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Anguilla - Economy

Anguilla is a small open economy with a narrow economic base focused on high-end tourism and construction, and to a lesser extent, offshore financial services. The performance of the economy is highly correlated with global trends and economic developments in the United States. The dependence on this narrow base has resulted in large fluctuations in economic growth over the last two decades, thus highlighting Anguilla’s vulnerability to external shocks.

Anguilla is a member of the Eastern Caribbean Currency Union with the second smallest economy as at the end of 2015 accounting for 5.1 per cent of the Union’s total gross domestic product (GDP). Anguilla is also a self-governing Overseas Territory of the United Kingdom (UK). This relationship requires the Government of Anguilla (GoA) to maintain fiscal and debt2 operations within the context of the Fiscal Responsibility Act 2013.

The global financial crisis which began in the fall of 2007 with the sub-prime mortgage crisis in the USA negatively impacted the economy of Anguilla by the end of 2008. Economic growth contracted continuously over the period 2008-2012. In 2013 the economy showed its first signs of recovery with real growth of 0.32 per cent as key economic sectors rebound. Economic activity was estimated to have expanded by 2.2 per cent in 2015 compared with growth of 6.7 percent in 2014. The expansion in 2015 reflected increased activity in the hotels and restaurants, wholesale and retail trade and real estate, renting and business activities and financial intermediation sectors, tempered by a deceleration in construction activity.

Anguilla has few natural resources, and the economy depends heavily on luxury tourism, offshore banking, lobster fishing, and remittances from emigrants. Increased activity in the tourism industry has spurred the growth of the construction sector contributing to economic growth. Anguillan officials have put substantial effort into developing the offshore financial sector, which is small but growing. In the medium term, prospects for the economy will depend largely on the tourism sector and, therefore, on revived income growth in the industrialized nations as well as on favorable weather conditions.

Its currency, the Eastern Caribbean dollar, is pegged to the United States dollar, at US$ 1.00 5 EC$ 2.6882. The country’s economy is service-based, with tourism, offshore banking, and remittances being the mainstays.

In 2006–2007, the economy was vibrant, growing by 10.9% in 2006 and 12.0% in 2007; this growth was attributed to expansion of the tourism and the construction sectors. However, in 2008, growth was only 4.5% due to the global economic downturn. The economy further declined by 13.6% in 2009, and provisional results for 2010 indicate that the real gross domestic product (GDP) fell by 3.8%.

Anguilla has carefully developed a relatively small but high-end tourism sector, which has enjoyed some of the region’s highest growth rates. Stay-over arrivals jumped from 111,118 in 2002 to 164,067 in 2007 and contributed to growth in economic activity, foreign exchange earnings and employment.

Holiday “Festive” Season is Mid-December to mid-January. The island is more crowded and rates for accommodations and activities may increase. These weeks book quickly, so book several months or even a year in advance. Best time for celebrity-spotting! High Season is February through the end of March and then again in early December. Less crowded than the holidays, this is a good opportunity to escape the winter.

Middle “Shoulder” Season runs after the holiday season from mid-January to February, throughout the whole month of April and again during the week of Thanksgiving. It is an ideal time to visit the island in terms of weather on the island (and cold weather back home) without the holiday or high season crowds. The Low Season is from May to just before Thanksgiving and offers less crowds and more affordable rates. This is a good time to hold a destination wedding. While Villa Alegria is open all year round, some restaurants and businesses go on hiatus during late September and October.

Anguilla doesn’t concern itself with lots of rules on where to park, what to wear, where to drink, or how old you are (carding is not usual), instead trusting guests to use their own judgment and preferring to treat them as real people. There a few decency rules, such as no nude bathing, which keeps the island family friendly.

Current tourism policy articulates a number of guiding principles that shape the policy objectives for the sector. The strategy focuses on using Anguilla’s environment, culture and people as the foundation for building a unique product, and incorporates elements of industry regulation, environmental sustainability, inter-sectoral linkages, human resource development and sector planning, among other things.

To enable the full realisation of the policy, GOA launched the Tourism Sector Development Project, a comprehensive tourism planning exercise, in July 2008. The first phase of this project began by undertaking a socio-economic impact analysis of selected tourism projects and by carrying out a survey to assess the attitudes of citizens and residents towards tourism and tourists.

The results, which became available in early 2009, confirmed the likely socio-economic strain on Anguilla and its 14,000 residents from planned and existing tourism products over the next decade. However, the attitudinal survey indicated that most Anguillans had a very positive view of tourism and held the strong belief that decisions related to tourism development should rest with the State. Moreover, local people wanted to be more involved in decision-making and monitoring the tourism product at the community level.

The second phase of TSDP entailed the development of a Sustainable Tourism Master Plan (STMP), the purpose of which is to guide the development of the tourism industry during the period 2010 - 2020. The STMP is to form the basis for diversifying and improving the quality of Anguilla's tourism product, based on a complete review of the local tourism sector and analysis of competing tourist destinations.

On March 22, 2017 the Government of Anguilla (GoA) and Airbnb have signed a Memorandum of Understanding (MoU) that seeks to promote the island as a premier Caribbean destination, not only for its world class beaches, crystalline waters, top class resorts and restaurants, but also for the unique experience of being part of Anguilla's identity, cultural heritage and environment. This partnership will also create a framework that opens a dialogue between the Government of Anguilla and Airbnb to discuss topical industry matters, including marketing and regulation.