The main threat to the Caribbean countries, along with the coronavirus epidemic, is the almost complete break of tourism activities. As tourism is their main source of income, which in some states contributes more than 50% of the economy.
Frank Comito, general manager of the Caribbean Hotels and Tourism Association (CHTA), emphasized the current crisis in the region.
Comito warned that hotel occupancy in CHTA-related businesses had dropped from 76% to 10% in just three weeks in March. The terrible news was a part of the nightmare that the epidemic will represent the Caribbean to this day.
After a 3-month lockdown in most small Caribbean states, the region was finally reopened in early July, and within a few weeks, the system saw an abnormal increase in coronavirus cases, forcing local authorities to return to lockdowns.
Experts warned that the situation is critical, as tourism is the main economic engine for most Caribbean countries. While it contributed 59 billion USD to its economy in 2019, as well as created another 2.7 million jobs also.
According to the CHTA, the Caribbean tourism industry has lost about 8 billion USD and more than 1 million jobs from mid-March to May due to coronavirus.
Puerto Rico lost between 5 and 10 billion
Jose Caraballo, former president of the Puerto Rico Association of Economists, says the island’s economy has lost 5 to 10 billion dollars since the epidemic began.
“The problem is that there is no plan B for losses in these industries – tourism and entertainment,” he recalled, adding that there are people in Puerto Rico who have not got any unemployment benefits from March.
The lack of tourism has been reflected in the income of hotels. Demand for hotel rooms and short-term rental properties on the island fell by 48% in the last week of July compared to the previous two weeks, according to the latest data available.
Caraballo said the situation in Puerto Rico could be extended to the rest of the Caribbean, where he believes the situation is much severe, as tourism alone contributes about 7% of Puerto Rico’s GDP compared to a few smaller islands in the region where tourism far exceeds 50%.
The Caribbean is one of the regional economies that are dependent on tourism, and therefore most affected by the epidemic. Only the Bahamas, an archipelago with a fiscal deficit of 1.3 billion USD.
Moreover, the public debt of the Bahamas has exceeded 60% of GDP, with the unemployment rate hovering around 10% for more than a decade.
Tourism accounts for 60% of Bahamas GDP
Tourism alone generates about 60% of the Bahamas’ GDP and about half of the country’s employment, which gives an idea of what Covid-19 means for the Atlantic Islands.
According to the local authorities, if the coronavirus epidemic continues by the end of 2020, the Bahamas could lose 2.7 billion USD in tourism revenue.
A report by the Inter-American Development Bank (IADB) said the island’s GDP saw a dramatic drop of more than 25% in the worst-case scenario.
Another great tourist
Another great tourist power in the region is Jamaica, a country where the industry has added about 20% of its economy and has been severely damaged by epidemics. Forecasts are that if this situation continues, Jamaica will close the year with a decline of more than 10% in its GDP.
The Jamaica Hotel and Tourist Association has explained that tourism will generate about 1.5 billion USD this year, down from an estimated 4.4 billion USD before the epidemic.
About 100,000 people in Jamaica are directly employed in the tourism industry and at least one and a half million people work indirectly, almost all of them are currently unemployed.
According to Finance Minister Camilo Gonsalves of St. Vincent and the Grenadines, two-thirds of the country’s economy depends exclusively on tourism, so the current situation and lack of tourism present an unprecedented crisis.
As the small Caribbean island of Anguilla, it returned to tourism again on August 21 but enforced some strict rules of entry, which could discourage its main source market, many Americans.
One of the most affected regions in the region is Antigua and Barbuda as its economy depends on tourism at 60%. Despite the reliance on the tourism industry, all passengers arriving by air in August will have to present the results of the negative COVID-19 test taken seven days before the flight.
Regarding the Cayman Islands, the director of the port authority, Joseph Woods, announced the extension of the cruise ship ban from October 1 to December 31 as a precautionary measure against Covid-19.
In the end, the Cayman Islands decided to delay the resumption of its international tourism (originally scheduled for September 1) until October.
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