As the world’s most tourism-dependent region, the Caribbean has been battered by the coronavirus shock to international travel. 

In the worst case scenario, visitor numbers to the region in 2020 could fall by as much as 71% compared with 2019, leading to the loss of 2 million jobs and $44bn of regional gross domestic product (GDP), according to the World Travel and Tourism Council (WTTC).

Following the national lockdowns and border closures implemented in March, Caribbean countries have been keen to reopen their borders to reinvigorate a sector that will be key to driving the region’s economic recovery post Covid-19.

However, local businesses and governments face an uphill struggle. After recovering from a destructive hurricane season in 2017, countries now face the dual threat of containing coronavirus together with the annual hurricane season, which runs from June 1 to November 30 – and is expected to be “above-normal” by NOAA’s Climate Prediction Center.

Covid-19 caution 

The first eastern Caribbean islands began gingerly reopening their borders in June, with their neighbours following suit in July. However, even with health protocols in place, the challenges of lifting travel restrictions in a pandemic-hit world have been laid bare. 

In the Bahamas, where tourism contributed 43.3% to GDP in 2019 according to the WTTC, there was a surge in coronavirus cases less than three weeks after reopening to international tourists.  

The government then closed its borders to tourists from the US – which has the highest number of coronavirus cases in the world – before reopening them with a mandatory 14-day quarantine upon arrival. Puerto Rico also rolled back its reopening in mid-July after a surge in cases. 

“There is a really mixed feeling amongst people. They need to work but are concerned about being exposed, particularly to American tourists,” says Ralph Birkhoff, an Anguilla-based businessman and economic development consultant at the Inter-American Development Bank. 

In the face of outbreak risks, many countries have mandated inbound travellers to provide a negative Covid-19 test upon arrival, and have set up travel corridors from airports where tourists can safely self-isolate away from residents. Regional efforts through the Covid-19 Caribbean tourism task force have also provided safety guidelines and training for tourism workers.

Yet concerns persist in the region over the current viability of safe tourism. The cruise industry, which brought more than 11 million tourists to the Caribbean in 2018, is currently suspended in the US and some observers now question its long-term viability.  

“People are recognising that the cruise ships are not the healthiest model and there will likely be a reassessment in a lot of countries of their tourism product and who they’re targeting,” says Marla Dukharan, an economist based in Barbados who has analysed the pandemic’s economic effects on Caribbean tourism. 

Different approach 

Lyndell Danzie-Black, a Caribbean consultant based in Guyana, says many hotels have shifted their focus in the face of dwindling international arrivals. “Hotels are doing weekend away bundles targeting domestic tourists, while other hotels are focusing on food delivery,” she explains.

Neil Waters, acting secretary general of the Caribbean tourism organisation, says the crisis has provided “the opportunity to analyse and deconstruct the regional tourism sector at a granular level, identify areas for improvement and look for new ways to enhance our tourism product”.

In July 2020, Barbados announced a 12-month residency scheme aimed at attracting international remote workers to stay and work in the country for a year. Then on August 1, Bermuda launched its own “one-year residential certification” scheme. “A lot of islands are considering [similar schemes] because it created such a buzz,” says Mr Birkhoff. 

Ms Dukharan says the region can benefit greatly from tapping into the growing trend of remote work, and that the traditional model of tourism in the Caribbean will have to change. “It is much safer for domestic residents and much more consistent in terms of economic activity to have digital nomad residents here, as opposed to tourists coming in and out during peak and slow seasons,” she adds.  

However, the Caribbean could also still improve its competitiveness as a tourism destination. An IMF index that compared the average price of a one-week beach holiday around the world found that several Caribbean islands are among the most expensive destinations.

“I think that an emphasis on agriculture and renewable energy will go a long way in helping to drive at least efficiency and competitiveness,” says Ms Dukharan – since Caribbean countries tend to be net importers of the energy and the food they consume. 

Mr Birkhoff says the region also needs to offer a wider array of touristic options. “I think there are better opportunities [for the Caribbean] in more diversified tourism. We need to start developing more ecotourism, adventure tourism and historical tourism.”

Wary investors

In the first half of 2020, just three greenfield tourism projects were announced by foreign investors in the Caribbean, a contraction of 70% compared with the same period in 2019, according to the latest data from greenfield investment monitor fDi Markets. This exceeded the 62% decline globally.

With international travel as we knew it unlikely to restart any time soon, new FDI projects have ground to a halt across the region. Yet there are signs of confidence. Diane Edwards, president of Jamaica’s Promotion Corporation (Jampro), says that three out of the four biggest hotel projects in Jamaica are going ahead despite disruption.

The type and extent of tourism investments in the future is still uncertain, however, until the industry returns to normal post-Covid. Mr Walters is confident that the Caribbean tourism will emerge from the pandemic stronger, but it will look very different. “The key difference will be significant integration of tourism and health functions to ensure the safety and health of visitors and locals alike,” he concludes.

But the immediate outlook is bleak, with Unctad expecting the global tourism industry to lose at least $1200bn in 2020.

This article first appeared in the August - September edition of fDi Magazine.