How does the Caribbean’s tourism industry survive COVID? A veteran regional expert advises cautious optimism and warns…
At first glance, the outlook for Caribbean tourism is bleak, the future glum.
The region’s tourism sector has been badly infected by the COVID crisis and its symptoms are pretty severe; and while stakeholders are working hard to find a curable treatment, the jury’s still out on whether Caribbean tourism will recover in the short term or be a major casualty.
What are the implications if tourism cannot be sufficiently resuscitated across the region in the near future?
A veteran regional economics expert with decades of experience in the tourism industry shared his views on the situation, while requesting anonymity given his sensitive current position in respective regional institutions currently involved in the searches for solutions.
‘First off,’ he recalled, ‘tens of thousands of workers have already been either laid-off or have had to endure massive salary cuts as hotels found themselves empty almost overnight.
‘With many other sectors facing the same issues, the opportunities to find work elsewhere are almost nil.
‘But what makes the situation even more desperate in many Caribbean territories is that aside from tourism being the major contributor to Gross Domestic Product (GDP), it also accounts for over three-quarters of all foreign exchange revenue.’
Why is this going to cause severe problems for Caribbean islands?
No Money, No Food Security…
He replied, ‘First off, because many of the islands do not have properly developed manufacturing or agriculture sectors.
‘Simply put, without tourism dollars countries are going to find it hard to feed themselves.’
He drew attention to current statistics, ‘Several CARICOM countries import between 80 percent and 90 percent of their food and without foreign exchange this is going to create a major disruption in the food supply.’
He continued, ‘It might be argued that it creates opportunity for local farmers, but local industry cannot spring-up overnight to meet the demand that exists.
‘Whatever food can be bought is most likely going to cost much more, as many countries seek to consolidate their production.’
But, as he noted, that would have severe implications for families across the region.
According to the veteran regional official, ‘It’s economics 101: higher prices mean the cost of living is going to increase.
‘People who are already without jobs or cash-strapped will find themselves unable to afford many needed items – and this in turn greatly impacts their standard of living.
‘People will have to make choices about what to spend limited financial resources on.
‘Stores and other businesses will suffer and close down, resulting in further job losses and greater loss of revenue to the governments.’
The Big Caribbean Question…
So, the big question remains: Can the Caribbean get the tourism sector working again?
‘The short answer is that it is going to take the efforts of all stakeholders, working together, along with a lot of thinking outside of the box.’
He said this realization exists at the highest levels in the region’s tourism industry, with at least three major hotel groups operating in the Caribbean already, in his view, ‘ahead of the curve the COVID-19 response.’
The former policy-making advisor pointed to the work being done by Marriott, Hilton and Sandals which have unveiled indepth measures to ensure higher levels of hygiene and protection at their facilities.
Marriott introduced its ‘Global Cleanliness Council’ to implement and oversee higher standards of cleanliness at its hotels, which will comprise persons from several sectors relating to health and hygiene and has created a new, enhanced cleaning regimen.
President and CEO of Marriott, Arne Sorenson, said Marriott wants guests to understand that the group’s commitment to health and safety is a priority.
Hilton, meanwhile, launched its ‘CleanStay’ initiative with Lysol Protection and has partnered with RB (the maker of Lysol) and is consulting with the Mayo Clinic on new hygiene standards.
President and CEO of Hilton, Christopher Nassetta, is also hoping this can provide the assurances guests need to start travelling again.
‘But possibly the most important news for the Caribbean,’ the regional tourism veteran said, ‘has come from Sandals (Resorts International), which is, by far and large, the biggest player in many Caribbean destinations, employing significant numbers of people while accounting for high levels of foreign exchange earnings.’
Sandals has just announced its ‘Platinum Protocols of Cleanliness’, which will guide sweeping new operating standards for its resorts in the region, focused heavily on sanitizing and new standards for physical distancing.
Sandals’ new protocol says it is hoping to build on its ‘industry-leading practices, to guarantee cleanliness standards and heightened health and safety measures that address changing consumer expectations amidst COVID-19.’
Underlining the importance of the SRI initiatives to the region, the official said, ‘Probably more than any other hotel executive and probably because he was born in Jamaica and is a pure Caribbean man at heart, Chairman and Founder of Sandals Gordon ‘Butch’ Stewart understands, better than the others, the urgency of getting the tourism sector back-up-and-running, for the sake of the very survival of many Caribbean islands.’
Sandals indeed announced earlier this week new reopening dates for its properties across the Caribbean, earlier planned dates in May forcibly moving times a month later to June, due to the continuing shut-down of international air travel and closure of airports everywhere its properties are located.
A statement issued earlier this week by Sandals Resorts International (SRI) Chairman Butch Stewart said, ‘We’re doing everything we can to offer peace of mind during a time that has been difficult for the entire world — and that is why we have continued to evolve our protocols to maintain an even safer and healthier stay.’
The statement added ‘SRI will be depending on an ongoing relationship with medical professionals guided by the U.S. Center for Disease Control (CDC), the World Health Organisation (WHO), as well as local health authorities.’
The Big Airline Question…
The measures taken by the major Caribbean hotel brands are timely, but will all depend heavily on other matters beyond their purview still being sorted-out, including: reopening of borders, resumption of flights, whether flights will be reduced — and most important, whether people are going to feel comfortable enough to go on a vacation anytime soon.
Many airlines have also been introducing their own new cleaning standards, including regular sanitizing of all surfaces, as well as ‘electrostatic spraying’.
Check-in protocols are being upgraded, online systems are being encouraged and aircraft are being equipped with HEPA air filters designed to create a sterile environment that is inhospitable to viruses — and of course, passengers will all be required to wear masks.
Temperature checks will be a minimum requirement for boarding, while fogging will also take place; and there is even a suggestion to leave middle seats empty.
Again, it all depends on the challenges facing the region in its bid to attract international airlines to do business in new ways as well.
The big question for the airlines is: How sustainable will these new measures be, especially with some already warning that because of narrow profit margins, the only way they intend to leave the middle seat vacant is if governments pay for it?
For example, JetBlue said in a recent Caribbean Hotel and Tourism Association (CHTA) webinar on the COVID-19 challenge that has grounded airlines worldwide, that it had no plans of flying routes where it would be losing money.
The veteran economist and lecturer, tapping into his wealth of experience, also responded to our invitation to offer advice to the region’s stakeholders, particularly the governments.
He replied, ‘Despite all the inherent barriers, the efforts being made by the hotels and airlines will require commensurate action on the part of regional governments.
‘While many have been overwhelmed with their specific issues, CARICOM governments, alone and together, need to become more active and more vocal in engaging stakeholders and trying to plot a way forward.’
Ticking Time Bomb…
COVID-19 has created an economic and social time bomb just waiting to go off — and the ticking clock is rapidly counting-down.
The regional tourism expert says the virus has also forced levels of cooperation previously unseen in some areas:
‘The seriousness of the current predicament has already forced action in Jamaica, where the Andrew Holness government has found support from the Opposition, which has also recognised the hardships that lie ahead for Jamaicans in general, if immediate action is not taken to get things back up and running.
‘It’s the same as in Israel, where two major parties that failed to form a government after three elections in one year, came together this year, to form a unity government to fight COVID-19.’
And he stressed, ‘That’s what it takes: All hands on deck!’
‘Other Caribbean territories have to take note of the fact that they also need to start planning Beyond Survival Mode to prevent replacing a health crisis with a debilitating economic and social crisis.’
And how can that be done? ‘One of the critical areas will be the enhancement of local systems.’
‘It’s no stretch to imagine that a lot more research will go into holidays by travelers and they are very likely to investigate the state of local health care, which is why countries like Germany are pretty optimistic about receiving visitors once borders open-up.
But our visionary source sees ‘a glimmer of light and hope’ at the end of the tunnel for Caribbean destinations.
Referring to a recent study by Tourism Economics (an Oxford economics company on economic and travel outlook post COVID-19), he said: ‘The study suggests that while the immediate global impact will be even more severe than even the Global Financial Crisis, the rebound is also expected to be much greater.’
The study, undertaken by Tourism Economics President Adam Sacks, suggests a 12 to 18-month timeline for recovery.
According to the veteran official, ‘The positive news is that the study has anticipated a strong rebound for travel demand – within the United States initially – but one that can easily also impact international travel as well.’
He showed The VOICE a copy of the study, which found that based on what happened after the SARS outbreak, once recovery begins travel will surge.
‘Well,’ he explained, ‘That’s great news, but only if destinations start preparing for the surge when it happens.
‘To do that, however, they need to survive the short term, which brings us right back to the necessity for the Caribbean to start working together.’
The Only Option…
By his academic measure, ‘The only option for Caribbean countries — many of them Small Islands Developing States (SIDS) — is that outside of getting the tourism sector up-and-running, they will have to rely on incurring additional debt by borrowing, or depending on grants from developed nations.
‘With all countries buckling under the impact of the pandemic, it may reduce the availability of grants, which takes us right back to the doors of institutions like the IMF.’
But the IMF has already received requests from close to 200 countries and even with its $50 billion rapid-disbursing emergency financing system, regional economists largely conclude there’s no guarantee that this will be enough, especially for many Caribbean countries that already have high debt-servicing obligations.
Choice Words of Caution…
The economist, based on his historical understanding of the development of tourism across the region and where it is now, offered another few choice words of caution for the region’s governments.
Pointing to what he referred to as ‘worrying trends’, he said: ‘We have seen certain territories start to release information about island-specific reopening measures, but a wider conversation has to take place so that CARICOM destinations can engage with the travel trade as a single body.’
He said the importance of the region working together ‘As One’ was highlighted ‘most profoundly’ during a recent CHTA webinar, ‘where representatives of the International Air Transport Association (IATA) and global and regional airlines made it crystal clear they have no desire to deal with dozens of different requirements from different islands, insisting that a common position be adopted by the Caribbean.’
‘Let’s face it, the straight and narrow point we cannot get away from is that we are individual islands only to those of us who reside in the Caribbean.
‘But to the rest of the world we are one bloc — and we need to understand that to fight our way out of this crisis, so my best advice, particularly for tourism-dependent Caribbean economies, is that we need to start acting seriously as one body.’
He also urged that all ‘try to better understand the serious nature of the challenges facing governments’ – and that governments also understand that this is neither a race for the swift, nor for those who stand still…’.
The regional tourism expert made it clear, however, ‘It’s not easy for anyone, far less the governments.’
He warned: ‘It is a difficult situation to find oneself in and only political leaders with the greatest vision, the greatest gumption and the strongest will, will survive this punishing COVID crisis.’
Meanwhile, our source’s advice that governments need to double-up with all-hands-on-board is already being taken by the smaller CARICOM territories that belong to the Organization of Eastern Caribbean States (OECS).
Just as this report was being prepared for publication, the OECS Authority announced it had appointed Prime Minister Allen Chastanet to head a committee to strategically plan the reopening mechanism for the tourism sector for the region.
The statement said, ‘Saint Lucia’s Prime Minister was appointed in light of the ideas and initiatives he has already put forward and given the experience of the Prime Minister with the Tourism Sector and challenges the industry has faced in the past.’
It also said, ‘Prime Minister Chastanet has explained that chief amidst concerns about the reopening of the tourism sector is maintaining public health and safety.’