Much has been said regarding a possible June 15, 2020, reopening of Jamaica's tourism industry. Hoteliers advocating for an urgent jumpstart are banking on tourism’s known resilience. Anxieties must however be tempered by equal dosages of realism. Any premature reopening could have unanticipated long-term consequences for the island’s overall economic recovery.
Thus, even with the horrors of over 350,000 tourism workers being laid off, strategies aimed at restoring these jobs must delicately balance lives and livelihoods. Every effort must be made to ensure the adequacy of measures to protect workers, visitors, and the destination’s reputation.
From Lockdowns to Lock-ins
On the plus side, given our proximity to our main source markets, the Caribbean can be guaranteed a faster recovery than most other destination regions. If Jamaica continues to manage the virus as well as we have so far, the island should see a slow return of visitors from the USA and Canada. There can be no illusion however that the level of visitor inflows during the next couple of years will be anything close to what we have grown accustomed to over the past few decades.
The pandemic has all but totally obliterated consumer confidence. Fear and trust are highly likely to play a significant role in determining travel choices. COVID-19 exposed the world as being far more xenophobic than perhaps previously realized. In many destination regions, visitors were treated suspiciously as carriers of the virus. In more exotic locations, tourists were challenged by language and cultural barriers.
The Caribbean should benefit from this unfortunate status quo in the short term, as more tourists seek out physical and cultural proximity. However, many Americans may opt for domestic destinations such as Florida, Vegas, and California; while limiting international travel to Hawaii and Puerto Rico. We should therefore be reworking our marketing strategies as we prepare for fierce competition from US destinations also struggling to recover from the pandemic. Now is an excellent time for us to focus product improvements on satisfying the needs of a huge diaspora market desperate for the ‘wellness’ of home.
Indeed, the lack of a universal vaccination may give rise to phenom of ‘corona-cation’. Constraints placed on mobility may remain in place for the foreseeable future. As the closure of international borders is extended, residents are being encouraged to vacation interstate. Australia, Canada and New Zealand have already launched campaigns to encourage domestic areas most badly affected. Jamaica and the rest of the Caribbean must start figuring out how to raise interest in staycations while promoting regional tourism.
Hedging Jamaica’s recovery against a depressed US economy
Even more significant to the discussion is the fact that the recovery of Jamaica’s tourism industry is entirely predicated on the resuscitation of the economies of our main generating countries. The US economy is practically decimated. Job losses are now inching towards 33 million and unemployment racing pass the 14.7% suffered during the Great Depression of the 1930s.
Consumer confidence in Europe has not been spared either. The bloc is experiencing its worst recession since its formation. Economic contraction is rushing towards 8% by the end of the year. Mounting job losses continue to dampen consumer confidence and fear has all but shattered the purchasing power of potential visitors.
People with protracted money worries are unlikely to travel regardless of how desperate they are for an escape. The pace of our tourism recovery will therefore be heavily dependent on the return to some degree of normalcy for the US, British and European economies. Thus, even as we plot a path to recovery, we must be realistic in our expectations. The number of tourists likely to return to our shores in the immediate will not allow for occupancy levels anywhere near what they were at the beginning of the year.
Fight for Flights!
Just as important to the recovery plans, will be the restoration of visitor confidence, certainly enough for the airlines to profitably return to our skies. Even with an uptick in tourists’ interest, our optimism must be balance with the real that as an island destination we are wholly dependent on the return of passenger traffic from the major air and cruise lines. Most fleets are currently grounded with reports of some airlines indicating that they are not likely to recovery from the hit of COVID-19.
Increasing evidence also suggest that as airlines plan for protracted decline in demand, many carriers have begun downsizing their fleet. The severity of the impact was most underscored by reports of Warren Buffet/ Berkshire Hathaway’s decision to dump stocks held in four of the major carriers upon whom Jamaica’s successfully recover depends. Undoubtedly, Delta, American Airlines, United Airways and South West will have a hard task returning to their busy pre-COVID flight schedules.
The verdict is still out regarding the probable impact on fares as airlines and airports manage the escalating cost of COVID-19 containment strategies. Concerns are rife that the burden of physical distancing will require at least one-third less passengers per flight. Airlines are purportedly either leaving the middle seats empty or retrofitting to ensure greater probability of physical distancing. As stricter sanitation measures, temperature scans, baggage checks, check-in and departure protocols take deep root in the sector, some estimates are already projecting increases of between 50 to 100% in airfares by the start of 2021.
As supply outstrip demand, reliance on yield management strategies may offer passengers some initial respite. Nonetheless, these very tactics are likely to see even more airlines folding under the burden of cheaper tickets and increasing operational cost. A few are already taking a pathway to recovery based on ‘route bubbles’ such as the “Trans-Tasman bubble” between New Zealand and Australia. This allows airlines to operate lower-risk air corridors. The immediate impact is a likely further decline in the high-volume air traffic that was partially responsible for the increased level of stopover visitor arrivals to the island in recent years.
Overhaul of Airport Operational Processes
Aspirational plans to reopen requires a crucial assessment of the readiness of all ports. Integral to the process is an examination of the current status of collaborative effort among the Ministries of Tourism, Health, Foreign Affairs and Transportation. Priority also need to be given to the status of bilateral agreements with our source markets. Guarantees must be in place to ensure that all arriving passengers are COVID-19 free.
An assessment of the island’s two international airports should determine the state of readiness in terms of the availability of functioning temperature scans, sanitization stations, increased electronic processing, and revisions to the layout in order to significantly reduce passenger to passenger engagement. Clearly there will also be a need to retrofit the workstations for customs and immigration officers. In fact, revised protocols and work process flows must be established to enhance the safety of all other personnel employed at not only at the ports but in all other forms of domestic ground transport.
Increasing evidence also suggests that as airlines plan for protracted decline in demand, many carriers have begun downsizing their fleet. the matter of allowEven with an uptick in tourists’ interest, our optimism must be balanced with the reality that as an island destination we are wholly dependent on the return of passenger traffic from the major air and cruise lineMost fleets are currently grounded with reports of some airlines indicating that they are not likely to recover from the hit of COVID-19.
The challenges for the hotel sector in getting ready
A hastened reopening of hotels is also likely to create some unique challenges. By now its commonly accepted that the countries experiencing the highest levels of fatalities from this pandemic are the very source markets upon which we are dependent for more than 85% of our arrivals. Missing from the analysis, however, is the open secret that the island remains paradise for a more mature travel segment.
Indeed, plans to reopen must give due consideration to the fact that 66% of the demographic segment most attracted to the island’s all-inclusive product are above 35 years old. This is important for hotels to appreciate, as the visitors most likely to return in the first phase of the re-opening are going to be younger people less fearful of contracting the COVID-19 virus and perhaps less interested in the traditional hotel product.
Should the hotels therefore be taking this time to reassess their product offerings with the aim of generating a stronger appeal among more youthful travel segments? Already we know that without effort, several Airbnb facilities have bookings for as early as June 1. Should the next few months be used to refashion and indeed re-scale some of our hotel products as we prioritize operational models that will sufficiently safeguard future guests and employees against contracting the virus during work and play?
All is not lost! We can restructure the industry while protecting the strength of Brand Jamaica. Dire as the fallout has been, the pandemic might have offered Jamaica a lifeline. This point may never be understood by many. However, a crucial fact is that we do have a very tourism-centric economy. There is no other export sector with the potential to earn as much in foreign exchange, contribute as much to GDP, employ as many, or allow for the level of economic linkages that tourism stimulates.
We must therefore handle this delicate balancing act of re-opening with phenomenal caution, understanding that lives and livelihoods are at stake. In a follow-up article, we can explore some basic steps to be undertaken in order to ensure a rebirth of a tourism industry, much more resilient and far more inclusive than before.