Economy in Belize

Trade in Services

Tourism is the #1 Foreign Exchange Earner for the Economy in Belize. It is the single largest service sub-sector, with a direct contribution of (USD $277.7mn), 15.0% of total GDP, and a total contribution generating USD $766.8mn accounting for 41.3% of GDP in 2017. This number was forecasted to rise by 3.6% in 2018 and by 4.6% to USD $1,250.7mn, 54.0% of GDP in 2028. The industry directly contributed to 13.4% of total employment, accounting for 21,000 jobs in 2017. The total contribution by the Travel & Tourism industry, which includes jobs indirectly supported by the industry, accounted for 37.3% of total employment (59,000 jobs) in 2017. These numbers are expected to rise by 3.9%, respectively, by 2028. Relative to our size, Belize Ranks 13th out of 185 countries, when it comes to the Travel & Tourism industry’s contribution towards GDP as of 2017.

Source: World Travel & Tourism Council: Travel & Tourism Economic Impact 2018 report (Belize) https://www.prosperityaid.com/wp-content/uploads/2018/08/Belize-2018.pdf

Overnight tourism has seen a net increase of 2.8% from 2018-2019, despite the months of June through September reporting in the negative. September had the largest reduction of 8.5% from 2018. The Belize Tourism Board (BTB)’s reports indicate that The Phillip Goldson International Airport, Belize’s main port of entry from its primary market, United States, reported a 0.5% decrease in arrivals in June 2019, a 0.2% decrease in July 2019, and a 7.8% decrease in September 2019. However, these reductions in arrivals were offset by the other months resulting in a net increase of 4% from 2018-2019. This growth in arrivals can be attributed to the additions of flights coming directly from other countries other than the US. These include additional flights from Air Canada, West Jet and notably COPA Airlines which facilitates more visitors from South America. The growth can also be said to be attributed to the addition of direct flights to and from cities such as Loa Angeles and Fort Lauderdale.

 

Cruise ship arrivals, on the other hand, have not remained as positive. Cruise ship arrivals have reduced by 3.1% from 1,208,137 visitors in 2018 to 1,170,558 visitors last year. This can be attributed to the reduction in cruise calls over the past year with 21 less than 2018. Twelve of which were a result off cancellations, all coming in the month of December, which is normally a peak period in Belize’s Tourist season. The Belize City port in particular has seen a reduction of visitors to the tune of 8.8% overall. Of its total arrivals on average 82.2% of visitors have disembarked.

 

There has also been a decrease of 12.7% in the amount of visitors who opt to go on tours. As a result there has been a noticeable decline in the visiting of the top 10 tourist sites (Jaguar Paw, Belize City, Lamani, Altun Ha, Old Belize, Xunantunich, Goff’s Caye, Starfish Island, Bacab Eco Park, and the Belize Old River.), and a decline of engagement in the top 10 activates (Cave Tubing, Man Temple Visits, City Tour, Snorkeling, Other Wildlife watching, swimming, airboat rides, Horseback riding, Museum Visits and Rum Tasting) frequented by cruise ship passengers.

These declines at the Belize City port may be attributed to the rise in visitors to Harvest Caye in the South. Harvest Caye, in Particular, saw an increase of 2.8%, to 374,894, in visitors despite having one less call overall. Of these visitors, only 13,875 were transferred over to Placencia in 2019, the remainder (96.2%) stayed on the island.

As the Total amount of Tourist visiting the country has been seeing an upward trend, the hospitality industry has taken notice and made provisions. From 2018-2019 the total amount of rooms available in the country have increased from 8,435 to 8,853. This came with an increase of hotels, adding 70 making the total 953.

 

Source: Belize Tourism Board (Tourism Key Performance Indicator Summary for 2019)

The transportation industry has run persistent deficits since 1985.10 The travel sector is the most important service export in the tourism industry and accounts for approximately 70 percent of Belize’s total service exports since the 1990s.11 This sector includes transport and storage, post and telecommunications services. In 1992, performance in the sector was robust contributing 9.6% towards annual GDP growth. By 2008 however, the annual growth in GDP was a mere 1.7%.12

Belize receives three types of visitor arrivals: stopover arrivals (overnight visitors), same day visitors (mainly from bordering countries such as Guatemala and Mexico) and cruise ship passengers. The US market is the largest consumer of the Belizean travel industry. In 2006, it accounted for approximately 62 percent of Belize’s stopover arrivals.13

During the 1998 to 2009 period, the number of cruise passengers in Belize grew significantly from 14,183 passengers to 705,219 respectively14(See Figure 2). In 1998, there were only 25 ship calls but that record has increased considerably to 284 calls in 2009, with the record highest being 406 ship calls in 2004.15

Communications Services also classified as Information Communication Technology (ICT), increased with the inception of more providers in the fields of software development, online gaming, offshore data processing and call centers. By mid 2007, four ICT companies were operating in Export Processing Zones (EPZs).

The financial services sector, particularly international financial services, is a budding sector in Belize’s economy. The International Business Companies (IBC) Act, Chapter 270 of the Laws of Belize offers income tax exemptions and other tax benefits to promote investments in the sector. In 2006, there were 38,471 registered IBCs in Belize.16 The International Financial Services Commission Act, Chapter 272 of the Laws of Belize, seeks to promote and regulate international financial services with a mandate to oversee the emerging offshore industry in Belize.

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