As we reach the end of the beginning of the COVID-19 crisis, westernised countries are starting to relax lockdown measures across the continent and the North American regions. A sense of normality whatever the new normal will become is starting to appear. Most economies are comfortable with the projections that a V-shaped recovery is most likely for the majority of sectors but certain sectors have only just begun their troubles. Western economies will find ways to overcome and support industries such as travel and hospitality, but the real danger is in the developing world with economies such as the Caribbean and Indian Ocean-based islands who rely so heavily on trade and tourism via aviation and cruise in particular.
Whilst UK citizens dream about our summer holidays, the local people in the Caribbean region dream of tourism returning to help the economic revival of their countries. This is where the long-term issues will arise. There is no doubt that millennials are desperate to return to travel and there will be a huge bounce back in demand from millennials and Gen Z, but in slightly older demographics there’s now greater caution in returning to tourism. When you look at the typical demographic of travellers to the Caribbean region, this presents a worrying obstacle for the Caribbean. With comparatively expensive flights and hotel products, millennials are more likely to stick to the more popular south-east Asia markets; given how reinforced the message has been for older generations not to travel, the recovery of the Caribbean economy may be slow and painful.
Entering into the typically slow summer season in the Caribbean, a lot of hoteliers will be very wary about reopening without the guarantee of demand from tourists for flights and without a real government stimulus and support to get them through to the start of the new season. We could see grave consequences for tourism in the Caribbean region especially.
With airlines such as BA and Virgin, who are key players in the Caribbean tourism industry release slow return to service schedules it could be many more months before meaningful tourism happens in the Caribbean region.
If we look at Virgin and British Airways both face tremendous struggles over the Covid-19 outbreak period with significant job reductions, fleet reductions and operating base reductions with Virgin only flying from Heathrow – these factors will have long-term negative effects on those airlines and in turn the consequences will be felt by the Caribbean. Every flight is vital for the economy, any reduction in capacity will lead to years of economic damage. Airlines will be under even greater cost-pressure to fill the seats and to make routes profitable, but they will also have the flexibility to pull routes and flights in order to maximise profits and revenue – routes may even become more seasonalised. There aren’t many other long haul options for the Caribbean outside of BA and Virgin and with Norwegian scaling back till next year it’s vital that both of these airlines are in a position to maintain current schedules and deliver the passengers that the region will need in order to recover.
The other issue affecting the Caribbean countries is cruise. If we look at sources of income to people at the lower end of the scale for example local traders to taxis to local restaurants, the cruise arrival tourists are essential. But in reality it will almost certainly be the last industry to get back to normal and that new normal may take a vaccine or a viable treatment option to become reality. We shouldn’t underestimate the vital contribution cruise passengers are for the Caribbean nations. With the issues in Florida and Texas, Caribbean cruising is likely still months away.
For years economic diversity was needed in the Caribbean, but no one could really define what that diversification should look like – now it’s needed more than ever.
So in summary the Caribbean region with its trading partners needs the right messaging and a near-perfect medical response in order to return to tourism with any meaningful returns in 2020.