TURKS AND CAICOS

The Turks and Caicos Islands – TCI – are the very definition of a high-end niche market. But that doesn’t mean the country offers limited opportunities, quite the opposite. Recently, the TCI has been winning so many tourism awards that major airlines are adding new flights, and major hospitality investments are planned. However, the TCI, like most other leading Caribbean tourist destinations, must now compete with the lure of Cuba, soon to open its doors to potentially millions of American visitors.

TCI Premier Rufus Washington Ewing has pledged to boost development, and not just in tourism – the TCI is also set to grow as an offshore financial center, helped by ongoing reforms to promote governance and transparency. Together, tourism and financial services dominate the economy in the British Overseas Territory of just some 50,000 people, including immigrants.

In April 2015, the government announced a new agency called Invest TCI, charged with helping foreign investors and advising the government on how to promote trade and investment. “I am very excited by the potential of Invest TCI, given that we are already one of the fastest growing economies in the Caribbean,” Minister of Finance Washington Misick told reporters.

It’s difficult to imagine beaches more beautiful than those of the TCI. Frommers’ Guide puts it thus: “Calm, azure waters. Golden beaches. Stunning coral reefs and the world’s best diving.” Such attractions, just a short-haul flight from the U.S. mainland, have won the TCI numerous accolades: Grace Bay, the most popular location, was named the world’s third-best beach by CNN, while Forbes picked the Grace Bay Club as one of the top hotels to visit.

And the Island Fish Fry, the TCI’s most popular cultural experience, received TripAdvisor’s Certificate of Excellence in 2015 – the event blends local food and arts and crafts, plus of course music.

However, the TCI has built its reputation as a laid-back, unspoilt, nature-oriented destination, contrasting with some other Caribbean islands. “The Turks and Caicos is perfect for travelers more interested in hearing the wind rustle through Grace Bay’s casuarina trees than thrumming steel drums, and for visitors more interested in seeing Bight Reef’s multicolored fish and coral than fancily-costumed show girls,” Frommers said. “Watch the glowworms light up near Caicos Cays, identify wildflowers on an island hike or just take in the ocean view. The Turks and Caicos are naturally stunning.”

Such attractions have driven fast growth, especially as the U.S. economy has recovered. According to the Turks and Caicos Tourist Board (TCTB), visitors were up by 31.6 percent in 2014 against 2013, to 1.4 million, with almost 70 percent arriving on cruise ships at Grand Turk Cruise Center. Just over 80 percent came from the United States, with Canadians a fast-expanding second market.

These figures don’t count arrivals on private planes and yachts, which comprise a numerically small but financially very significant part of TCI tourism, given that the islands are renowned as a get-away for film stars and the super-rich.

Tourism from Europe is also growing. British Airways earlier in 2015 announced a second weekly flight from London. Also in 2015 United Airlines said it would add non-stop weekly flights from Chicago, December through April. Small wonder the TCI is a winter favorite, considering the islands’ average daily high in January of 28°C, against Chicago’s minus 1°C. And Jet Blue announced daily direct flights from Fort Lauderdale in Florida.

The TCI already boasts a generous supply of flights, so all this additional seat capacity, coupled with the recent expansion of Providenciales International Airport, will boost one of the islands’ existing strengths. “The accessibility to our destination is perhaps the biggest contributing factor to the exceptional growth experienced in 2014,” Ralph Higgs, TCTB’s director of tourism, said. “We have reliable and convenient airlift from most of the major gateways in North America, and we’ve also included additional lift from JFK in New York and out of Boston’s Logan International Airport.”

Amidst all the good news, the TCI must develop a strategy to counter Cuba’s likely impact on regional tourism. “Cuban thaw poses threat to Caribbean neighbors,” the Financial Times headlined a report in August 2015. While resumption of U.S.-Cuban diplomatic relations will not immediately end the travel ban for U.S. citizens, the market sees this as an inevitable next step. Potentially this will lead to a “torrent of big-spending American tourists” heading to Havana, so taking business from other destinations. “Countries that have the majority of tourists coming from the U.S. are the ones that will stand to lose the most as these tourists head to Cuba instead. That could be disastrous for some,” an emerging markets analyst told the FT.

In July 2015, the Turks and Caicos Weekly News argued the country should stick firmly to its tradition of targeting the top end of the market, rather than shooting for the mass market. “If we start transforming Grace Bay beach and other beautiful spots in the TCI, into replicas of Miami Beach, then the once forbidden, much more exotic Cuba is going to take a bite out of our tourism business,” TC News said.

Michel Neutelings, president of the Turks and Caicos Hotel and Tourism Association (TCHTA), said the destination “is working to expand its hotel product beyond the traditional hub of Providenciales and Grace Bay Beach to the other beautiful islands as demand for additional accommodation, attractions, and niche offerings has increased.”

At the heart of the debate are projects such as construction of beachfront tower-block hotels, and the possible development of a huge port and cruise ship complex on East Caicos Island, currently an uninhabited wildlife paradise.

Beyond tourism, the TCI wants to expand its presence in legitimate offshore financial services, setting itself apart from some other Caribbean havens better known for obscure dealings. The country has signed up to the OECD’s Multilateral Convention on Mutual Assistance in Tax Matters and received praise from the International Monetary Fund in May for the work of its Financial Services Commission: “The FSC has made notable progress since the previous IMF assessment in 2003 and now has better governance, ample financial resources, and supervisory power.” Nonetheless, the IMF said, more work was needed to modernize legislation and improve oversight.

Institutions present in the offshore financial and insurance sector include the Temple Financial Group, the Turks and Caicos Banking Co., British Caribbean Bank, FirstCaribbean International Bank and ScotiaBank.