While Caribbean tourism industry stakeholders are encouraged by growing signs of a recovery on the horizon and most businesses have reopened or are planning to, many tourism-related businesses will remain challenged to return to pre-pandemic employment and operation levels.
Lost revenue, little measure of recovery support and stimulus, coupled with added expenses – including covering carry-on costs to support employees, ongoing utilities, financing and other operating expenses – have placed many hotels and tourism-related employers at risk and threaten their ability to recover, or recover quickly, over the coming months.
“The downside effects of a slower recovery could have an even more damaging impact on Caribbean governments and businesses, and threaten the return to work for many in a region where tourism has been the economic mainstay,” according to Vanessa Ledesma, acting CEO and director general for the Caribbean Hotel and Tourism Association.
“Ironically, the region is well-positioned to recover quickly because of Caribbean tourism’s strong appeal and proximity to major travel markets where consumers are anxious and have already begun to escape,” said Ledesma, who is optimistic about the region’s recovery but shares the concerns cited in a COVID-19 Tourism Business Impact and Recovery Survey recently conducted by CHTA.
Approximately 14 percent of industry stakeholders indicated they are likely or highly likely to permanently close as a result of the pandemic, while 37 percent indicated that permanent closure is a possibility. This news comes at a time when most Caribbean hotels and tourism-related businesses either have reopened or are planning to reopen in the coming months.
The CHTA outreach was the third in a series of surveys the trade association has undertaken over the past year. The surveys have measured the impact of the pandemic on the region’s largest industry and have helped to guide CHTA, the industry, policymakers and support institutions as they consider policies, operational practices, marketing and communications strategies, training and support efforts aimed at accelerating and stimulating tourism’s recovery.
The initial survey results last year helped to guide the industry in putting in place health safety protocols and operational practices in collaboration with the Caribbean Public Health Agency and the Caribbean Tourism Organization. These protocols, together with effective policies by many of the region’s health authorities and governments, have contributed to the Caribbean’s success in containing COVID-19 to a level below the global average.
The recent survey results indicated that 38 percent of Caribbean tourism-related employers were able to keep employees on staff at some level throughout the pandemic, with 78 percent of employers incurring the labor costs at their own expense without government support. Thirty-two percent indicated their government was able to provide some level of support for impacted employees.
As they look to recover, employers cited a range of added costs they are incurring to put in place the necessary health safety protocols to protect employees and guests. These include the purchase of personal protective equipment and supplies; new technology to support health safety measures; construction, materials and furnishings to retrofit public areas (e.g., reception areas, restaurants, retail spaces and spas); and the cost of COVID-19 testing equipment and supplies for employees and guests.
Only 11 percent of employers reported receiving any tax or duty relief to support the purchase of new health safety-related equipment, materials and supplies, placing an added financial burden on the cash-strapped businesses.
Employers cited a number of areas where support would help to minimize the threat of closure and speed up recovery. These included increased marketing and public relations efforts by industry and government; unemployment support for those employees who still have not fully returned to work; tax credits to support the rehiring of employees; electricity relief; collaborative efforts to stimulate the return of airlift; low-interest, soft loans and payment deferrals from banks; and tax relief and payment deferrals.
To receive a summary of the survey results, visit www.caribbeanhotelandtourism.com/covid-19.