WILLEMSTAD – Rising unemployment in Europe may not immediately show up in Curaçao’s tourism figures, but the consequences can become visible several months later as European households adjust their vacation plans.
That is one of the findings highlighted in research by the Centrale Bank van Curaçao en Sint Maarten (CBCS) into the factors affecting tourism earnings from the euro area.
Researchers Robert Hieroms and Raïna Hieroms examined quarterly data from 2010 through 2024 and included euro-area unemployment among the variables that could influence tourism exports.
The study suggests that higher unemployment in the euro area does not have an immediate effect on Curaçao’s tourism exports. However, the estimated effect turns negative beginning in the first quarter after the increase in unemployment.
The researchers offer a practical explanation for the delay.
Long-haul international vacations such as trips from Europe to Curaçao are generally planned well in advance. Airline tickets and accommodation may have been booked and paid for months before economic circumstances change.
Consequently, someone who loses a job or becomes concerned about their financial situation may still take a vacation that was already booked. The effect is more likely to become apparent when the person decides whether to book another trip.
This means deteriorating economic conditions in Europe could take months to become fully visible in Curaçao’s visitor spending.
The finding is particularly relevant because of the importance of European travelers to the island. The Netherlands accounted for an average 42.1 percent of Curaçao’s tourism earnings between 2010 and 2024, while the euro area as a whole generated 48.6 percent.
The study also finds the opposite relationship when European economic conditions improve. Higher real GDP growth in the euro area has a positive and statistically significant effect on Curaçao tourism exports, as households have more disposable income to spend on international travel.
Together, the findings demonstrate why Curaçao tourism authorities and businesses have reason to closely follow economic indicators in the island’s principal source markets.
Tourism has become increasingly important to Curaçao’s overall economy, making changes in European employment, income and consumer confidence potentially relevant to economic activity on the island several months later.