When COVID reared its ugly head on cruise ships, management was asleep at the wheel.
- Tourism issues, that could have been corralled and addressed in its early stages was allowed to grow and assault the entire planet.
- To this day, cruise line and tourism executives, government bureaucrats, and elected officials often refuse to take responsibility for their negligence.
- Many of those in charge of the cruise or tourism industry never offered an apology for their disregard of facts and science and their “head in the sand” approach to the management of their organizations and the well-being of passengers and crew.
The devasting collapse is a product of the Caribbean’s absolute failure to diversify its economic activity and a myopic view of its own resources. This is one of the least diversified areas of the world with tourism accounting for 14 percent of GDP in 2019, the most of any region. The LAC countries are among the most crises-prone in the world and natural disasters are more like everyday activities rather than shocks or surprises. What is new, however, is the tragically high and frightening speed and persistence with which the coronavirus has affected the economic foundations of these locales.
Coming out of enforced hibernation, the hospitality, travel, and tourism executives who have survived the worst of the pandemic are now left with the enormous task of weaning the industry away from life support and nursing it back to health.
Like anyone who has been sick – there is a need to take steps (frequently baby steps), in order to move from sickness to wellness. If the patients are lucky, friends, family, and good advice from online Google pundits will provide pathways to recovery. Patients may stumble and back-slide a few times, but with grit and determination, they will recover and be ready for combat.
According to the Inter-American Development Bank (IDB) the COVID-19 pandemic led to the worst economic decline in Latin American and the Caribbean in two hundred years. Beyond the economic hardship is the destructive impact of the pandemic on the region’s society and health systems. Although the region represents just 8 percent of the global population it has reported 28 percent of all deaths (atlanticcouncil.org).
Even before the pandemic, the region’s overall economic performance was the worst in the world measuring only 0.1 percent growth in the gross domestic product (GDP) during 2019. Between 2013 and 2019, the Latin America and Caribbean GDP growth averaged 0.8 percent and the region has never been able to develop a sustainable economy.
The countries are largely divided in terms of access to public and private goods, ranging from economic and educational opportunities to healthcare and a clean/safe environment made worse by high levels of labor informality, low private investment (16 percent GDP), compared to other regions, and this impacts on productivity, innovation and formal job creation (cepal.org, 2020).
From the closing of airports and the restrictions on travel for consumers, the Caribbean tourist arrivals fell by 67 percent in 2020 according to UN data, the IMF determined that annual hotel stays fell by 70 percent, and cruise ship travel completely stopped.
Despite vaccination programs and the gradual reduction in travel restrictions, the Caribbean recovery is very slow forcing the International Monetary Fund (IMF) to lower its 2021 projected growth rate from 4.0 to 2.4 percent regionwide. There have been at least 38,789,000 reported infections and 1,310,000 reported deaths caused by the novel coronavirus in Latin America and the Caribbean (graphics.reuters.com). Of every 100 infections last reported around the world, approximately 26 were reported from countries in Latin American and the Caribbean. The region is currently reporting a million new infections about every 8 days and has reported more than 38,789,999 since the pandemic began.
The reduction of tourists forced the industry to reduce employment – which, in a region where tourism accounts for 2.8 million jobs (about 15 percent of total employment). This is a serious economic hit. In all, the Caribbean lost more than 2 million jobs due to the pandemic (International Labor Organization), many in the tourism sector.
As LAC countries face new waves of the coronavirus amid a slow vaccination campaign, recovery will be difficult. Major properties have closed: In the Dominican Republic, the 400 room Excellence Punta Cana resort; in Jamaica, the Half Moon Hotel Jamaica (400); in St. Kitts, the 50-room Ocean Terrace Inn.
On the other hand Sandals Resorts together with Beaches Resorts had kept advertising going, developed their own system of vaccine and tourism safety and health standards. The result had been excellent occupancy rates throughout the crisis, based on consumer trust developed through aggressive outreach campaigns.
Sandals and Beaches Resorts promised a worry-free vacation and were able to deliver on this promise so far.
Tourism is unlikely to rebound until the region gets the virus under control. Currently, the Pan American Health Organization finds the hemisphere is “in the midst of a worsening outbreak,” and the virus continues to island-hop in the Caribbean where daily case numbers rise, and indebted Caribbean governments have few resources to keep their economies afloat.
Jamaica’s Minister of Tourism, Edmund Barlett looked at the broad issue with a global eye and took ownership of the problem. It allowed Jamaica to contribute to a solution and made the Caribbean voice heard loud and clear. Jamaica became the home of the Global Tourism Resilience and Crisis Management Centre with branches in Malta, Nepal, Kenya, and soon also Saudi Arabia. Bartlett told eTurboNews, that he is pleased about the rebound in current visitors’ arrival numbers.
Loss of employment in the tourism sector impacts almost entirely on youth, women, and less-educated workers and therefore increases poverty and inequality. The lack of diversity and sustainability also heralds business closures and bankruptcies among hotels, resorts, and other sectors associated with tourism services (i.e., restaurants, retail, tour operators, taxi drivers). With the reduction in airlift and the continued conflict with go/no decisions in the cruise line sector, industry partners dependent on cruise line passengers have no recourse if the ships are permanently canceled or rerouted to other destinations.
The Caribbean region exists largely on debt. Although the international monetary community has opened its collective wallet to meet the need for public spending in the region, the support has been a double-edged sword; the near-term pressures have been alleviated but many countries now face a challenge as growing fiscal deficits and borrowing becomes harder and the crises persist.