Caribbean is the most COVID-resilient zone in the Western World
Generation C is the new normal
Through a combination of decisive leadership, swift action, and effective communication, the Caribbean has been largely spared the direct onslaught of COVID-19 in terms of both the virus’s transmission and mortality rates. Even before the region had recorded its first COVID-19 case, The Caribbean Public Health Agency upgraded the risk of COVID-19 disease transmission from low to “moderate to high.” Subsequently, Caribbean countries quickly introduced strict public health measures including the closing of borders to international travel, social distancing rules, work from home solutions, curfews, and in some cases, lockdowns.
• The latest data indicate that several countries in the region have already begun to turn back the tide against COVID19 with increased testing and more isolation resulting in increasing numbers of recoveries. In Jamaica for, for example, we have tested 10,230 samples with 9, 637 of them being negative and 552 testings positive. Of the 552-testing positive, 211 have already recovered.
• Recently, Trinidad and Tobago, with its last recovery, is now among eight Caribbean countries that have brought active cases of the novel coronavirus (COVID-19) to zero. The other seven members of the Caribbean’s elite ‘coronavirus-free’ club are St Kitts, Dominica, Monserrat, Anguilla, Belize, St Lucia, and Saint-Barthélemy.
• While the emerging consensus is that COVID-19 will pass, with some countries in the region already making plans to reopen businesses and borders for tourism and international travel, the economic impact of the pandemic on tourism is expected to last much longer. Globally, the pandemic will likely result in a contraction of the tourism sector by 20% to 30% in 2020. While many economic sectors are expected to recover once restrictive measures are lifted, the pandemic will probably have a longer-lasting effect on international tourism. This is largely due to reduced consumer confidence and the likelihood of longer restrictions on the international movement of people.
• The risks and shocks associated with the prolonged downturn in international tourism are likely to be disproportionately higher for the Caribbean which is the most tourism-dependent region in the world. In the region, tourism accounts for between 11 and 19 percent of direct output gross domestic product (GDP), and between 34 and 48 percent of total GDP in The Bahamas, Barbados, and Jamaica. Tourism flows are also responsible for similarly large shares of direct and overall national employment, with all three countries ranking in the top 20 globally on both measures.
• Since March, there has been very little to no tourism activity in most Caribbean countries. The pandemic forced most countries to completely close borders for both passenger air travel and cruise ships. Most hotels have received no guests since March and their staffs have been sent home indefinitely. Most destinations have been forced to revise the original end of year revenue projections for 2020 based on the high rate of flight and advance bookings cancellations. Over the next six months, it is quite possible that tourism in the region could decline by 50% or even 80% or 100%. S&P expects that tourism in the Caribbean will probably decline by 60-70% from April to December compared with last year. The rating agency has already downgraded the Bahamas and Belize this month further to junk status, while lowering the credit outlooks in Aruba, Barbados, the Dominican Republic and Jamaica to negative.
• The most immediate impact of the fallout is on employment. The tourism sector in Jamaica directly employs 160,000 persons. With the closure of most hotels and accommodations, an estimated 120,000 workers have been retrenched with only 40,000 workers retained, some of whom are now earning dramatically reduced incomes. Unfortunately, tourism-dependent economies like ours throughout the Caribbean region have limited social safety nets. This means that our people, economy, and future are far more likely to be wrecked by COVID-19 than nations with more diversified economies. Today, airports and hotels here are shuttered, unemployment throughout the region is soaring, and nobody knows when these tourism sector jobs may come back.
• Our economies need to create thousands of jobs for furloughed tourism-sector workers. They need them quickly. However, unlike the EU, UK, or US, governments in the Caribbean cannot afford to offer wage subsidy furlough schemes.
• It goes without saying that our most urgent priority is to secure the health and livelihoods of tourism workers and prepare the sector for reopening in the shortest time possible. To do this requires a combination of factors.
• In Jamaica, our approach has had several facets including providing economic stimulus, helping businesses to access benefits, partnering with financial institutions to relax loans arrangements and improve access to credit, identifying alternative supply chains and promoting Digital marketing, human resource development
• We have made available $2 billion in grant assistance for tourism and small businesses impacted by the Coronavirus (COVID-19) outbreak. We have rolled out our Business Employee Support and Transfer of Cash (BEST Cash) initiative to provide temporary cash transfers to registered businesses operating in the hotel, tours, attraction companies. All small businesses with sales of $50 million or less who files taxes in the 2019/2020 financial year, and who filed payroll returns indicating they have employees, will be eligible for one-time COVID Small Business grant of $100,000
• All small businesses with sales of $50 million or less who files taxes in the 2019/2020 financial year, and who filed payroll returns indicating they have employees, will be eligible for a one-time COVID Small Business grant of $100,000. The Tourism Product Development Company (TPDCo) along with the Jamaica Tourist Board (JTB) will spearhead the process of collecting data from our subsector suppliers who will need to access these benefits.
• The TPDCo has recommended a moratorium on JTB licenses for six months, from April to September 2020. it is projected to forego J$9.7million of earnings in licensing fees.
• We have entered into discussions with commercial banks for them to provide temporary cash-flow support to businesses and consumers in affected sectors through deferral of principal payments, new lines of credit and other measures. So far most of the major financial institutions have responded favorably. Some banks have been reaching out to tourism MSMEs directly impacted by COVID-19 to provide customized solutions to meet their needs.
• Since April, we have been providing 11 free online courses for tourism workers as part of the Government’s thrust to ensure the continued development of employees in the sector. The courses are offered in areas such as laundry attendant, gift room attendant, kitchen steward/porter, public area sanitation, hospitality team leader, certified banquet server, certified restaurant server, Servsafe training in food safety, certified hospitality supervisor, introduction to Spanish, and disc jock (DJ) certification.
• We recently unveiled a five-point plan for the recovery of the tourism sector which includes developing robust health and safety protocols, increased training for all segments of the tourism sector, building safety and security infrastructure, and acquiring PPE and hygiene tools.
•so in a nutshell, we here in the Caribbean are finalizing our product to ensure that both our Caribbean citizens and our visitors operate in a safe environment – this is the new normal for what I call the post COVID generation or generation C.