‘We are hanging on by the skin of our teeth’

Special report: Small business crisis

The arrival of a COVID-19 vaccine on Cayman’s shores means the end could finally be in sight for a crisis that has had a devastating impact on pockets of the local economy.

Small and micro-business owners in retail, tourism and transport have been among the worst hit. Even with light at the end of the tunnel, many are struggling to hold on to their businesses as bills mount up after almost a year without customers. They are pleading with government to provide more support to ensure they are still there when the tourists come back.

When taxi-driver Hyacinth McField invested in a new vehicle at the end of 2018, it seemed like a smart business move.

The island was experiencing record tourism numbers and she had been told a more modern vehicle would allow her to join the line of cabs waiting for five-star visitors at The Ritz-Carlton resort.

The strategy paid off for a while. She was able to afford the $700 monthly repayments and cover her expenses, but the margins were slim. Then coronavirus came, the airport closed, and everything changed.

“My roof is on fire,” she said, “I am really in trouble.”

She still goes out every day looking for fares, but sometimes returns with barely enough cash to cover her gas.

McField is one of 2,898 displaced tourism workers currently receiving a $1,000-a-month stipend from government. That helps cover food and utilities, but she is drowning in bills and is at risk of losing her vehicle.

She has had to give up her health insurance because she can’t keep up the monthly payments.

“I am over 60 and I am just praying I don’t get sick because I don’t know what I would do then.”

Small business struggles

Many other self-employed Caymanians and small and micro businesses are in the same boat, according to a Chamber of Commerce survey.

In the poll, late last year, 85 out of 110 businesses said their survival was ‘directly threatened’ by the pandemic. Just under a quarter of those said they were at extreme risk of being forced to close. More than 50 out of 82 businesses surveyed said they would likely have to make lay-offs within the next three months.

The survey was largely focussed on small business, with more than 70% of those who responded employing 15 people or fewer. 

Tour operators worst hit

The Compass spoke to more than a dozen operators, mostly in the taxi, tour bus and water-sports trade, about their experiences during the pandemic and their fears for the future.

Troy Leacock, owner of Crazy Crab water-sports company, said the $1,000 stipend was helpful to cover basic survival costs for people out of work.

He said most businesses supported the continued lockdown and had willingly sacrificed their own financial wellbeing for the good of the island. But now he says many are hanging on to survival by a thread, and need more support if they are to be there when the tourists return.

“As a country,” he said, “we have taken a political and social decision to close our borders and I happen to agree with that decision, but for those companies that are impacted, it is important they are supported to survive.

“We (government) have millions of dollars surplus, the rest of economy is thriving, and they have forgotten about the people impacted by the decision to keep the borders closed. The price of that (border closure) needs to be borne by everyone – we are very much the forgotten industry.”

He said there was no sense in people who had completely viable businesses retooling and retraining to do something else. His business had 100 charters booked for March before COVID-19 struck. Even with continued advertising and reduced rates, the most he has done in any month since then is six charters.

Leacock said many operators were in the same situation, with life savings invested in businesses that had everything going for them – except for customers.

“I am imploring government and society as a whole to try and understand what is happening with Caymanians and Cayman businesses that are literally dying, and figure out what can be done to help us survive this,” he said. “We as a society have responded amazingly well to the health pandemic. I am proud to be Caymanian and living in Cayman at this time, there is no other place I want to be.”

Troy Leacock. Photo: Alvaro Serey.

“But the health pandemic is not the only issue; many people and businesses are suffering terrible devastation, loss of earnings and savings, the loss of business in which they have invested every penny or have borrowed heavily to create.

“These businesses are being destroyed by this pandemic and it is important that people and government really understand the magnitude of this and that, even though they might not be in hospital on a ventilator, they are suffering anxiety, depressions, sleeplessness – all kinds of health problems.”

Many tour operators have heavy financial investments in their business and just need some help to get through to the other side of the virus.

“We are hanging on by the skin of our teeth,” said Vana Bennett, of Double Trouble Charters, a family business that has three boats running Stingray City and snorkel charters.

She is happy to hear that the vaccine could lead to some resumption of tourism in the next few months, but the loss of the winter busy season has hit hard and the expenses are mounting. It is a constant battle to ensure the business is still there when the tourists return.

“We have to ensure our Trade and Business Licence is up to date, our insurance is up to date, our boats are up and running and ready to go. Every penny we have spare goes towards the boat.”

High season gone

A January weekday at Stingray City would ordinarily be packed with boats and jet-skis. But this month there was just a handful of day trippers and operators involved in a government-sponsored programme to feed the rays and ensure the long-term viability of the attraction.

Making sure the rays are there for future visitors is just one part of the equation. Several operators say the Caymanian-owned small businesses that are the backbone of the industry are equally threatened.

Stingray City sandbar would ordinarily be crowded with tourists right now.

Lee Frederick, of Cayman Paradise Tours, said it had taken time for the full impact of COVID-19 to take its toll.

“We were just coming into slow season when this thing started, so it didn’t make a big impact right there and then,” he said.

But as time wore on and the business savings whittled away, reality hit home.

“Seeing what was coming down the line month after month, it was, like, ‘Wow, this is not looking good,’ and there is still no end in sight.”

He said it had taken 15 years to build up his business to the point where he had three boats and five employees. At the start of the pandemic, some of his staff had to move into his home with him to help them survive without income.

Now, his main worry is the expense of keeping his boats in shape for whenever tourists return.

“The more the vessels sit there not doing anything, the more problems that creates. Sometimes, it is even more expensive to not run the boat.”

Some businesses were able to access grants through the Centre for Business Development, but most water-sports operators and taxi and tour businesses which depend on tourism were not eligible.

Minister of Commerce Joey Hew told the Compass last month that those funds had been specifically designated to provide economic stimulus by supporting companies that could keep running during the lockdown. He said they were not designed as relief payments for businesses that were struggling to meet expenses as they hold on for the borders to reopen. He said alternate support would be considered in the new year.

Rescue fund needed

Sanya Moya, secretary of the Cayman Islands Independent Tour Bus Association, believes something should be made available to help prevent operators from going under.

She said the association believes it will be more cost effective in the long term for government to provide support to keep those businesses running so they would be able to earn income to look after themselves and their families when tourism returns.

“It seems like they gave the grants to people that didn’t need it,” she said. “I have never been to [the Needs Assessment Unit] in my life. None of us want to rely on handouts. If they gave us a grant, we could help ourselves.”

As it stands, many bus and taxi operators fear they will be forced to sell their vehicles and give up their businesses before tourism returns.

Several drivers told stories of having their electricity or water cut off because of unpaid bills. Almost all of them said they no longer had health insurance. Help from the Needs Assessment Unit has been unreliable and inconsistent, they told the Compass.

“Lights, water, food,” said Gerry-Mae Gould, another tour-bus driver and president of the association, “that is where the money goes.”

Meanwhile, the costs of maintaining a business have not gone away in the absence of customers.

“My bus licence just expired on Christmas Eve and I need to find $1,800 to renew it,” Gould added.

Wear and tear on unused cars and buses is another concern.

“My vehicle has been parked for so long it is starting to rust,” said Moya.

“We are hanging on,” she added, “but we need help, we can’t even pay the bills.”

Uncertainty around reopening

Though Premier Alden McLaughlin has indicated that the borders could reopen from March to those who have received vaccinations, that is unlikely to mean a full resumption of tourism as normal.

Premier Alden McLaughlin became the first Caymanian to take the COVID-19 vaccine. Photo: Taneos Ramsay

The complex logistics of vaccination programmes in Cayman’s source markets, primarily the US, and the fact that children cannot yet be vaccinated, means there is significant uncertainty around the industry.

If and when cruise ships will return to the island is another unanswered question.

Leacock said the prospect of visitors and business returning remains a “moving target”.

He said it would likely take many more months, even years, before business as usual resumes.

Faces of the industry

The country risks losing more than just a handful of small businesses, said Gould; it risks losing the Caymanian faces at the forefront of the industry,

She said many of the tour operators had been showing off the island to visitors for decades. Now in their 60s, the chances of finding alternate employment are slim.

“We helped build the tourism industry. We were there in the dark every morning, pulling a number at the cruise terminal and we were still working in the dark in the evening. “We are the Caymanian ambassadors for tourism.”

Errol Reid, 75, who has been driving tour buses in Cayman for 47 years, said the industry risked losing a wealth of knowledge if veteran drivers are forced out of business.

Errol Reid

Jonas Bush, a water-sports operator, agrees. He believes small local operators could be gone by the time tourism as we know it returns.

“People want local flavour, local charters,” he said. “They want us to be there when tourism comes back. Local companies are special to the country.

“I have been in business for four years, I was doing great, but I have worked through all my reserves, we are at the end of the road. We don’t know what to do, don’t know what is going to happen.”

He said the success of the rest of the economy had obscured just how bad things were for those who rely on tourism.

“The businesses left out in the cold are not getting any help. It is a sad, sad situation.”

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3 COMMENTS

  1. As a long time visitor who bought a condo 5 years ago, granted residency last June and now finally going thru quarantine and excited about spending my money here, I would propose the govt to allow any tourism related permit a one year free extension. A simple way to help people who are struggling to even feed their families.

  2. We own a second home on the North Side of the island and live in the states. Unfortunately, with the restrictive guidelines that the government has set, I don’t see us being able to return to the island until maybe at the end of the year or 2022. Until this past March, we have been coming to the island for over 20 years, we would come at least 6 or 7 times a year staying a couple weeks at a time. Very few people in the world are in a position that they can quarantine for 14 days, even as an owner. The concept of being able to get 2 doses of the vaccine in the US, when you can’t even get one is unheard of. My heart goes out to all the people in Cayman, opening the boarders in March under these guidelines will do nothing for you. You can’t get a vaccine in the US unless you are a healthcare worker and there is no discussion of ever getting a second dose. My children can’t even take the vaccine because it’s not approved for children yet. I truly hope your government reconsiders, everyone that works around the service industry is sadly going to be destitute, if they aren’t already are by the end of this year. I miss the island terribly!