• Renewed tourism activity in Jamaica will drive real GDP growth of 4.6% in 2021 and 4.1% in 2022, up from a 9.9% contraction in 2020 according to Fitch Solutions. This is an upward revision from its previous 2021 forecast of 4.4%. It follows the Q2 2021 data which showed quarterly growth of 14.2% y-o-y (seasonally adjusted 2.4% q-o-q).
• The modest easing of travel restrictions and more limited overnight curfew in Q2 2021 supported tourism arrivals and commercial activity. Tourism historically accounts for roughly one-third of economic activity. Foreign arrivals increased 5,065.1% y-o-y in Q2 2021, a figure that is inflated by the near-complete shutdown of the tourism industry in Q2 2020 amid the onset of the COVID-19 pandemic. Q2 2021 arrivals were 61.2% below Q2 2019, suggesting that the Jamaican economy remains well below its pre-pandemic level. Fitch forecasts Jamaican real GDP will not return to pre-pandemic levels until 2023.
• Real export is expected to grow 8.2% in 2021 and 3.8% in 2022 as high levels of COVID-19 vaccinations in key source markets will support tourism inflows to Jamaica and services exports. The US, UK and Canada, key tourism source markets, ramped up their vaccination campaigns in H1 2021, with at least 65.0% of their respective populations receiving at least one dose of a coronavirus vaccine as of October 2021. This is expected to underpin greater demand for overseas travel.
• Moreover, airline and cruise ship companies have announced plans to increase travel options to Jamaica. American Airlines announced that it would resume direct flights to Jamaica in December 2021, with 17 nonstop flights per day. Meanwhile, Carnival announced that 110 cruises will stop in Jamaica from October 2021 to April 2022, while Royal Caribbean announced that it would resume cruises to the country beginning in November 2021.

(Source: Fitch Solutions)

• United States (US)-based Frontier Airlines has announced plans to increase the number of weekly flights to Jamaica, beginning November 1. International Sales Manager, Alfredo Gonsalez, has said that three new gateways will be added to the existing slate, to bring the number of destinations from which scheduled service into Montego Bay is provided, to four. 
• Frontier will commence flights from Atlanta, Georgia on November 1, Orlando, Florida on November 2, and Newark, New Jersey on December 17. These, he indicated, will be in addition to flights from Miami, Florida to Montego Bay, which commenced in May. 
• The decision was based on the need identified after two very difficult years in the travel industry, consequent on the coronavirus (COVID-19) pandemic, to connect [and] bring people from the US back to Jamaica [and] people from Jamaica to the US. He said the airlines’ leadership decided early in the pandemic to identify key potential destinations that would need to be connected, once countries globally lifted or relaxed travel restrictions, adding that Jamaica was definitely one of them. 
• This augurs well for recovery in the tourism industry and indicates that there is demand for travel to Jamaica. It comes against the background of increased consumer confidence around travelling for vacation purposes. According to the US Conference survey of consumer confidence in October, 50% of Americans indicated that they plan to go on vacation within the next six months, the largest since February 2020. As the US market accounts for the largest share of visitors to Jamaica, this bodes well for the demand for our tourism product. 
• Notwithstanding, the CDC’s risk assessment for COVID-19 for Jamaica could pose as a deterrent to some travelers as Jamaica is categorised at level 4. This means that persons should avoid travelling to the destination or be fully vaccinated before travel. The hope is that a continued downtrend in COVID-19 cases will result in a reduction in the island’s risk category ahead of the peak winter season.

(Source: JIS News & NCBCM Research)

• Jamaica Producers Group ('JP') announced that it has established Grupo Frontera Limited ('GFL' or 'Grupo Frontera'), a 50/50 holding company with Norbrook Equity Partners (‘Norbrook’). As part of the transaction, Grupo Frontera recently acquired the assets and operations of Grupo Alaska ('Alaska'), a leading ice and water company in the Dominican Republic. Grupo Frontera was established by JP and Norbrook to acquire and grow well-positioned companies in the Spanish speaking Caribbean and Central America, the first of which is Grupo Alaska. 
• JP is a Jamaican-owned multinational with its primary businesses in food and drink and logistics and infrastructure. JP owns and operates Hoogesteger Fresh Specialist BV, the market leading fresh juice manufacturer supplying Holland, Scandanavia and other markets in Northern Europe. It is also the largest shareholder of CoBeverage Labs SL, a fresh juice manufacturer supplying Southern Europe. JP’s specialty food interests include its Tortuga subsidiary, through which JP operates a Jamaica-based bakery that supplies Tortuga Rum and Spirit cakes to over 15 countries. 
• JP Snacks Caribbean, a subsidiary of JP is a leading regional producer of tropical snacks. JP Farms, Jamaica’s leading banana farm, is the largest private sector employer in St. Mary, Jamaica. JP Group’s logistics interests include Kingston Wharves Limited, a regional multipurpose port, Geest Line Limited, a UK based shipping line connecting European, Caribbean and Latin America markets, and JP Shipping Services a freight forwarding and logistics enterprise based in the UK. 
• This investment in the Dominican Republic will allow JP to tap into this lucrative market while leveraging its expertise in the food and drink business. The Dominican Republic, which was one of the fastest growing countries prior to the pandemic, is expected to grow by 8.2%  in 2021 and 4.8% in 2022, as a swift national vaccination campaign and resilient private consumption drive domestic activity.

 (Source: JSE News, Fitch Solutions & NCBCM Research Team)