WILLEMSTAD – Curaçao should continue diversifying its tourism source markets and strengthen connections with North America, Latin America and emerging markets to reduce the economy’s vulnerability to developments in Europe.
That is one of the policy implications presented in a new working paper by researchers Robert Hieroms and Raïna Hieroms of the Centrale Bank van Curaçao en Sint Maarten (CBCS), which examines how fluctuations in the euro affect Curaçao and Sint Maarten.
The figures illustrate Curaçao’s particularly strong relationship with Europe. Between 2010 and 2024, the Netherlands alone accounted for an average of 42.1 percent of Curaçao’s foreign exchange earnings from tourism. When other euro-area countries are included, the euro area accounted for 48.6 percent.
The United States accounted for another 32.5 percent.
The situation differs sharply from Sint Maarten, where only 11.9 percent of tourism earnings came from the euro area during the period studied. The United States generated 52.1 percent of Sint Maarten’s tourism earnings.
According to the study, Curaçao’s greater dependence on European visitors means movements in the euro can have a more pronounced effect on its tourism sector. Sint Maarten, because of its stronger orientation toward the American market, is considerably less sensitive to euro exchange-rate fluctuations.
Curaçao and Sint Maarten use the Caribbean guilder, which is pegged to the U.S. dollar. As a result, when the euro loses value against the dollar, it also loses value against the Caribbean guilder.
That makes a Curaçao vacation more expensive in euro terms even when hotels, restaurants and other tourism businesses have not increased their prices.
The researchers therefore see diversification of source markets as one way of reducing Curaçao’s exposure to currency fluctuations affecting one major market.
North America has already become increasingly important for Curaçao, particularly the United States and Canada. Brazil and Colombia have also gained importance in recent years.
The study recommends targeted marketing and expanded air connectivity as tools to broaden the island’s tourism base.
Such diversification would not necessarily mean reducing the importance of the Dutch market. Instead, a broader geographical distribution of visitors could make Curaçao more resilient when economic conditions or exchange rates turn unfavorable in one region.
The recommendation takes on additional importance as tourism itself becomes a larger part of Curaçao’s economy. Tourism’s share of foreign exchange earnings increased from 21.7 percent in 2010 to 53.9 percent in 2024, making developments in the island’s major visitor markets increasingly important for the wider economy.