Marlon Madden Barbados Today May 13, 2021
One American Airlines official is forecasting a major increase in airline capacity to Barbados and other Caribbean destinations out of the United States towards the end of this year.
Christine Valls, Vice President of Sales for Florida, Latin America and the Caribbean, gave the optimistic outlook while pointing out that current capacity on the airline could dip as low as 30 per cent on flights to some Caribbean destinations.
She opted not to name those countries but pointed out that on average the cumulative load factor to the region was around 60 per cent and was even higher for some markets.
“The Caribbean pleasure destinations are doing well right now, and actually for the month of May we are holding about a 76 per cent load factor for the pleasure markets,” she said while singling out Puerto Rico, Haiti, St Thomas and St Croix as markets that were continuing to “do well” during the pandemic.
Valls said most people were making their bookings and purchasing tickets within days of their travel, making it more difficult to measure the medium to long-term outlook.
She said it was also still too early to say what impact the vaccine was having on travel numbers up to this point.
However, she said given the continued partnership the airline had with companies and governments to promote the destinations, and the pent-up appetite among individuals in the US to travel, she was expecting to see that increase in bookings for later this year.
“It is Florida, the Caribbean and Mexico that have been the markets that have seen the most traffic by far, by any entity globally, at least from an airline perspective. People want to go to a place where there is sun and it is short-haul. So there has been a lot of appetite . . . We have been seeing that since October and November, that trend started picking up,” she said.
“There is an appetite to go to the Caribbean . . . and I think the Caribbean jointly between the nations and the airlines and the hotels we can really capitalize on this,” said Valls.
She said for the region to better capitalize on the pent-up demand for travel it would be a big plus to have “the same requirements” in place.
“I believe standardizing requirements would really help. It is still confusing for customers to know exactly what is it that they need and ensuring the safety of customers; educating them and ensuring that they understand the tests are provided at the hotels; and we have to do some more co-op on advertising between the islands, hotels and airlines to ensure that people know exactly where they can go and what they need in order to go,” she explained.
She declared that American Airlines will be increasing flights this summer.
“We are currently flying 90 daily flights and we will be up to 108 for Saturdays only and this summer we will be flying 108 daily flights and about 140 on Saturdays.
“We feel the Caribbean will continue to recover,” she said.
“I see the Caribbean booming come fourth quarter. We are already seeing some of the islands perform better than they did in 2019. As more people get vaccinated, as people feel more comfortable in travelling, and us together with the islands [working] to develop the programmes, advertising and promotion of the islands, I believe the Caribbean will be booming come fourth quarter,” she added.
American Airlines resumed flights to Barbados out of Miami in October last year with five flights per week.
Valls’ optimism comes on the heels of a similar outlook by Chief Executive Officer of British Airways Sean Doyle as it relates to travel out of the UK, and Royal Caribbean International President Michael Bayley, who said while future bookings for Caribbean cruise were strong, he was upbeat about the strong response for cruise to originate out of Barbados starting in December.
The company is expecting a travel rebound but will likely need more hosts to meet demand.
By Laura Forman Wall Street Journal May 13, 2021 6:18 pm ET
Last summer, its Chief Executive Officer Brian Chesky said Covid-19 wiped out nearly everything his company had built over 12 years in a matter of weeks. Now, with vaccines widely circulating, Mr. Chesky says we are about to have a travel rebound “unlike anything we have seen before.” He should be careful what he wishes for.
The home-sharing giant reported first-quarter topline results on Thursday that topped Wall Street estimates in a big way. Revenue of $887 million was 23% higher than analysts polled by FactSet had estimated. But the more telling comparison is relative to other online travel platforms: Airbnb grew revenue 5% year on year, while Expedia Group, Booking Holdings and Marriott International reported that their revenue fell by an average of more than 48% over the same period.
Average daily rates rose on Airbnb in the first quarter from last year given a shift in supply and demand for more desirable alternative accommodations such as single family homes. Furthermore, last year’s revenue number was significantly impacted by cancellations when the pandemic first hit.
Perhaps most impressive is that Airbnb said its gross bookings value grew by a whopping 50% in the first quarter from a year earlier and 3% over the same period of 2019, indicating that consumers have grown more confident in their ability to travel again. This level of consumer demand hasn’t been seen industrywide: Both Booking and Expedia reported declines in year-over-year bookings in their first quarter earnings results last week.
The returning demand appears to be creating a supply problem, though, and one that is uniquely acute for Airbnb. Whereas Expedia and Booking can always suggest myriad hotels when alternative accommodations are unavailable and still capitalize on the demand, Airbnb can’t.
Airbnb’s relationship with some hosts became tenuous last year after it decided to refund guests for cancellations booked at the start of the pandemic. That led the company to offer hundreds of millions in relief to hosts, yet it covered only a fraction of their lost earnings. Skift reported this week that active listings on Airbnb grew less than 10% over the last 12 months, citing data from AirDNA.
That isn’t enough. The word “host” appears 74 times in Airbnb’s first quarter shareholder letter, underscoring their importance. As demand rebounds, the company said it launched its first large-scale marketing campaign in five years in February focused not on attracting guests but hosts.
While Vrbo, which is owned by Expedia, remains a far smaller platform than Airbnb, competition might be weighing on supply. Expedia’s chief executive officer Peter Kern said last week that Vrbo hosts make more on average, while a recent Vrbo ad suggests families spend “over twice as much more” on Vrbo than guests on Airbnb. Airbnb has said that between March 2020 and March 2021, the average new host with a single listing in the U.S. earned thousands more than on “a competing travel site.”
Airbnb’s outlook for the second quarter shows supply might not be its only near-term problem. As cross-border restrictions ease and people become more comfortable traveling to urban areas and staying in more densely populated spaces, the company notes that its average daily rates could tick down, weighing on revenue growth and margins.
Another problem is that Airbnb’s exposure to reopening might already be priced in. Even though its shares have retreated 37% from their February high, they are still trading at 15 times forward sales. By comparison, Booking fetches less than 8 times and Expedia less than 3 times.
Travel is coming back as Mr. Chesky predicted, and it does look different. But Airbnb does too.
By Daniel Martínez Garbuno: Simple Flying.
May 13, 2021
Like elsewhere in the world, the Caribbean is currently facing an air transport crisis due to the COVID-19 pandemic. The region is yet to fully reactivate the commercial service of the many airlines that operate there. Nevertheless, the Caribbean must find a way to do so because no other region in the world is so heavily dependent on air travel for social and economic reasons.
A quick outlook of the Caribbean
During a Caribbean Islands Panel, organized by CAPA and hosted by the International Air Travel Association’s (IATA) regional vice-president for the Americas, Peter Cerdá, several industry members discussed the current status of the Caribbean.
According to IATA, the air travel industry provides US$36 billion in GDP to the Caribbean. It also creates 1.6 million jobs, nearly 14% of the whole travel economy in the region.
Before the pandemic, the region had more connectivity than ever, with over 540 city-pair connections to all parts of the world. Since COVID hit the world, the Caribbean lost about 423 of those city pairs. It still has yet to recover all its connectivity.
The regional airlines have suffered quite a lot due to the pandemic. For instance, the Antigua and Barbuda airline LIAT nearly disappeared; the Dutch Government gave a US$3 million mortgage loan to Windward Islands Airways (Winair), and Cubana de Aviación is in the worst financial situation ever.
Peter Cerdá said,
“The Caribbean island states don’t have the luxury of mainland continents, of roads and train systems. They’re highly dependent on air travel connectivity within the region, within the island states, as well as connecting to North America, Europe, and Latin America.”
How can the Caribbean restore air travel?
The Barbados Minister of Transport, Lisa Cummings, gave its four pillars to resume the air travel industry in the Caribbean.
These four pillars are coordination around proactive and reactive measures, identification of minimum standards, balance about quarantining and testing, and access to the technology and testing resources.
Nevertheless, coordination between governments is something that the Caribbean has lacked over the last year. Every country in the region has its own set of rules regarding the control of the COVID-19 pandemic.
Tracy Cooper, CEO of Bahamasair, said,
“We recognize that every country is unique within the Caribbean, and they have their own issues. But if we would have been using more the Caribbean Community (CARICOM), it would make it simpler for the wider global community to understand what and how it is to get it and around each of these countries.”
What data tells us about the recovery?
In June, a total of 66 airlines are operating flights to the Caribbean region, according to data provided by Cirium. They’ll be offering 39,959 flights, with over five million monthly seats. The leading operator will be JetBlue with over 7,280 flights, followed by American Airlines with 6,511. In third place, Cape Air will offer 2,453 flights.
Compared to 2019, the Caribbean is still 33% down in the number of flights and 25% in the number of seats. That year, 85 airlines were operating in the region, with JetBlue and American also as the top players.
Currently, several Caribbean governments are shifting their COVID-19 travel restrictions to allow the US vaccinated travelers to leisure there. For instance, Barbados launched new vaccinated protocols on May 9, prioritizing US travel, said Cummings. Also, Virgin Atlantic, Barbados, and IATA are trailing IATA’s Travel Pass on its route from London Heathrow.
May 12, 2021
Gov. Albert Bryan Jr. declared a state of emergency on March 13, 2020, in response to the COVID-19 pandemic. Now, over a year later, the tourism industry has emerged from a total shutdown only to be faced with the challenge of inadequate staffing, Lisa Hamilton, president of the USVI Hotel and Tourism Association, told the Senate Economic Development and Agriculture Committee on Wednesday.
Once the governor lifted the territory’s “Safer at Home” status and airlift capacity to the U.S. Virgin Islands increased exponentially, travelers began flooding the airports. At the start of March 2021, Hamilton said, the islands experienced an extraordinary demand for accommodations, in part because other Caribbean destinations have remained restrictive toward visitors.
“As a result, staffing is a major issue,” Hamilton said. According to her, the staffing problem is attributed in part to employees who do not wish to come off unemployment because they “have no incentive to return to work because their stimulus checks coupled with additional unemployment benefits are satisfying their financial needs.”
Due to the scarcity of employees, Hamilton said some of the association’s members have resorted to hiring outside the territory, but “for Economic Development Commission beneficiaries who have a requirement that 80 percent of their staff be local, this will present a particular problem unless the Economic Development Commission or the Legislature recognizes the issue and provides relief.”
To curb the demand for employment in the tourism sector, the association has partnered with the University of the Virgin Islands to create a culinary certification course, which Hamilton said she hopes will quell some of the staffing shortages businesses are facing.
Staffing was not the only tourism-related concern Hamilton had. She told committee members that decades-old issues still wreak havoc on the sector — like the inability to use a credit card to pay taxis and the “unduly complicated and time-consuming” process individuals must go through to start a business in the territory.
“We recently went before the Legislature not too long ago, because there was a bill that mandated electronic payments [for taxis], and the interesting thing about that is that you had eight different public, private testifiers … all supporting the legislation to allow the electronic payments … and for whatever reason, that legislation never made it out of the committee,” Hamilton said. “Sometimes we are a little bit frustrated in our lack of ability to move some of those things forward.”
Additionally, the pandemic has thwarted new business and caused rising costs for construction materials like lumber, which went up 90 percent in the territory over the last three months, according to Hamilton.
“That is going to be a challenge for those that are jumping back into the market now. To renovate and rebuild is going to be a high cost due to the availability of goods,” Hamilton said.
Even anticipated new businesses like Alpha Submarine Adventures, which would have added submarine experiences in the territory, were impacted heavily by the pandemic and could not finalize their financing, Hamilton said. She added that Little Switzerland and Diamonds International have closed several locations since the COVID-19 onslaught.
“As a leading industry in the USVI, second only to government, the losses caused by COVID-19 are widespread and the effects will be felt for years,” Hamilton said.
Sens. Kenneth Gittens, Alma Francis Heyliger, Dwayne DeGraff, Donna Frett-Gregory, Novelle Francis Jr., Javan James Sr. and Milton Potter were present for the hearing. No vote was taken since the purpose of the hearing was to discuss the impact of COVID-19 on the tourism industry.
Reuters Tom Arnold, Karin Strohecker
May 13, 20217:15 AM AST
Fresh outbreaks of COVID-19 and travel curbs are deterring tourists from flocking back to Thailand's beaches and Turkey's bazaars, stalling a recovery in tourism, a crucial source of foreign currency and a large employer for many emerging markets.
Global tourism suffered its worst year ever in 2020 with the sector shrinking in value by an estimated $4.5 trillion in the pandemic's wake, according to World Travel & Tourism Council (WTTC) figures.
THE SCALE OF RECOVERY IN 2021 STILL HANGS IN THE BALANCE.
But with one in three countries and territories worldwide closed to tourism, key sources of tourists such as Britain barring foreign travel to most countries and fresh virus flare-ups in popular destinations such as Thailand, the prospects appear grim.
Tourism could revive in either July or September, estimates the United Nations World Tourism Organisation (UNWTO), but it warns that, in either scenario, arrivals would still be less than half of 2019 levels.
Emerging economies, generally more reliant on tourism than their developed peers, are most vulnerable to the disruption.
Their lagging vaccination rates compared to developed peers add to pressure.
Tunisia and Egypt have vaccinated less than 5% of their populations, compared to rates of 20-30% across the Mediterranean in Greece, Italy, and Spain.
"It is indeed a hidden risk factor economically, socially and politically for several EMs, since after a difficult 2020 it is tough to lose two seasons in a row," said Sergey Dergachev, fund manager at Union Investment.
Turkey, Egypt, Tunisia, and Sri Lanka are among the most vulnerable, with all four heavily relying on tourism to replenish foreign exchange reserves.
A recovery in Turkey's current account deficit, which widened to $3.3 billion in March, hinges on a rebound in tourism as higher energy prices fan import costs.
Both Britain and Russia have effectively barred citizens from heading to Turkey for now. Even under an optimistic recovery scenario for tourism in the second half of the year, Barclays predicts Ankara might have to dip into precious foreign reserves to finance a chunk of its $21 billion deficit.
Egypt is expected to receive a boost from the resumption of flights from Russia following a five-year hiatus after militants downed a Russian jet in October 2015. Yet hampered by weakness in its two key sources of foreign exchange - tourism and Suez Canal receipts - Egypt's current account receipts will remain below 2019 levels over the next two years, estimates S&P Global.
Similarly to Egypt, tourism accounts for more than a third of hard currency earnings in Tunisia, whose economy is expected to grow just 3.8% in 2021 after a sharp contraction in 2020.
"This (tourism) is a big topic for any country with a current account deficit," said Guillaume Tresca, senior emerging market strategist at Generali Asset Management.
"If you think about tourism in emerging markets, you have to focus on weak countries with weak external balances that rely on tourism – Tunisia, Turkey, Egypt."
Sri Lanka's government, which pinned economic revival hopes in large part on a tourism turnaround, saw April tourism revenues drop nearly 10% month-on-month and new arrivals from India have been barred since earlier this month.
Up to 62 million jobs were lost across all global travel and tourism markets in 2020, estimates the WTTC.
The replacement of many of those jobs, as well as the security of others, in emerging markets depends in large part on how the summer season shapes up.
Most at risk from a slow resumption in tourism are small island nations, such as Antigua and Barbuda, Aruba, and St Lucia, where more than two-thirds of total employment is within the tourism industry.
S&P Global Ratings lowered its sovereign credit rating on Aruba by one notch to 'BBB' from 'BBB+' in March, warning the government would likely rely more heavily on borrowing expenditures, pushing debt levels higher.
With unemployment already in double digits in many countries heading into the pandemic, analysts warn of the risk of fresh social unrest a decade on from protests that blossomed into the Arab Spring.
Bloomberg News April 25, 2021, 5:00 PM AST
Chinese vaccines could make it easier to enter, exit mainland
With the resumption of global travel on the horizon, some people are discovering that their choice of vaccine could determine where they’re allowed to go.
Already, the European Union is planning to allow Americans vaccinated with shots approved by their drug agency to enter over the summer, European Commission president Ursula von der Leyen suggested in a New York Times interview Sunday.
This means that those who have shots by Chinese makers like Sinovac Biotech Ltd. and Sinopharm Group Co. Ltd. are likely to be barred from entry for the foreseeable future, with stark consequences for global business activity and the revival of international tourism.
As inoculation efforts ramp up around the world, a patchwork of approvals across countries and regions is laying the groundwork for a global vaccine bifurcation, where the shot you get could determine which countries you can enter and work in.
For Chinese citizens who venture abroad regularly, and western nationals wanting to pursue business opportunities in the world’s second-largest economy, a dilemma is emerging about which shot to opt for. China so far recognizes only Chinese-made shots, and its vaccines are not approved in the U.S. or Western Europe.
Hong Kong citizen Marie Cheung travels to mainland China regularly for her work with an electric vehicle company, a routine that’s been interrupted by lengthy mandated quarantine stays since the pandemic began.
Of the two vaccine options available in the city -- one from Sinovac and another developed by Pfizer Inc. and BioNTech SE -- Cheung plans to sign up for Sinovac for easier movement in and out of the mainland. Meanwhile, her British husband will go for the Pfizer-BioNTech shot, she says to boost his chances of visiting family in the U.K.
“For people who need to work in or return to mainland, the Chinese vaccine is the only option for them,” Cheung said. “Westerners will only choose the vaccine recognized by their home country.”
For millions of people worldwide who can’t choose which vaccines they get, the risk of more places becoming selective about which shots they recognize, especially given the vaccines’ varying efficacy rates, creates the possibility that even fully inoculated, people’s travel could still be limited -- with consequences for international business activity and the tourism industry.
The EU plans to introduce vaccine passes as of June, which will allow travel for those inoculated or recently recovered from Covid and are thus considered immune. According to the draft of the regulation -- subject to ongoing negotiations between EU governments and the European Parliament -- all vaccines approved by the bloc’s drugs regulator will be acceptable for travel, though EU members are “encouraged” to accept vaccines that have secured World Health Organization approval for emergency use and recognize certificates issued by non-EU nations. The final decision on which vaccines will be accepted rests on individual member states.
“A global division of peoples based around vaccine adoption will only exacerbate and continue the economic and political effects of the pandemic,” said Nicholas Thomas, associate professor in health security at the City University of Hong Kong. “It will risk the world being divided into vaccine silos based on vaccine nationalism rather than medical necessity.”
Many countries have shut their borders amid the pandemic, some allowing entry only to citizens, and even then with weeks-long quarantines after arrival. While vaccines are seen as the way to remove those entry barriers, considerable uncertainty remains over how, or if, nations will differentiate the at least 11 shots available worldwide.
Governments from China to Europe are discussing vaccine passports -- easily accessible and verifiable certifications stating that an individual has been inoculated -- but it’s unclear if countries will pursue universal recognition of all shots, or be selective on which they choose to recognize, particularly with the rise of virus variants and questions over whether the current crop of vaccines are as effective against them.
China eased visa application requirements for foreigners who had been inoculated with Chinese shots in March, including the ability to skip Covid tests or fill out travel declaration forms. The country’s homegrown vaccines are only available in some countries, like Brazil, Pakistan and Serbia. You can’t get Sinovac or the other Chinese shots in the U.S.
But in a sign that Beijing may be cognizant of the economic costs of being selective on vaccines, the Chinese embassy in Washington said this week that travelers who had taken certain western shots could still enter the country if they were departing from Dallas in Texas. State media has indicated that the Pfizer-BioNTech shot is likely to be approved mid-year.
“We do think that it’s important to get a very high percentage of the community vaccinated and the best way to do that is to offer choice,” said Ker Gibbs, president of the American Chamber of Commerce in Shanghai. As a key market and source of business for companies around the world, China’s border restrictions -- among the world’s strictest -- have “had a major impact on our ability to conduct business,” he said.
A Vaccine Passport Is the New Golden Ticket as the World Reopens
“Just speaking with our members, mobility is a high priority for us both in terms of allowing our executives to come in and out of China, but also to have their dependents travel back to China,” Gibbs said. “That’s been a big problem.”
China isn’t the only place that’s restricting access to people with certain vaccinations. Iceland currently omits Chinese and Russian vaccines from the list of those it approves for entry.
The question of vaccine recognition is a key one for tourism-dependent countries, with the $9 trillion global travel industry effectively paralyzed since the pandemic began.
China’s approach to this issue may impact their decision-making, as Chinese tourists have been among the biggest groups of foreign visitors to travel hot spots in Southeast Asia, Australia and New Zealand and capitals as far away as Paris before the pandemic.
There were 155 million outbound tourists in 2019 spending more than $133 billion abroad, according to the China Tourism Academy, a government think tank and subsidiary of the Ministry of Culture and Tourism. While Indonesia, home to Bali, and Thailand have approved and are administering Chinese shots, New Zealand and Australia -- which has seen its relations with China deteriorate the past year over the virus and trade -- do not.
“I don’t know how practical it will be for western countries to recognize Chinese vaccines given the geopolitical environment,” said Ether Yin, a partner at Trivium China, a Beijing-based consultancy. “But there won’t be a true resumption of global travel or economy without the inclusion of China, plus dozens of economies who used Chinese vaccines.”
Katy Niu, a 26-year old Chinese citizen, is a skiing enthusiast and frequent traveler living in Beijing. It’s unclear whether she’ll be returning to international slopes like those in Japan’s Hokkaido anytime soon. Prior to the pandemic, she used to travel internationally at least three times a year, from shopping on Paris’s Champs Elysées to relaxing on a Southeast Asian beach.
Niu hasn’t gotten a vaccine yet, saying she didn’t feel any urgency since she’s not currently able to travel -- and doesn’t see it opening up in the near future.
“If other countries don’t recognize the Chinese vaccine, does that mean vaccination is not going to make a difference?” she said. “We are not offered a western vaccine anyways -- we don’t have a choice.”
Bloomberg April 25th 2021
Ports from Juneau to Grand Cayman are considering parting ways—or saying mostly goodbye—to a sector that keeps their economy going.
On April 12, activists in Juneau, Alaska, filed paperwork to limit cruise traffic to the city’s picturesque port, where more than 1.2 million passengers disembarked in 2019. When cruising returns, it’s expected to host about 620 ships, bringing more than 1.3 million to the last frontier state.
The citizens argue that many passengers coming ashore during the summer season changes the way of life in the city of 32,000. Ideally, they say, they can maintain a quality of life, keep the city as an attractive destination for overnight visitors, and maintain some (but not all) cruise tourism opportunities.
Why now, after so many years of a booming cruise business? Locals say the pandemic shutdown has made them aware of exactly how beholden the city is to cruise lines, which pump about $1.3 billion in direct spending into the Alaska economy—and millions locally. Absence, in this case, has not made hearts grow fonder.
But Juneau isn’t alone. Destinations ranging from Bar Harbor, Maine to the Cayman Islands are using the pandemic to pivot away from mass cruise tourism, which, opponents say, clogs streets, stresses infrastructure, and threatens delicate coral ecosystems that provide natural buffers against hurricanes.
There’s also an economic argument: Overnight visitors spend considerably more than those on quick shore excursions, and reducing cruise crowds may help draw more land-based explorers.
In most places it’s a steep hill to climb. After years of back-and-forth decisions, the Italian government in late March greenlighted a ban on large ships sailing through the Venetian Lagoon. The concern there is over protecting the cultural heritage, given the increased risk of flooding around St. Mark’s Square whenever a cruise ship pulls into the harbor. To solve this problem, big vessels will be indefinitely rerouted to nearby Marghera, an industrial port on the mainland. But that change will take place only when the facility there is ready, leaving Venice preparing for yet another summer of big ships.
A Sector Slashed
Florida Governor Ron DeSantis is suing the U.S. Centers for Disease Control and Prevention over what he says is an unfair shutdown of the cruise industry—a suit that last week was joined by the state of Alaska—but his constituents in Key West are moving in the opposite direction. In November they passed a cruise ship referendum capping the number of daily cruise ship passengers at 1,500 and giving docking priority to ships with the best health and safety records.
The new rules effectively will eliminate visits from major lines such as Carnival Cruise Line, Disney Cruise Line, Norwegian Cruise Line, and Royal Caribbean International, whose ships generally exceed that passenger count. Pre-pandemic, almost a million cruise visitors would arrive at Key West every year, representing about one-third of the city’s tourists. That number is set to shrink dramatically.
One argument from cruise-limiting proponents is that cruise passengers spend an average of $72 per day in port whereas overnight visitors to Key West shell out $620 a day. The cruise industry—via the Cruise Lines International Association—argues that passengers spend more per hour of time they’re on shore.
Another issue is clean water. A Florida International University study of surface water clarity in Key West reported a small improvement while cruise ships have been shut down during the pandemic.
Key West’s cruise business has become a statewide flash point. On April 22, the Florida Senate approved a bill barring the local government from regulating port business. Local environmentalists and fishermen in Key West have asked DeSantis to veto the measure.
Although the outcome remains uncertain, Key West has set a model for other cities to follow. In Juneau, activists are collecting signatures to add cruise-related questions to the ballot for the Oct. 5 municipal election. The three proposed amendments would ban ships with more than 250 passengers daily between 7 p.m. and 7 a.m. and all day on Saturdays, as well as banning ships that weigh more than 100,000 gross registered tons after 2025. As in Key West, this would ban most ships from major lines, while putting more pressure on overnight, land-based tourism to make up the difference in revenue.
The Others Following Suit
A similar story is playing out in sleepy Bar Harbor, Maine’s most popular cruise port. Pre-pandemic, the fishing town of 5,600 was expecting 300,000 passengers a year for the summer and fall season. Late last year, citing downtown congestion and its impact on local culture, the Town Council took steps toward setting limits by making plans to research local sentiment and discuss whether cruise limitations should appear on the June 2021 town meeting warrant.
As part of that work, Bar Harbor residents, property owners, and nonresident business owners are now being asked to complete a 24-question survey by Monday, April 26. Its goal is to assess the perceived impact of cruise ships and land-based tourism.
The Cayman Islands, which has a ban on cruise traffic until at least 2022, is also reconsidering its long-term strategy. In surprise comments in February, amid an election campaign, then-Premier Alden McLaughlin pulled back support for a new $200 million cruise dock in George Town. Instead he discussed limits on cruise ships when they return and suggested that medical tourism might be a way to fill any gap.
As a hub for international banking, the Cayman Islands is not as dependent on cruise tourism as some of its neighbors. Still, it ranks as the Caribbean’s fourth most-visited cruise destination, and before the pandemic it was expecting 1.9 million cruise visitors in 2020. Now that industry’s fate will lie with the newly elected premier, Wayne Panton, the country’s former environment minister.
Two Sides of the Coin
Not all caps are voluntary, though. The tiny gold-rush town of Skagway, Alaska (population: 850), would like to boost cruising—it’s the main income generator for locals—but it doesn't have the infrastructure, or the means to fund such improvements.
Last year no cruise ships visited Skagway. This year a ban on cruises in Canada until February 2022, coupled with U.S. cabotage laws (which deal with trade or transport in coastal waters), appears to have scuttled the season for a second time. In total the city’s businesses lost $160 million in revenue in 2020, says Mayor Andrew Cremata.
“Our waste treatment facility is maxed out, and it can’t handle any more. And the cost to build a new facility is $15 million to $30 million,” he says. “People say they want more cruise passengers, but a daily cap limit is sometimes dictated by things out of our control.”
Even in an ideal world where ships could come more frequently, Cremata isn’t concerned about anti-cruise activism bubbling up in his town.
“We love the cruise industry, and we’re good at it,” Cremata says, adding that his residents don’t mind the noise that comes with swells of visitors. “In winter we enjoy the quiet. In summer we enjoy the chaos.”
By Tom Linder West Hawaii Today firstname.lastname@example.org | Thursday, April 22, 2021, 12:05 a.m.
Help wanted. Now hiring. Job fair.
Job advertisements aren’t hard to find on the Big Island. Tougher to find, as businesses are discovering with the rebound of tourism, are workers to fill the plethora of available positions.
Despite Hawaii’s seasonally adjusted unemployment rate hovering at 9% in March, employers are struggling to bring on new hires.
“It’s a major problem,” said Eric von Platen Luder, owner of multiple restaurants including Huggo’s, Lava Lava Beach Club and Kai, which is set to open next month. “We’re experiencing it with all of our locations… Right now, we’re getting maybe half a dozen applications a week, if we’re lucky. Before, we would put an ad in Facebook and Craigslist, and we would get 10, 15 applicants within a day or two.”
“It’s been unbelievable,” added Poi Dog Deli’s owner Taylor Cline. “I’ve never seen a hiring drought like this before.”
Early on during the pandemic, Gov. David Ige waived the work search requirements to qualify for unemployment benefits. In April 2020, less than 5,000 visitors arrived in the Aloha State and the unemployment rate soared to over 21%. As many as 53,113 initial unemployment claims were made in a single week, and it was under these conditions — when few places remained open and even less were hiring new workers — when waiving that requirement made sense. A year later, business owners are now calling for work search requirements to be reinstated.
“Business is here,” said Patrick Almarza, general manager of Sansei Seafood, Steak & Sushi Bar at Queens’ MarketPlace Waikoloa Beach Resort’s job fair on Wednesday.
Visitor counts, while not at pre-pandemic levels, have still rebounded significantly. According to the state’s Safe Travels statistics, more than 500,000 visitors arrived statewide in March 2021; nearly 85,000 of those visitors landed at Ellison Onizuka Kona International Airport at Keahole.
Almarza was just one of the many employers at Coronation Pavilion in Queens’ MarketPlace including Crocs, Ippy’s Hawaiian BBQ, Island Gourmet Markets, Kuleana Rum Shack, Hilton and more looking for employees; three hours into the job fair, no employer had conducted a single interview. Even if a company secures an interview, employers have reported applicants turning down jobs, claiming they get more money from unemployment.
While the employers in Waikoloa hope applications will pick up at day two of the job fair — going from 9 a.m. to 1 p.m. and 4 p.m. to 7 p.m. at Queens’ MarketPlace — the sentiment was widely shared that the work search requirement needs to return.
As businesses remain short-staffed for longer and longer, employee burnout has become a growing concern. In an effort to avoid overworking staff, Cline has elected to close Poi Dog Deli on Sundays until more workers can be brought on.
“It’s more important to me to preserve my team than it is to be open one more day of the week,” said Cline. “We’re not in danger of going out of business anymore. … We need reinforcements. We need some relief.”
Relief may soon be on the horizon. In an April 16 Spotlight Hawaii interview with the Honolulu Star-Advertiser, Hawaii’s director of the Department of Labor and Industrial Relations (DLIR) Anne Perreira-Eustaquio indicated the work search requirement will be a topic of discussion with Ige.
“It’s something that we’re going to sit down with the governor shortly: discuss what the environment looks like right now, what the workforce looks like, if there are jobs out there to apply for,” said Perreira-Eustaquio.
While the move wouldn’t be a silver-bullet solution — concerns remain about how effective DLIR’s enforcement of the work search requirement could be, and many parents will still have to remain home to care for children not yet returned to school fulltime — the tourism industry on the Orchid Isle has made clear it should be the next step in the return to normalcy.
“The tourists are back,” said Cline. “It’s time for everybody to get back to work.”
IMF Executive Board Concludes 2021 Article IV Consultation Discussions with the Kingdom of the Netherlands—Aruba
April 21, 2021
Washington, DC: On April 16, 2021, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation discussions  with the Kingdom of the Netherlands—Aruba.
COVID-19 has caused unprecedented disruption to economic activity, triggering Aruba’s deepest recession in history, but the policy response was swift. Tourism came to a complete halt during the 2020Q2 causing ripple effects across the economy. Real GDP is estimated to have shrunk by 25.5 percent in 2020, with considerable strain to the labor market and business sector. The Central Bank of Aruba (CBA) eased monetary and macroprudential policies, supporting private credit despite the deep output contraction. The multi-pronged fiscal package has provided essential income and liquidity support to the affected businesses and households and has helped contain bankruptcies and unemployment. However, supportive expenditure policies and large revenue losses turned the fiscal balance from a small surplus in 2019 to a deficit of 17 percent of GDP in 2020. As a result of the large deficit and deep GDP contraction, public debt increased from 72 to 117 percent of GDP.
A moderate recovery is projected for 2021 amid exceptionally high risks. Real GDP growth in 2021 is expected at about 5 percent, supported by Aruba’s favorable testing capacity and vaccination prospects compared to other Caribbean countries. The pandemic is likely to have lasting effects on the economy, which is only expected to reach the pre-COVID level of real GDP in 2025. The fiscal deficit is expected to remain elevated in 2021, reflecting continued expenditure support and persisting weakness in tax revenues. Public debt will peak at about 130 percent of GDP in 2021 and gradually decline thereafter. The fiscal adjustment needed over the medium term to restore debt sustainability is sizable both by historical and international standards. Like other countries, downside risks are predominant and primarily stem from the uncertain evolution of the pandemic. Implementation risks to the needed fiscal adjustment and risks to debt sustainability are also high, but are partly mitigated by the sizable share of obligations to the Dutch government.
Executive Board Assessment 
The authorities’ swift policy response to the COVID-19 pandemic helped contain the human and economic damage. The multi-pronged fiscal package provided temporary income support, wage subsidies, liquidity assistance, and tax deferral measures. In addition, the Central Bank (CBA) eased monetary and macroprudential policies to support private credit and injected liquidity in the banking sector. These measures were instrumental in saving lives and preventing an even sharper downturn.
Policy support remains critical to contain the effect of the pandemic, given the tepid recovery projected in 2021. The decision to extend fiscal support in 2021 is appropriate, in view of continuing economic weakness and elevated risks. Premature retrenchment could hurt the recovery and pose even larger costs on the economy. The authorities are encouraged to prepare a contingency plan if current conditions persist, including the extension of some fiscal support into 2022 if additional financing sources can be identified.
Strict prioritization of spending and revenue mobilization is necessary as the recovery takes hold, in order to contain debt sustainability risks. Expenditure measures should be targeted to households and businesses in immediate need within a generalized effort to improve the efficiency of total spending. Measures to improve tax compliance would broaden the tax base while more fairly distributing the tax burden across the economy. The introduction of a value-added tax (VAT) should be accelerated to offset the revenue shortfall from the recent reduction in direct taxes while protecting the vulnerable, as well as on efficiency grounds.
Over the medium-term, Aruba will need a substantial and sustained fiscal consolidation to restore sustainability and rebuild fiscal buffers. A credible, growth-friendly and inclusive medium-term consolidation plan will be essential to set public debt on a firm downward trajectory. Key elements would include: (i) enhancing the tax system to raise revenues while minimizing distortions and protecting vulnerable groups; (ii) containing the public wage bill; and (iii) reforming the social safety net.
Strengthening the fiscal policy framework will help guide fiscal policy. Adopting a well-designed medium-term budget framework would strengthen fiscal planning and help achieve multi-year fiscal discipline. Enhancing the debt management strategy would guide financing decisions and mitigate refinancing risks arising from the bunching of maturity in 2022/23 when the loans received from the Netherlands come due under current terms.
Monetary and macroprudential polices should remain accommodative to support the recovery. The current level of foreign reserves is adequate, but should be increased over the medium term in view of the high uncertainty regarding the resumption of tourism receipts. The CBA is encouraged to remove the recently imposed capital flow management measure once economic conditions normalize. Premature tightening of macroprudential policies should be avoided to prevent adverse macro-financial feedback effects that might weaken the financial system and reduce welfare. As conditions for approval of the new exchange restrictions are not met, staff does not recommend their approval.
Banks are liquid and well-capitalized, though continued CBA vigilance for emerging financial vulnerabilities would be appropriate. Non-performing loans (NPLs) were contained at 5 percent at end-2020. However, provisions for deteriorating asset quality are affecting profits and NPLs could rise significantly once the fiscal support to households and businesses is lifted. Close monitoring is essential to ensure early intervention and maintain financial stability. Adoption of Basel II would further improve the financial sector's resilience.
Comprehensive structural reforms are key to diversifying the economy and boosting potential growth. COVID-19 brought to the fore the urgency of advancing diversification efforts to help contain tourism-related output volatility and catalyze growth. In the short-term, shifting to lower density tourism models would help reduce permanent scarring while decreasing negative environment externalities. Labor market reforms that foster flexibility would boost potential growth and improve external competitiveness. Strengthening the link between education, training, and skill demand and broadening access to digital infrastructure will reduce the long-term impact of COVID-19, particularly for unskilled, more vulnerable workers, helping alleviate inequalities and spur equitable growth. Policies that tackle inequality and strengthen resilience to climate risks should be continued, along with structural reforms that improve the business environment, including anti-corruption and AML/CFT measures.
Table 1. Aruba: Selected Economic Indicators
 Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
 At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here:
IMF Communications Department
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Recently published visitor arrival figures indicate that Caribbean tourism has started down the long road to recovery. Following a disastrous 2020, during which governments closed borders to try to halt the spread of COVID-19 and months when the sector all but ceased operations, visitor numbers are now slowly increasing.
According to Tourism Analytics, the Aruba-based consultancy that publishes tourism arrivals figures on a rolling basis, stopover visitors to the island Caribbean, excluding Haiti, declined by 66.1 per cent from 23 million in 2019, to 7.8 million last year.
When it comes to this year, however, its website indicates that a gradual turnaround is now under way. When available stopover figures for the first three months of this year are compared to January, February, and March of 2020, the pre-lockdown period when tourism was still booming, its statistics indicate that visitor arrivals are slowly beginning to recover.
What Tourism Analytics figures evidence is that led by the Dominican Republic, the US Virgin Islands, and Puerto Rico, the worst may now be past for some of the independent Caribbean’s largest tourism markets.
Speaking about this recently, Andrés Marranzini, the executive vice-president of the Dominican Republic’s National Hotel & Tourism Association, Asonahores, told local television that he expects this year to see four million visitor arrivals, the same as in 2019. As the proportion of those vaccinated in the country’s main source markets proceeds and vaccine roll-out accelerates locally, he said, the next 18 months “could see one single high season”.
Mr. Marranzini warned, however, that this would require the Canadian, the European Union and British governments to allow a resumption of travel to ‘safe’ destinations.
His optimism coincided with equally positive but more conservative comments by Héctor Valdez, the country’s respected central bank governor. He told an IMF meeting of Western Hemisphere central bankers that the favourable outlook for the country’s economic recovery in agriculture and manufacturing was “supported by the positive signs that are being observed in tourism”.
In his remarks, Governor Valdez observed that the country’s 5.5 per cent to 6.0 per cent forecast growth rate for this year was supported by the bank’s projections that the country would receive 3.5 million visitors and that its recovery would boost construction, manufacturing, and commerce.
In a similar vein, Jamaica’s Minister of Tourism, Edmund Bartlett, said last month that Jamaica is projecting long-stay and cruise-visitor arrivals this year at 1.6 million and related earnings at US$1.8 billion. Although the figure, which is predicated on a recovery in the United States market, is well short of the 4.3 million visitors and US$3.64 billion the country received in 2019, it would represent a significant turnaround.
The view that better times are ahead for tourism are shared by Adam Stewart, the Chairman and CEO of Sandals Resorts International, who says the company is already expecting a 65 per cent to 80 per cent occupancy rate in the coming months in its hotels across the region.
Mr Stewart said at a Mayberry Investors Forum this month: “I think for sure, the worst is behind us. Once the first vaccination was approved, we’re seeing a huge correlation between people being vaccinated and consumer confidence.” He suggested that from May onwards, aggressive vaccination programmes being undertaken in key markets such as the United States and United Kingdom and high levels of pent-up demand would drive tourists to the region.
Encouragingly, the Caribbean Tourism Organization (CTO) is forecasting a 20 per cent increase in arrivals this year over 2020, and a similar uplift in visitor expenditure, which it estimates to have fallen between 60 to 80 per cent in its member countries last year.
CTO cautions, however, that Caribbean performance in 2021 will depend largely on the success of the authorities in the region’s key markets and the Caribbean in controlling the virus. It believes that international travel confidence may not begin to pick up until this summer and may be modified by citizens in key markets being required to vaccinate before travelling abroad.
In contrast, the outlook remains bleak for the return at scale of cruise tourism, which remains subject to a ‘no sail’ order by the US Centers for Disease Control and Prevention.
Speaking recently, Cuba’s Prime Minister, Manuel Marrero, said about tourism’s return that “people want to travel the same or more than before, but things will never be as they were. Now, the most successful destinations will be those that have known how to take advantage of this time of paralysis to innovate, to do things differently”.
Mr Marrero, a former minister of tourism, told the country’s tourism executives that future success will depend on their understanding that the sector is a locomotive for the economy and that they must significantly redesign tourism. This would involve, he said, ensuring COVID-safe conditions, offering service and cuisine of quality, providing universal internet connectivity, adapting marketing to be social-media oriented, and further diversifying the country’s tourism offering away from the beach.
“We are seen as a sun and beach destination, but the strength of our culture makes us different” as does the “varied nature” of the Cuban tourism product. We have to guarantee the highest quality in all tourism products that we offer in the country, both to the international and domestic markets,” he said.
What 2020 confirmed is that tourism, if well integrated economically and sustainably, is central to regional prosperity and growth. The first three months of this year have additionally begun to demonstrate how, if treated thoughtfully, land-based tourism has a greater capacity than any other economic sector in the region to support post pandemic recovery because it is able to deliver rapidly an externally led financial stimulus to the economy as a whole.
Measures that ensure the safe recovery of Caribbean tourism this year are therefore vital. However, just as important will be governments and the industry giving greater consideration to measures that will make the Caribbean product sustainable, diverse, more socially relevant, and globally competitive far beyond the sector’s predicted full return by the end of 2022.
David Jessop is a consultant to the Caribbean Council.
To access previous columns, visit: www.caribbean-council.org/research-analysis
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.