The straight and narrow

The straight and narrow

How does the Caribbean tourism industry survive COVID-19?


Thursday, May 28, 2020

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At first glance, the outlook is bleak, the future glum. The tourism sector has been badly infected by the COVID-19 crisis, and its symptoms are pretty severe, but while many are working hard to find a treatment, the jury's still out on whether tourism will recover in the short term, or be a major casualty.

What are the implications if tourism cannot be sufficiently resuscitated in the near future?

First off, 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?

Many of the islands do not have properly developed manufacturing nor agriculture sectors. Simply put, without tourism dollars countries are going to find it hard to feed themselves. Several Caricom countries import between 80 per cent and 90 per cent of their food, and without foreign exchange this is going to create a major disruption in the food supply. 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.

What does this mean for families?

Higher prices mean that the cost of living is going to increase. People who are already without jobs or cash-strapped will find themselves being unable to afford many items. 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. This will result in further job losses and further loss of revenue to the Government.

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 International Monetary Fund (IMF). The IMF has already received requests from close to 200 countries, and even with its US$50-billion rapid-disbursing emergency financing system, there's no guarantee that this will be enough, especially for many Caribbean countries that already have high debt-servicing obligations.

So it all brings us right back to where we started, and that is: 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. One group of stakeholders already leading the way are the major hotels. Recently companies like Marriott, Hilton, and Sandals Resorts unveiled in-depth measures to ensure higher levels of hygiene and protection at their facilities.

Marriott has introduced what it calls its Global Cleanliness Council to implement and oversee higher standards of cleanliness at its hotels. The council will comprise people from several sectors relating to health and hygiene, and has created a new, enhanced cleaning regimen. President and CEO of Marriott Arne Sorenson said the chain wants guests to understand that the commitment to health and safety was a priority.

Hilton, meanwhile, launched what it's calling its CleanStay initiative with Lysol Protection. The company 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 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 standards of operating for its resorts in the region, focused heavily on sanitising and new standards for physical distancing. The resort 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”.

Probably more than any other hotel executive, Jamaican-born Chairman and Founder of Sandals Gordon “Butch” Stewart understands the urgency of getting the tourism sector back up and running for the survival of many Caribbean islands. According to the Sandals chairman, “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, healthier stay.”

The resort chain will be depending on an ongoing relationship with medical professionals guided by the Centers for Disease Control and Prevention (CDC), the World Health Organization (WHO), as well as local health authorities.

The measures taken by the major hotel brands will depend heavily however on other matters being sorted out, including the reopening of borders, whether airlines will be flying or if there will be reduced flights, and whether people are going to feel comfortable enough to go on a vacation any time soon.

Many airlines, for their part, have also been introducing new cleaning standards which include regular sanitising 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 high-efficiency particulate air (HEPA) 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 a suggestion to leave middle seats empty. The big question for the airlines is how sustainable these measures will be, 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. JetBlue, while taking part in a Caribbean Hotel and Tourism Association (CHTA) webinar recently, said it had no plans of flying routes where it was going to be losing money.

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 needs to become more active and more vocal in engaging stakeholders and trying to plot a way forward.

COVID-19 has created an economic and social time bomb just waiting to go off, and the clock is rapidly counting down. The seriousness of the current predicament has already forced action in Jamaica, where the Andrew Holness-led Government has found support from the Opposition, which has also recognised the hardships that lie ahead for the people of that island if immediate action is not taken to get things back up and running. That's what it takes: All hands on deck.

Other Caribbean territories have to take note of the fact that they need to start planning beyond survival mode to prevent replacing a health crisis with a debilitating economic and social crisis. 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 travellers, 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 there is a glimmer of light at the end of the tunnel for Caribbean destinations. A recent study by Tourism Economics, an Oxford economics company, on economic and travel outlook post-COVID-19 suggests that, while the immediate 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. 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 impact international travel as well. Based on what happened post-SARS, the study found that once recovery begins, travel will surge.

Well, that's great news, but great news only if you start preparing for the surge when it happens, and to do that you need to survive the short term, which brings us right back to the necessity for the Caribbean to start working together. We have seen certain territories start to release 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. The importance of that was highlighted most profoundly during the recent CHTA webinar, where representatives from International Air Transport Association (IATA) as well as global and regional airlines made it clear that 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, we are individual islands only to those of us who reside in the Caribbean, to the rest of the world we are one bloc, and we need to understand that to fight our way out of this crisis, particularly for tourism-dependent economies, then we need to start acting as one body.

It is a difficult situation to find yourself in, and only political leaders with the greatest vision, the greatest gumption, and the strongest will are going to survive this crisis.

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