Tourism industry in free fall as virus paralyses travel

Empty deckchairs outside the Westin Hotel, Sunday. The tourism industry is facing massive cancellations.
Empty deckchairs outside the Westin Hotel, in March 2020. The tourism industry is facing massive cancellations. - Photo: Taneos Ramsay.

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The Cayman Islands’ tourism industry is facing a virtual shutdown as global travel grinds to a halt amid concerns over the spread of the coronavirus.

With cruise ships banned from the islands for two months and travel to Cayman from multiple countries outlawed, the industry is facing an unprecedented crisis. Some business owners told the Cayman Compass they believe a government bailout may be necessary to keep businesses afloat and help workers survive.

Amid new restrictions limiting public gatherings to 50 people or fewer, some restaurants are already shutting their doors.

Hoteliers across the island are seeing massive cancellations and the prospect of job losses and further temporary business closures is looming.

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Massive cancellations

Woody Foster, president of the Cayman Islands Chamber of Commerce, said the business sector was grappling with an issue it had never seen before.

“We have a really big problem,” he said. “Hotels and restaurants can’t pay salaries if they have no customers. How are these people going to eat?

“There are massive cancellations across the industry. All these servers, dishwashers, room cleaners – they don’t have any work.

“It is a massive problem and I don’t think any of us have all of the answers at this point.”

The Chamber supports measures to contain the spread of the virus, but Foster said discussions were now taking place on how to keep the economy stable and keep people’s mortgages paid and lights on.

He said, “We need to keep this country safe and keep this country functional so people can continue to pay their expenses.

“We have got to take care of people’s health, but we need to figure out how we are going to pay for it and pay for the consequences,” he said.

“We can’t expect government to cover the national payroll.”

Government in talks with banks

Tourism Minister Moses Kirkconnell said government was in daily discussions with the banks and the business sector in an effort to find solutions.

He said Cabinet had followed what has become best-practice procedures for containing the outbreak by closing schools, curtailing travel and tourism, and restricting public gatherings.

“This is short-term pain for long-term gain,” he said. “We have to stop the ability for the virus to spread.”

Kirkconnell acknowledged that many would face hard economic times ahead as a result of the restrictions and the general global drop in travel.

“We know airline load factors are down, people have cancelled vacations, all these things,” he said.

“We know that when we don’t have cruise ships come, there is going to be very little work for the taxis. They are going to be down 60-70%, same thing with the tour operators, same thing with attractions. This goes completely across the board.”

He said government was investigating ways to help those that would be impacted by the downturn.

Health comes first

The Cayman Islands Tourism Association has backed government’s decisions despite the implications for the industry.

CITA president Theresa Leacock-Broderick said the responsibility to prevent the spread of COVID-19 and protect the health of the community had to come above economic concerns.

But she warned that tourism and hospitality businesses and staff would face the worst impacts.

“Tourism leaders are working together and in dialogue with government to manage the situation and be as proactive as possible to protect our industry and support our personnel,” she said.

“While the full impact and duration of the COVID-19 pandemic is unknown at this time, we have to weather this storm and know that what we do and how we respond to these challenges will ultimately impact the recovery.”

Small businesses need support

Smaller operators expect to be hit hard.

Shaun Ebanks, a former head of the Land and Sea Co-Op and the owner of K-Man Sun Splash Watersports, said he was preparing for the worst.

He said he understood the reasons for government’s restrictions and suggested tourism would have largely stopped anyway.

“No-one is going to be coming in. If we didn’t shut it down, it would have shut down itself,” he said. “My concern is how long this goes on. It is a serious, serious situation we are in.”

He said he hoped government and the banks would bring in some relief for those impacted, either by suspending mortgages or offering financial support.

“I understand it has to be done,” he said of the 60-day cruise ship ban.

“But government will have to bring some sort of bailout. All of us are going to be affected. I don’t know one operator that doesn’t have a mortgage to pay.”

Hotels already impacted

Larger hotels and businesses are also facing tough decisions as business evaporates in the middle of high season. Seasonal workers could face lay-offs or temporary redundancies with rooms expected to be empty for months as visitors cancel trips.

At The Ritz-Carlton, Grand Cayman resort, general manager Marc Langevin said the situation had developed at an “exponential rate” since the US State Department’s advisory against travelling overseas last week.

He said it was premature to quantify the likely impacts for the resort and the industry with the situation changing constantly.

Langevin said the safety of staff and guests was the number one priority in the midst of the crisis.

“While dealing with the present situation, we also have to ensure we prepare ourselves actively for the recovery period to get back on our feet.”

Jim Mauer, managing director at the Westin Grand Cayman resort, said the State Department’s announcement early last week had sparked a slew of cancellations.

He said the hotel had seen “substantial cancellations through Easter” and may have to “slim down” its operations. He said discussions were ongoing over how to manage that and support staff through what is expected to be a lean time for the industry.

“It is not a Cayman problem; it is a global problem. People feel home is safe and when that happens, travel is hit first and hit hardest,” he added,

Dart expects impacts

Dart Enterprises, one of Cayman’s biggest employers and owner of multiple hotel properties, is bracing for impact.

Mark VanDevelde, CEO, Dart Enterprises, said, “COVID-19 is an unprecedented pandemic.

Our collective priority must be the health of our community and slowing down the spread of the virus; in parallel Dart is working with government, our tenants, staff and other private sector partners to evaluate options and where possible, coordinate efforts to minimize the inevitable negative impacts in the weeks and months ahead.”

The new normal

Chris Kirkconnell, of Kirk Freeport and the past president of the Chamber, said he believed some form of government support would be needed – especially for smaller businesses who depend on cruise tourism.

“They are not going to have much choice,” he said.

“Certain businesses are obviously a lot more dependent on cruise and on tourism in general. Those are going to be the most impacted,” he said.

“It is just a question of how long does it last, how quickly we can get back to normal and what does normal look like afterwards?”

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