Social Considerations6 - 7
Political Considerations7 - 8
The Industrial Relations Climate8 - 9
The Current State of the Private Sector9 -10
Technological and Infrastructural Capabilities10 - 11
This report provides an analysis and evaluation of the factors that would affect the operations of a hotel that our company is interested in setting up in Jamaica. To effectively undertake this study, a PEST (Political, Economic, Sociocultural and Technological) analysis was carried out.
The PEST Analysis looked at Jamaica’s external business environment and examined the economic environment (including monetary and fiscal policies), social and political considerations, the industrial relations climate, current state of the private sector, technological and other infrastructural capabilities. All supporting data can be found in the appendix and bibliography.
Our report found the prospects for setting up a hotel in Jamaica to be quite challenging. The main areas of concern to us were:
• The high inflation rate
• High interest rate
• Government’s high spending reflected in the high debt-to GDP ratio • The alarming crime rate
• The global recession
Despite these negatives, we are optimistic that our hotel stands a good chance of survival given the fact that Jamaica is a prime tourist destination. With over three million visitors flocking to the country's shores every year our hotel stands a good chance of surviving and remaining viable once the correct business ideas are implemented, the economy rebounds from the global recession and both the external environment and investment climate remain attractive to investors.
Jamaica is the third largest island in the Caribbean, measuring approximately 4,300 square miles. It is situated about 145 km south of Cuba, 160 km west of Haiti and 890 km south east of Miami. The island is made up of coastal lowlands, a limestone plateau, and the Blue Mountains, a group of volcanic hills, in the east. Jamaica is known for its natural beauty, resource endowments, tropical climate, lively culture and phenomenal sporting successes.
Jamaica was discovered by Christopher COLUMBUS in 1494. The native Taino Indians, named the island ‘Xaymaca’, meaning the ‘Land of Wood and Water’. England seized the island in 1655 and established a plantation economy based on sugar, cocoa, and coffee. Under British rule, the island became knows as ‘Jamaica’ and gained full independence in 1962.
Today, Jamaica operates as a mixed, free market economy and continues to derive most of its foreign exchange from tourism, remittances, and bauxite/alumina. The country has expanded its tourism, financial services and telecommunications industries and is well positioned as the hub of the Caribbean. Additionally, it is strategically located at the gateway of the major air and sea routes into the Caribbean Basin with world class port facilities, two international airports, modern shipping and transhipment services, road and highway networks.
Jamaica has not been spared from the effects of the global economic downturn. The downturn in U.S. demand for Jamaica’s major exports, a decline in remittances, and a contraction of consumer demand led to a deep recession in 2009.
With an estimated population of 2.8 million people as of July 2009 (CIA World Factbook), the country nevertheless remains an important force in the tourism economy and politics of the Caribbean today.
According to the 2010 Index of Economic Freedom, Jamaica’s economic freedom score is 65.5, making its economy the 57th freest in the 2010 Index. Jamaica ranks 11th out of 29 countries in the South and...