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SIMULATION RESULTS AND SCENARIO ANALYSIS

THE ANATOMY OF A BOOM IN TOURISM

The specific and sustained shock to annual tourism growth would result in an incremental growth rate of 2.0 percentage points to an average of 3.94 per cent over the following five years. This shock would result in tourism stopover arrivals peaking at 1,979,430 visitors by 2013 and average annual occupancy rates increasing to 68.8 per cent at the end of the period from 63.5 per cent at end 2007.

Num ber of Stay Over Visitors

1,600,000

2.0

1,500,000

Annual Tourism Growth Rate in Tourist Arrivals

1.0

6.0

5.0

1,800,000

1,700,000

4.0

3.0

1,400,000

2007

2008

2009

2010

2011

2012

2013

-

2,000,000

1,900,000

Boom in Tourism Scenario

Growth in Tourist Arrivals (Per cent)

Occupancy Rate (Per cent)

70.00

69.00

68.00

67.00

66.00

65.00

64.00

63.00

62.00

61.00

60.00

2007

Annual Average Occupancy Rate

2008

2009

2010

2011

2012

2013

Labour Market Response In response to the buoyed demand in Jamaica's tourism product and a desire of hoteliers to maintain their target employee-per-tourist ratio desired vacancies rises immediately by 28.0 per cent to 6,206 persons and the vacancy creation rate climbs by 51.0 per cent to 1,863 vacancies per month. After 11 months, the number of vacancies increases to accommodate the new employment opportunities in the sector. Due to frictions in the labour market, the hiring rate lags behind the vacancy creation rate. However, both the hiring and vacancy creation rate reach their new equilibria in 24.0 months. As a result of the aforementioned dynamics, the number of persons employed in the sector grows

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