Inter-American Development Bank
facebook
twitter
youtube
linkedin
instagram
Abierto al públicoBeyond BordersCaribbean Development TrendsCiudades SosteniblesEnergía para el FuturoEnfoque EducaciónFactor TrabajoGente SaludableGestión fiscalGobernarteIdeas MatterIdeas que CuentanIdeaçãoImpactoIndustrias CreativasLa Maleta AbiertaMoviliblogMás Allá de las FronterasNegocios SosteniblesPrimeros PasosPuntos sobre la iSeguridad CiudadanaSostenibilidadVolvamos a la fuente¿Y si hablamos de igualdad?Home
Citizen Security and Justice Creative Industries Development Effectiveness Early Childhood Development Education Energy Envirnment. Climate Change and Safeguards Fiscal policy and management Gender and Diversity Health Labor and pensions Open Knowledge Public management Science, Technology and Innovation  Trade and Regional Integration Urban Development and Housing Water and Sanitation
  • Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Caribbean Development Trends

  • HOME
  • CATEGORIES
    • Agribusiness
    • Antigua and Barbuda
    • Barbados
    • BehaviorChange
    • Belize
    • Bermuda
    • biodiversity
    • Blockchain
    • Caribbean
    • Caribbean Culture and Media
    • Climate Change
    • Creative Economy
    • Crime Prevention and Citizen Security
    • Data and Knowledge
    • De-risking
    • Dominica
    • Dutch
    • Early Childhood Development
    • Economic Growth
    • Education Policy
    • energy
    • entrepreneurship
    • Environmental and Climate Change
    • Events
    • Extractives
    • Finance
    • Fiscal Rules
    • gender
    • Governance and Regulatory Policy Reforms
    • Grenada
    • Guyana
    • Haiti
    • Health
    • Health Policy
    • Hurricane
    • Hurricane Irma
    • infrastructure
    • Innovation and change
    • Intellectual Property
    • IWD
    • Jamaica
    • JumpCaribbean
    • Labor
    • Labour Markets
    • MOOC
    • Music
    • Natural Disasters
    • Nurturing Institutions
    • OECS
    • Podcast
    • Poverty
    • Private Sector and Entrepreneurship
    • Saint Kitts and Nevis
    • Saint Lucia
    • Saint Vincent and Grenadines
    • skills
    • Sports for Development
    • Suriname
    • Technology
    • The Bahamas
    • The Blue Economy
    • Transportation
    • Tourism
    • Trinidad and Tobago
    • Uncategorized
    • VAWG
    • Webinar
    • women
    • Women for Change
    • youth
  • Country Offices
    • Bahamas
    • Barbados
    • Guyana
    • Jamaica
    • Trinidad and Tobago
    • Suriname
  • Press Releases
    • Bahamas
    • Barbados
    • Guyana
    • Jamaica
    • Trinidad and Tobago
    • Suriname
  • Authors

Imagining a Post-COVID Tourism Recovery

May 25, 2021 by Olga Gomez Garcia - Henry Mooney - David Rosenblatt - María Alejandra Zegarra Leave a Comment


Countries around the world have endured over a year of extreme uncertainty in the context of the COVID-19 crisis, and economies in the Caribbean have suffered more than most. But with the increasing availability of vaccines and prospects for a resumption of international travel, light is emerging at the end of the Pandemic tunnel. With this in mind, The Inter-American Development Bank Caribbean Department’s most recent Quarterly Bulletin reviews the latest available information regarding the crisis’ impacts on citizens, their economies, and key factors that will determine the speed and depth of recovery. As also discussed in previous editions, prospects for tourism-dependent economies will depend heavily on vaccine penetration and border normalization in source countries—particularly the United States and the United Kingdom—, while commodity-intensive economies could benefit from upward revisions to global demand growth estimates. All countries in the region can do much to support a rapid recovery through forward-looking policies aimed at ensuring they are well positioned to take advantage of post-Pandemic preferences with respect to travel and tourism, services trade, and investment. Our latest report considers these issues, what may lie ahead, and how countries can best position themselves for a recovery in 2021 and beyond.

DOWNLOAD

Caribbean economies are the world’s most dependent on tourism…

A year ago, as the novel coronavirus spread, borders closed, and social distancing measures were implemented, our Caribbean economics team began trying to understand the potential economic and social implications for the region. Commodity-oriented economies began to suffer from the decline in prices, particularly oil and gas. But the most worrisome sector was tourism, and so the focus was on trying to understand how tourism-based economies would fare. Our early simulations of potential output losses seemed hard to fathom at the time, as they implied historic declines in GDP for many of our member countries. Unfortunately, as many of our worst fears materialized, we developed a new understanding of just how important the sector really is for Caribbean economies—see our updated Tourism Dependency Index, that ranks over 160 countries globally in terms of economic reliance on tourism for GDP, employment, and exports (Figure 1).

A year like no other…

The COVID-19 pandemic represents a new kind of economic shock for countries in the region. The human toll of the pandemic has been tragically high, and this has been its most significant implication. But the crisis has also affected key sectors of the region’s economies with a speed and persistence that few could have imagined only a year ago. One reflection of this has been the shock to real GDP growth in 2020, which represented the largest decline in most of our countries since 1975 (Figure 2).

Based on data assembled from various national sources, a breakdown is also now available for tourism arrivals to our three most tourism-dependent economies—The Bahamas, Barbados, and Jamaica (Figure 3). In this context, the first quarter of 2020 saw air and cruise ship arrivals at between 77 and 85 percent of their 2019 levels, followed by a precipitous contraction to near zero arrivals in the second quarter. By the third quarter, arrivals had improved to between 2 and 14 percent of their 2019 same-quarter levels, depending on the country. Overall, 2020 represented a contraction of international visitor arrivals of 76 percent for The Bahamas, 67 percent for Barbados and 69 percent for Jamaica (Figure 3).

Prospects for the future…

As we turn our attention from a devastating 2020, to increasingly bright prospects for the future, determining how quickly demand and conditions for travel will normalize will be crucially important. In this context, our research points to five key considerations that will drive the speed of individual countries’ recoveries:

  • The evolution of the pandemic and the vaccine rollout. Clearly this is a key factor affecting people’s willingness to travel.
  • Domestic tourism in key source markets. Domestic tourism lurks as a possible substitute for international travel.
  • The economic environment in source markets. Here, economic stimulus, particularly in the United States, might help to support the recovery.
  • Business tourism versus leisure tourism. In the past, business tourism recovered more gradually from shocks. The nature of the pandemic and boom in remote work might imply a longer lasting impact on this segment.
  • Who are your source markets? Demand patterns are poised to change—perhaps dramatically—in the wake of the crisis, but much remains to be determined. These, and other hard-to-anticipate factors underscore the need for improved tourism intelligence systems, that can help governments and industry operators anticipate and adapt quickly to new preferences and behaviors, and to help guide policy design and investment allocation.

Along these lines, the latest available information regarding expectations for a return of international tourism to pre-pandemic levels suggests that it could still be years before we see a full rebound. On balance, only 15% of experts surveyed by the United Nations World Tourism Organization in late 2020 expected a full restoration of activity globally by end-2022, while a roughly equal proportion of pundits (about 40%) predict that a full normalization of the sector will only materialize by either end-2023 or end-2024 (Figure 4). As highlighted in our publication, the speed of this normalization in key Caribbean countries will depend on source countries and their progress with vaccine distribution, as well as the nature of the tourism product offering in each country, and how both disposable incomes and preferences of consumers in related segments evolve.

Countries can accelerate recovery by taking actions in key areas…

Our report considers factors that will drive economic recovery across the region, some of which are out of the control of Caribbean governments and businesses. Still, countries can do much to support a recovery through policies, investments, and other measures of their own. These include efforts to reinforce tourism intelligence, and to adapt their tourism product offerings to suit a post-pandemic world. Such efforts must also consider changing travel preferences of both traditional and new consumer segments. Within that context, our report details some specific priority areas:

  • Safety strategies, with bio-protocols and reopening and closing plans, need to be closely monitored and adjusted to changing circumstances. Communication is key, and cross-country coordination can ensure a common approach and establish a common brand for safe Caribbean destinations.
  • Strong market intelligence systems will be more important than ever. These systems should rely not only on traditional statistics, but also on real-time actual travel bookings and tourism expenditure data. Frequent consumer sentiment surveys can also be a useful guide.
  • Innovation with respect to demand analysis, safety and security strategies, product distribution, carrying capacity, supply chain efficiencies, and destination management will be key. Innovation and adoption of communication and information technologies at all levels is no longer optional, and cannot be postponed. Adjusting the tourism product to new preferences may be necessary for Caribbean destinations to fully participate in a global recovery of the sector. Analysis of these and related issues will be the subject of future IDB research.
  • Preserving and improving access to destinations (particularly via air connectivity) and strategically increasing access to accommodate potential demand growth are going to be very relevant going forward. Analyzing the main market segments of each destination and focusing on prioritizing accessibility for the destination’s main target markets, based on thorough market intelligence analyses, could make all the difference in terms of recovery.

Country Specific Chapters

The report also includes country-specific sections focused on the implications of the crisis for economic performance, as well as policy measures that have been announced and undertaken by governments in The Bahamas, Barbados, Guyana, Jamaica, Suriname, Trinidad and Tobago, as well as the six sovereign member states of the OECS. In the report, our country economists review recent economic performance, policies, and risks to economies in the region.

Podcast

Listen to our podcast on this Quarterly Bulletin below.


Filed Under: Caribbean Conversations, Economy & Investment, Tourism Tagged With: Quarterly Bulletin

Olga Gomez Garcia

Olga Gomez Garcia is a development economist specialized in the travel and tourism sector. Currently she works as an Operations Lead Specialist in the Environment, Rural Development, and Disaster Risk Management Division of the Inter-American Development Bank. Olga is the tourism focal point for several Central American and Caribbean countries. She coordinates the tourism sector policy dialogue and leads the sustainable tourism development policy, investment, and research projects for the countries assigned. Olga has a Master in Business Administration specialized in the tourism sector from Cornell University (Ithaca, USA) and ESSEC Business School (Paris, France) and a Bachelor Degree in Business Administration and Management from Carlos III University (Madrid, Spain). Olga has been working at the IDB since 2008. Previously, she worked several years as an economic and tourism sector advisor for the Spanish Parliament and for the United Nations World Tourism Organization (UNWTO) as technical director in various tourism development projects. Olga has worked as well for several private sector companies, such as Mazars Tourism, Procter and Gamble, Groupe Le Duff, Pizza Hut, Olara Música, and Ferrovial. Olga taught Tourism Economics, Business Management, Corporate Strategy & Strategic Marketing at Universidad Antonio de Nebrija (Madrid, Spain) at their Master and undergraduate tourism programs for several years and Tourism Governance and Destination Management at the Spanish National Public Administration Institute.

Henry Mooney

Henry Mooney serves as Economics Advisor with The Inter-American Development Bank (IDB). He previously worked with investment bank Morgan Stanley in London, The International Monetary Fund (IMF), The World Bank, and The Government of Canada, including on dozens of advanced and emerging market economies in Africa, Asia, Europe, Central Asia, Latin America and the Caribbean. Henry's responsibilities have included leading regional economic research and publications, serving as mission chief/team leader or team member for technical assistance focused on sovereign debt issuance, debt restructuring, market development, and public financial management, as well as producing forecasts in the context of adjustment programs and surveillance. He has also worked extensively on issues related to monetary policy, financial stability, regulation and supervision, financial access and inclusion, and his research has been published in a number of books, journals and appeared in the media (e.g., The Economist, The New York Times, Reuters, The Wall Street Journal, and many others). Henry currently serves as a member of The Atlantic Council's Financial Inclusion Task Force, Jamaica's Economic Policy Committee, as well as The IDB's Diversity and Inclusion Advisory Group and the Board of The IDB’s Afro-Descendant Alliance. He is a dual Brazilian and Canadian citizen, who completed his studies in economics and finance at Concordia University (BA), The London School of Economics (MSc), The University of London (PhD), and Harvard University (MPA).

David Rosenblatt

David Rosenblatt is the Regional Economic Adviser for the Caribbean Country Department at the Inter-American Development Bank (IDB). Prior to this position, David worked for 27 years at the World Bank, where he divided his career between assignments in the Latin America and Caribbean region and the World Bank Chief Economist’s office. David holds a Ph.D. in Economics from the University of California, Berkeley.

María Alejandra Zegarra

Maria Alejandra holds a master’s in Economics from Brown University and is a former Fulbright Scholar. She earned her bachelor’s degree in Economics at Universidad del Pacífico in Lima. She co-authored "El porvenir de la vejez: demografía, empleo y ahorro" (The future of aging: impacts of demography, employment and savings on the retirement system) in Peru, and has worked on the effects of mining, economic activity and the long-term consequences of inequality, also in Peru. Maria Alejandra was part of the Caribbean Economics Team (CET), providing support in the creation of research products and coordinating some CET activities from the IDB’s head office.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Follow Us

Subscribe

Search

Caribbean Dev Trends

We provide unique and timely insights on the Caribbean and its political, social, and economic development. At the IDB, we strive to improve lives in the Caribbean by creating vibrant and resilient economies where people are safe, productive and happy.

Similar posts

  • COVID-19: Tourism-Based Shock Scenarios for Caribbean Countries
  • Brexit Effects after All? : The Case of Jamaica
  • Caribbean Economies in the Time of Coronavirus
  • Stories from the Field: Reopening and repositioning Caribbean tourism
  • Extreme Outlier: The Pandemic’s Unprecedented Shock to Tourism in Latin America and the Caribbean

Footer

Banco Interamericano de Desarrollo
facebook
twitter
youtube
youtube
youtube

Blog posts written by Bank employees:

Copyright © Inter-American Development Bank ("IDB"). This work is licensed under a Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives. (CC-IGO 3.0 BY-NC-ND) license and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC- IGO license. Note that link provided above includes additional terms and conditions of the license.


For blogs written by external parties:

For questions concerning copyright for authors that are not IADB employees please complete the contact form for this blog.

The opinions expressed in this blog are those of the authors and do not necessarily reflect the views of the IDB, its Board of Directors, or the countries they represent.

Attribution: in addition to giving attribution to the respective author and copyright owner, as appropriate, we would appreciate if you could include a link that remits back the IDB Blogs website.



Privacy Policy

Copyright © 2023 · Magazine Pro on Genesis Framework · WordPress · Log in

Banco Interamericano de Desarrollo

Aviso Legal

Las opiniones expresadas en estos blogs son las de los autores y no necesariamente reflejan las opiniones del Banco Interamericano de Desarrollo, sus directivas, la Asamblea de Gobernadores o sus países miembros.

facebook
twitter
youtube
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Non-necessary

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.

SAVE & ACCEPT