean in the short term, officials hope they can give their economies a big boost by making the region a complementary stopover for travelers to traditional markets, namely the U.S. and Europe. 

Stamp of Approval

China currently has an estimated 100 million middle-class families with the means to travel overseas, according to China Business Network, a consortium of consultants. “Chinese have much more disposable income, enabling them … to fulfill their dreams of visiting foreign countries [and take] exotic holidays,” the network said in a recent presentation to Caribbean leaders. 

Courting Chinese tourists, however, poses a number of challenges, including intense competition from a slowing tourism market. Global travel is forecast to grow a sluggish 2.5% in 2011 and not much more in 2012, reported Tourism Economics, a U.S.-based research and consulting firm. Under China’s travel policy, only countries with a bilateral agreement that gives them "approved destination status" can welcome Chinese tourists. Beijing began negotiating those agreements in the late 1990s. Since then, more than 100 countries have received approved status. (Business travel and other types of visits are not covered by the policy.) 

Yet being granted approved status doesn’t necessarily mean a flood of visitors will follow. The U.S. and China signed a memorandum of understanding in 2007, allowing Chinese holiday-makers to start visiting the United States the following year. Millions of Chinese were expected to take advantage of the new agreement, but by 2010 only 802,000 visitors made the trip. 

“The Chinese market is still a developing one. There was a lot of misinformation, with people thinking that first-time visitors could do the U.S. on US$40 per day. It wasn’t realistic,” notes Simon of the NTA, which negotiated the 2007 memorandum of understanding. Because Chinese leisure travelers must use an officially approved tour operator or travel agent to organize their trips, "the key in China is spending time educating agents [there], who can then reach consumers,” she adds. 

North America or Bust

Another glitch, travel experts say, is that the U.S. has been too slow in processing visa applications. Post-9/11 visa rules require the U.S. State Department to interview applicants. Requests for non-immigrant Chinese visas to the U.S. have ballooned 123% in the past five years, leading the State Department to increase staffing at its Chinese embassies. The U.S. Travel Association recently called on the State Department to reduce the backlog, claiming that doing so could result in US$850 billion of additional tourist spending every year. 

The backlog is important for the Caribbean because the islands are seen as ancillary destination to the U.S. “We are promoting not just the United States, but all of North America to Chinese tourists,” Simon says. That makes sense. Due to the length of the journey — about 13 hours for a direct flight from Beijing to New York — some Chinese tourists want to visit several destinations in the same trip, “including a few days discovering the Caribbean,” Simon notes. 

The big challenge is that if the Caribbean is to market itself as a beach vacation, it has to beat competing destinations closer to China. Even the shortest trips to the Caribbean require a full day of travel and overcoming colossal jet lag. “Of course, Asia has some of the best beaches. You can travel to the Philippines or Australia and it doesn’t take so long,” says Li Qiming, who took a two-week trip from the Eastern Chinese city of Qingdao to the U.S. and three Caribbean countries recently. He says the Caribbean is generally considered relatively exotic back home. “It was always one of those places that you heard a lot about. It’s famous. But not a lot of people in China have visited it.” 

The best way to get the attention of Chinese tourists may be through the Internet. China had an estimated 477 million Internet users as of early 2011 — a group larger in size than the entire U.S. population. But government access restrictions known as the “great firewall of China” make reaching those users more difficult than in other countries. To work around the barriers, Jamaican tourism officials have been advertising on the China Wide Web, rather than the World Wide Web, and giving presentations in Chinese at tourism events. They have their work cut out nonetheless. Jamaica, one of the most popular islands, drew 1.9 million overnight visitors in 2010, according to the Jamaica Tourist Board, with North Americans accounting for 1.5 million of the total, compared with 1,302 Chinese. 

'Go Where the Money Is'

Amid those challenges, can the Caribbean find a niche? Gervois of China Elite Focus suggests that it would be a mistake for the region to market itself as a vacation for all. “If it’s going to be successful, it has to market itself to wealthy tourists and as a destination for a mix of business and leisure,” he notess. “Wealthy Chinese businessmen know of the Caribbean because of its cigars. That’s the type of market the Caribbean should be pursuing.” 

A robust interest in the Caribbean clearly exists among that segment, notes Jacqueline Johnson, a Jamaican-American working in the tourism industry for more than 20 years. In 2010, Johnson launched a Mandarin section of her website, Every day, she says, she wakes up to at least 100 emails in Mandarin from Chinese travelers looking for more information about what her firm has to offer. “There is interest and it’s sustained,” she says. “The world is getting smaller and smaller. Why shouldn't the Caribbean be at the forefront as a new destination for Chinese that are ready and willing to travel?” 

According to Johnson, frequently asked questions include the legality of marrying in the Caribbean and the quality of facilities. (The answers: Legal recognition of a marriage depends largely on the Caribbean country in which the wedding takes place, and there are enough high-end hotels and restaurants suitable for weddings throughout the region.) “It’s not a question of money. That’s not a concern,” she notes. “These are affluent travelers.” What's more, many of those visitors are taking business trips that include a few days for leisure travel, she adds. “Everyone wants to go where the money is.” 

Diplomacy and Development

There is already plenty of Chinese money in the Caribbean. 

While recognizing the Caribbean as a tourist destination in China has yet to fully emerge, the region has attracted the attention of low-profile Chinese investors and the government. In 2009, China pledged US$7 billion in foreign direct investment to the region, much of it for tourism-related projects, according to China’s Ministry of Commerce. Private ventures have injected billions more. “Nearly every island in the Caribbean, from the smallest on up, currently has a substantial investment from China,” says David Jessop, managing director of the Caribbean Council, a London-based consultancy that works with Caribbean governments. 

Interest in the Caribbean may be tied to China’s push for more diversity and complexity in its foreign investment, notes Jacques deLisle, a professor at University of Pennsylvania's law school and a Chinese law and politics expert. “With the reserves built up through years of massive trade surpluses, China is awash in a sea of foreign exchange. Investing abroad is one way of putting some of it to use," he states. "Many in China are pessimistic about growth prospects in the developed world and so it is not surprising that some of the money for non-resource-extraction sectors would go to the developing world — and in an industry that draws developed world dollars in the form of tourists travelling to those less-developed countries.” 

Politics also plays a role. Richard Bernal, former Jamaican ambassador to the U.S. and current director of the Caribbean at the Inter-American Development Bank in Washington, D.C., adds that China started with “mainly economic aid … and now it’s starting to diversify into other areas, like tourism.” According to Bernal, much of that investment has been tied to diplomacy. To Beijing's consternation, 23 countries retain diplomatic ties with Taiwan, despite the view in China that it is not a sovereign nation. Of them, 12 are located in Central America and the Caribbean, including Belize, the Dominican Republic, Haiti, St. Lucia, St. Kitts & Nevis, and St. Vincent. 

China has conspicuously rewarded countries for switching diplomatic allegiances. When the spice island, Grenada, cut ties with Taiwan in 2005, the Chinese government built the country a US$55 million cricket stadium. In total, China spent US$132 million that year helping countries that had cut off Taipei with preparations for the 2007 Cricket World Cup. 

The money didn’t stop there. China has since propped up a troubled resort investment in the Dominican Republic, pumping US$462 million into the Punta Perla complex. It provided US$122 million in economic assistance to Dominica, an island with fewer than 73,000 residents. In Trinidad & Tobago, it built the prime minister’s official residence and the National Academy for the Performing Arts. China is spending US$1 billion on a new container port in the Bahamas, and committed US$600 million to dig a deep-sea harbor and a connecting highway in Suriname.


In September at the third China-Caribbean Economic and Trade Cooperation Forum held in Port of Spain, the capital of Trinidad & Tobago, China announced that it will provide US$1 billion in loans to Caribbean countries for infrastructure projects. “China cannot develop itself in isolation of the world and the world needs China for its development,” China’s Vice Premier Wang Qishan told attendees of the forum. 

A Big Role

The largest of China's Caribbean investments is currently under construction on a stretch of beach in the Bahamas. Baha Mar, the largest hotel and casino development in the Caribbean, is a US$3.5 billion complex, which will include 2,250 rooms in four hotels, the largest casino in the Caribbean, a Jack Nicklaus-designed golf course and five acres of convention and meeting space. 

It almost didn’t happen. In 2008, a key partner pulled out of the multi-billion dollar deal. A financial rescue line from U.S. and Europe was unlikely. The worldwide financial crisis was raging, liquidity problems were killing banks and the Great Recession was just beginning. “At that point, China State Construction [Engineering Corporation] had already bid on a portion of the project and they said, ‘We really believe in the project. Would you consider us for a larger role?’” recalls Don C. Robinson, a former executive at The Walt Disney Company, who became president of Baha Mar Resorts in 2006. 

Few could have foreseen how big a role the Chinese wanted. Through China State Construction, the developers — members of the Swiss Izmirlian family, who live in the Bahamas — undertook negotiations with the Export-Impact Bank of China. The result: US$2.4 billion of loans from the bank and a US$150 million investment from China State Construction. What’s more, to make up for a labor shortage, the Bahamian government allowed thousands of Chinese laborers to enter the country to work on the project. 

When the development broke ground in February last year, at an event attended by several Chinese dignitaries, Baha Mar's chairman and CEO, Sarkis Izmirlian, called it a “historic day … for the Bahamas.” By the time the project opens in 2014, it will employ between 7,000 and 8,000 full-time workers and attract as much as US$1 billion in new spending, enough to raise the country’s gross domestic product. 

Perhaps more significant is what the project portends for the tourism industry. Baha Mar recently opened an office in Hong Kong to “promote the Bahamas in general and our project in particular,” the company said in a statement. As Izmirlian sees it, “Baha Mar represents an unprecedented alliance of powerhouses in the hospitality, financial and construction industries and signals a shifting of sands for the travel industry.” 

Whether tourists will follow the path that Chinese investors have blazed remains to be seen. “I don’t think that you’re going to see Chinese replace Americans or Europeans in terms of the numbers,” says Robinson. “But you will see Chinese tourism supplement those markets.”