COVID-19 – What Does it Mean for the Trinidad and Tobago Tourism Industry?

By Arielle Salvary

The global slump in oil prices in 2015 was a pointed reminder to Trinidad and Tobago that the continuous dependence on the oil and natural gas sector is not feasible. This renewed the Government’s priority to diversify the economy and focus on developing other sectors aside from its traditional energy sources. Thus the  tourism industry became one of strategic importance especially due to the geographical region that the twin island-state lies as well as the significant contributions it can make to GDP, employment, foreign exchange earnings and encouraging local entrepreneurship. 

Although Trinidad and Tobago is regionally competitive in the international tourism market it still lags behind fellow Caribbean nations like Barbados and Bahamas. Recognizing this, T&T has reoriented its tourism focus and embarked on niche tourism, and with this in mind, in 2017 the Tourism Development Company (TDC) was dissolved and the Tobago Tourism Agency (TTA) and the Tourism Trinidad Limited (TTL) were established. This was done with the intention to promote each island as separate entities whilst simultaneously connecting both islands culturally. Following this move, several initiatives have begun with the aim to attract both foreign direct investment and a new set of international visitors through niche tourism markets like sport tourism, eco-tourism and business tourism. 

Nevertheless, tourism still accounts for only 7.8% of GDP (in 2019) and the industry itself only makes up 8.5% of total employment (WTTC, 2020). This is still very low in comparison to our regional neighbor Barbados where travel and tourism make up 30.9% of the total GDP and accounts for 33.4% of total employment (WTTC,2020). However, through the aforementioned developmental plans we should expect a significant increase in revenue coming from the tourism industry.

At least that was before COVID -19……

There has been no global event thus far that has had an impact on the tourism industry like the coronavirus pandemic. The shock that this international sector has faced as a result of the pandemic is unparalleled in nature. In order to mitigate the spread of the virus, countries around the world had to impose strict measures such as the reduction of business operations, social interactions and restrict international travel in an attempt to preserve the health and well-being of their citizens. These containment measures have directly impacted the tourism industry by causing a significant decrease in the demand for tourism products globally. 

On March 22nd, in Trinidad and Tobago, the Minister of National Security announced restrictions on all travel into the country and had instituted lockdown measures to curb the spread of the virus. This has severely impacted both islands but Tobago especially, as their economy thrives on the basis of both domestic and foreign tourism. Followed by the fact that after the Tobago House of Assembly (THA) the private sector is the second largest employer in Tobago and they depend heavily on tourism. Many local businesses in Tobago have either been forced to close permanently or have had to dismiss employees or reduce salaries as a means to cut back on costs. Taking all these things into consideration, the severity the pandemic has had on the livelihoods of the people of Tobago cannot be denied. 

Additionally, the pandemic has also caused the country’s world-renowned Carnival 2021 to be cancelled as at this present time there seems to be no physical way that the festival can be executed safely. Carnival is not only an important foreign exchange earner and source of income for Trinidad and Tobago but also a provider of seasonal employment for many citizens. Without Carnival next year many small and medium businesses that depend on the season to bring in significant earnings are unsure how they will make ends meet. 

Furthermore, the tourism industry is also one that has several linkages in the economy and a fall in activity in this sector will have a ripple effect to others such as construction, agriculture and transportation and as a result will further exacerbate the shock to the local economy.

The idea that the tourism sector will recover quickly from the effects of the pandemic is not likely. However, assistance must be given in the interim to keep the sector alive through the pandemic. Support by the Government as identified by the World Travel and Tourism Council must take the form of firstly protecting those employed in various industries within the sector by providing them with financial help. Secondly, fiscal stimulus should be given in the form of interest – free loans to small and medium enterprises as well as companies, and thirdly injecting liquidity through providing targeted cash flow assistance. 

The Minister of Finance during his budget statement identified some of the support measures that the Government of T&T has made available to those in the sector. These include the Tourism Accommodation and Relief Grant, Relief Business Grant, Business Relief Loan, Relief Grant to the Tourism Industry Ancillary Services, a 4 year Soft Loan Facility with a 2 year moratorium through First Citizens and Republic Bank for Micro, Small and Medium Enterprises and the Liquidity Support Loan Programme for the Credit Union Movement. He also made special note of the fact that the Ministry has acknowledged that the tourism industry is facing an unprecedented crisis and conversations will continue on how the sector may be supported better during this time. 

Nevertheless, despite all of its negatives, COVID-19 has actually provided us with a time to cultivate new and innovative ideas on how to develop our tourism market. The virus has brought with it a chance to re-think how we approach tourism development, making it more resilient in order to prepare for a safe and successful restart of the global sector. In the Caribbean we have seen our regional body the Caribbean Community (CARICOM) institute a travel bubble which is a major move to jump start the recovery of the tourism eco-system and although Trinidad and Tobago is not yet part of the bubble it is an important initiative that will help the industry recover. Especially since regional as well as international cooperation will be essential when it comes to making visitors feel safe to travel. 

Additionally, due to the fact that tourism is an interdependent sector between the Government and the private sector the halt in tourism related activities gives both stakeholders the chance to discuss strategies to improve efficiency and address long standing challenges. The downtime should motivate our stakeholders to innovate and create solutions that package the culture of the Caribbean for an international market. For example, many have voiced their interest in reimagining Carnival. Many stakeholders have introduced the idea of virtual Carnival or a pay per view for important cultural events, which is an excellent marketing strategy that would help us export our rich culture. 

With regards to the approach to the development of the sector, the Government has released a Draft National Tourism Policy (2020-2030) where it identifies several initiatives that will be undergone to improve the tourism sector. These include making T&T’s tourism product more environmentally, economically and socially sustainable, incorporating digital technologies into the promotion of the sector, encouraging investment and improving the infrastructure. Already, there has been an investment of $600 million in the sector and in 2021 Minister of Tourism, Randal Mitchell, says there will be a resurgence in the sector’s activities that will carry us back to our previous trajectories at the beginning of the year 2020. 

However, we must keep in mind, the tourism industry may not revert to pre-pandemic levels quickly or in the short to medium term future. Travel behaviors may be changed, tourists may still want to avoid large crowds after the pandemic therefore investments and policies should be directed at accommodating changed attitudes. Notably there may also be financial constraints from loss of revenue during the pandemic and small and medium businesses may struggle to adapt to these new measures since operationally they may be unable to survive with the new health and safety requirements.  

So in conclusion, using COVID-19 as an opportunity to rethink and redevelop the tourism industry in order to make it more globally competitive and sustainable is essential for a successful recovery. However, we must remain mindful of the strain that the pandemic is currently putting on the sector especially when it comes to Tobago. Although domestic tourism has more or less resumed under strict conditions, international tourism remains unavailable and while the Minister of Tourism has said that health protocols and guidelines have been prepared for the safe entrance of visitors, there is still the question of whether the support being given is enough to keep the sector alive and what more can be done. Currently, the timeline of the pandemic is indefinite but is the survival of our tourism industry under the present conditions the same?

References

  • Kowlessar – Alonzo, G. (2020). New Hotels Opening in Port of Spain and Scarborough. Business Guardian, 22 Oct., pp.4–5.

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