The Recovery of Tourism Must Begin Now
The impact of COVID-19 on tourism
The Caribbean Public Health Agency (CARPHA) recently upgraded the risk of transmission of COVID-19 to the Caribbean Region to Very High. The projection is now that the impact of the COVID-19 pandemic on Caribbean economies could be worse than that of the 2008 Global Recession. The tourism sector is likely to be the hardest hit of all the major economic sectors in the region.
Before the full onslaught of the pandemic, it was projected that Caribbean tourism would grow by 5 to 6 percent in 2020. Various destinations have, however, since revised their projections to reflect the declining fortunes that most destinations have been witnessing over the past several weeks and will continue to experience indefinitely in the coming months to years.
The entire tourism industry in many destinations is now facing imminent closure as a consequence of the strict measures being adopted by authorities both domestically and externally to contain the spread of COVID-19. The imposition of international travel restrictions in many source markets has forced the cancellation of thousands of flights and advance reservations.
Major hotel chains across the region have reacted by announcing suspension of their operations and have sent home thousands of workers. Jamaica is projected to lose US$564 million in 2020 as a direct impact of the virus while the Bahamas faces a US$2.7 billion in lost tourism revenues if the pandemic shuts down stopover visits for the rest of 2020.
The socio-economic fallout from any prolonged disruption to the tourism sector will be dire for the region. The tourism sector supports 16 out of 28 economies in the Caribbean. The Caribbean is, in fact, the most tourism-dependent in the world with 10 of the 20 most tourism-dependent countries in the world being located in the region led by The British Virgin Islands with 92.6 % dependence. Jamaica is listed among these 10 Caribbean countries.
Overall, Travel & Tourism contributes 15.2% of the Caribbean’s GDP and 13.8% of employment. However, in around half of the countries analyzed, the sector accounts for over 25% of GDP – more than double the world average of 10.4%. In Jamaica, tourism directly employs 120,000 people and generates another 250,000 indirect jobs, equivalent to 1 in 4 Jamaicans.
The pace and consistency of tourism growth in the Caribbean has outpaced most other sectors in the region. The data indicate that in virtually all Caribbean countries the contribution of agriculture to GDP has fallen over the past 5 decades. The mining and manufacturing sectors have witnessed similar patterns of decline. In contrast, the tourism sector has been growing at an estimated rate of 5 percent per annum since the 1970s.
Tourism in Jamaica has expanded by 36 percent of the last 10 years relative to total economy growth of 6 percent. More importantly, tourism has established valuable linkages with the manufacturing and agricultural sectors as well as several others including transportation, telecommunications, utilities, banking and finance, food and beverage, and culture and creativity.
Evidently, a healthy tourism sector is indispensable to the region’s sustained economic progress. In recognition of this fact, efforts must be doubled to expediate the recovery of the sector. Ideally, recovery interventions should be based on intensified partnerships between government and the private sector aimed at protecting the livelihoods of workers, providing fiscal support through the extension of vital, interest-free loans to tourism entities, and injecting liquidity and cash to support tourism enterprises of all sizes, as well as offering targeted support to severely-affected segments within the sector.
Ultimately, the magnitude of the impact of COVID-19 on tourism will depend crucially on not only the spread of the virus and the duration of the outbreak but also on the measures countries in the region and elsewhere undertake to save the sector from indefinite uncertainty.