‘Lead or lag’

– IDB says innovative measures needed to aid recovery in local tourism industry

The Inter-American Development Bank (IDB), in its Caribbean Quarterly Bulletin: Imagining a Post-COVID Tourism Recovery, said while Guyana’s economy does not depend heavily on the tourism sector there is need for improvements to support growth and employment in the coming years.

Relying on global predictions, the IDB said the Tourism Industry could take 2-to-4 years to fully recover to 2019 levels but this would require heightened innovation and transformations that align tourism destinations and products with post-pandemic global demand trends.

The Caribbean, it said, could either lead or lag the global recovery, depending on the specific circumstances in the main Caribbean source countries and in Caribbean destinations themselves.

“Over the longer term, Caribbean countries must spur innovation and reinvigorate their tourism offerings,” said Olga Gómez, Tourism Lead Specialist at the IDB. “It is no longer enough to depend on the lure of splendid beaches. Tourism destinations need to invest in improving their competitiveness, aligning their tourism products to the broader local and global economic trends, and exploring new and traditional emerging market segments such as global nomadism or nature-based tourism.”
It said even for the less-tourism-intensive economies of Guyana and Suriname, where the tourism sector economic contribution is relatively small compared to the regional and worldwide averages, there is room for improving the sector’s contribution to growth and employment in the coming years.

Imagining a Post-COVID Tourism Recovery: Regional Overview analyzes key drivers of tourism demand in the short term, including the evolution of the pandemic and the COVID-19 vaccination roll-out, the economic environment of source countries, the split between business versus leisure tourism, and airline capacity, among others.
The report is part of the Quarterly Bulletin series produced by the economic and tourism sector team from the IDB’s Caribbean Department. While it analyses economic challenges facing member countries – The Bahamas, Barbados, Guyana, Jamaica, Suriname, and Trinidad and Tobago – many of its conclusions are relevant to the broader Caribbean region. The study contains more detailed economic overviews of the six IDB member countries.

The study presents global travel sentiment analyses and post pandemic tourism demand trends. Given travelers’ revealed preferences and the fact that most current tourism activity relies on the region’s attractive natural assets, environmental sustainability and climate change adaptation will be more critical than ever. These issues must therefore be prioritized in the public and private sector policy and investment agendas, the study says.

The report also updated the IDB’s Tourism Dependency Index, which calculates the relative dependence of over 160 countries globally on tourism for economic output, employment, and exports. Of the world’s fifteen most tourism dependent economies, eight are in the Caribbean, led by Aruba (ranked first in the world, with a score of 80 out of a possible 100 on the index), with The Bahamas, Barbados, and Jamaica joining the list of most tourist-dependent economies.

Overall, 2020 represented a contraction of international arrivals of 76 percent for The Bahamas, 67 percent for Barbados and 69 percent for Jamaica. This is in line with the estimate by the UN World Tourism Organization of a 67 percent contraction for the broader Caribbean region.

“On the positive side, firms have been adjusting business processes, and governments have been advancing in digitalization in response to the pandemic,” the report notes. “This form of innovation could lead to productivity increases that are sustained into the post-pandemic period.”