The Slippery Slope of Economic Recovery for Tourism-Dependent Hotspots
With travel restrictions and COVID-19 cases rising every day, it comes as no surprise that the countries that have been economically hit the hardest all rely on tourism. Many of these places, being in tropical areas, are no stranger to the menacing threat of natural disasters, but now they find themselves dealing with the threat of economic collapse. Naturally, they are doing everything they can to recover. Many countries like Mexico and Italy are giving free vouchers and travel incentives. Barbados, for example, is offering a 12-month visa to any American interested in moving a work-from-home office to the island. For some, these tactics have been working. For most, however, opening up has backfired and cases have soared. So, what exactly is the right way to reopen these fragile economies? First, let’s take a look at the wrong way to do it.
Around June, the Bahamas opened up its borders and quickly learned a hard lesson. It had been opened for a mere 3 weeks before having to close the border to American citizens. Tourists from places like Canada and the UK were still welcome but considering that U.S. tourists make up more than half of the tourists in the Bahamas, the ban proved devastating. Thus, the restrictions were quickly lifted. Today, the Bahamas is grappling with over 1,424 active COVID cases. On other islands, similar instances appeared. The Maldives opened up its borders on July 15 and COVID cases quickly surged as almost 3,000 visitors poured in. The first confirmed COVID case on the island was in March, but as of right now, almost 6,000 cases are active.
These instances serve as an example of what happens when reopening occurs too quickly. Mark Brantley, the Premier of Nevis and the Minister of Foreign Affairs for St Kitts and Nevis, believes that the way to reopen is that jurisdictions are going to have to “pivot to more tourism pitched at the luxury market, with smaller numbers of people and arguably a better yield.” The fact is, no matter what strategy is implemented in these countries, like the rest of the world, these countries will unfortunately amass a substantial economic loss due to COVID. Now, it’s just a matter of the extent of losses. Sure, letting in thousands of tourists on a small island to spend money sounds like a dream, but the prospect of having a spread of COVID-19 hugely outweighs any benefit. Not only will future travelers stay away from an island with a surge of COVID cases, but the cases will also ultimately affect the local people the most, many of whom live in poverty, and many lack access to healthcare. So, while reopening is needed, it is wise to be very careful about guest behavior.
Pictures across the Internet have emerged of tourists blindly disregarding safety protocols. Mask wearing and social distancing have to be enforced. Though it might not please the guest, one angry guest is better than an infected island. Perhaps have guests sign a contract letting them know that safety guidelines have to be followed during their stay. Resorts should also adapt their events to become more COVID friendly. And, of course, it is extremely important that governments and local authorities are honest and transparent about COVID.
What’s next for these countries post-COVID? The problem of heavy reliance on tourism has been acknowledged for decades; however, few changes have been made. With COVID, this may be signaling a new turning point for these countries. Sure, they’ll always have a large tourism sector, but by diversifying their markets, they are ultimately going to strengthen their economies. One way to do this is by increasing domestic consumption. Oftentimes, tourist-dependent areas import massive quantities of food despite having a rich food export market. This not only hurts the local economy but also causes a decline in the agriculture sector. Take the Caribbean for example. Most hotels and resorts choose to source their food from abroad rather than locally. If hotels and companies could spend at least a small fraction to buy locally, the situation in the Caribbean and elsewhere could become more sustainable.
In fact, this practice is looking to be implemented in Thailand. Thailand, with its economy shrunk by 12% in the second quarter, seems to be taking an initiative against its tourism dependency. Just this week, the Thai House of Representatives called for a raise in taxes for Thai firms, an expansion of the tax base, and a plan to move the economy to become more dependent on domestic consumption. In addition, Thailand is planning to employ over 90,000 new jobs to promote their new economic goal. If Thailand manages to steer its economy to become more self-dependent, it will open up a new door for other countries. COVID has exposed a lot of ugly truths around the world. Whether countries pay heed to these truths and instill change or wait around until the next pandemic is up to them.