Recovery tricky in tourism-dependent Caribbean, LatAm
Recovery tricky in tourism-dependent Caribbean, LatAm
12 JUNE 2020 8:12 AM

Hotel leaders on a CHRIS HOLA 6x8 webinar shared what’s top of mind for hoteliers and the tourism industry in the Caribbean and Latin America.

GLOBAL REPORT—Areas of the Caribbean and Latin America that rely heavily on tourism were hit hard by the COVID-19 pandemic, but hotel leaders are looking at what needs to be done for the regions to recover.

On the “CHRIS HOLA 6x8: Recovery top of mind” webinar hosted by The BHN Group, industry leaders started out by saying what they think is needed now to start a successful recovery.

Alex Zozaya, executive chairman of Apple Leisure Group, said it’s “not a normal year” for tourism across the entire world. What’s top of mind for him right now is the number of jobs lost because of the pandemic and getting those jobs back.

“Tourism internationally, we have lost about 100 million jobs and about $3 trillion (in) tourism GDP, and that will continue if we don’t start to recover fast,” he said. “That’s what concerns me the most, but then how can we start the recovery as fast as possible?”

There’s a tight labor pool in the Caribbean and Latin America. When asked how his company will deal with furloughs and hiring people back in places with labor markets that are already tight, Zozaya said this will be different depending on location.

“There’s nothing we can apply to all of them, there’s no right formula other than we all want to come back as quick as possible. We want to keep our people in the labor force not only because that’s the human thing to do but also because it’s good business,” he said. “Our product is the people. It’s delivered by the people, and it costs us a lot of time and money to bring our staff to the point they are now, and trying to go back and (rehire) them will be very costly.”

Zozaya added that none of Apple Leisure Group’s properties stayed open and the company closed close to 30,000 rooms because of the pandemic.

David Kong, president and CEO of Best Western Hotels & Resorts, said more and more hotels in his company’s portfolio are starting to reopen, which is encouraging. Half of Best Western’s hotels are outside of the U.S., he said.

Isabel de Caires, director of investment banking at CIBC FirstCaribbean, said her company is currently focused on helping clients to get through the pandemic.

“We’re (supporting clients) in many ways,” she said. “Providing liquidity support through the provision of principle and interest moratoriums. We’ve also been providing working capital lines, access to otherwise restricted funds and covenant waivers such that our clients can really focus on their recovery efforts.”

What’s different in the Caribbean than it is in the rest of the world is how reliant the region is on tourism, she said.

“With the immediacy of our governments having to close borders almost entirely or, in some instances, entirely, the benefit to that is we have seen our case numbers be significantly lower than the global averages,” she said. “That’s allowed for the preservation of the safety of the citizens in the region and now has allowed the governments to really be focused on recovery efforts and what that looks like.”

The tourism industry in Mexico is more than just hotels, and it’s been “absolutely devastating” for the country, said John McCarthy, founding partner and principal at Leisure Partners.

“The labor force is normally around 4 million people. The estimate by (Mexico’s tourism roundtable) believes the quarter of the labor force—that’s out of 4 million—1 million are out of a job right now, and we have no social security to cover them as such,” he said. “Large companies have made big efforts to keep or pay half a salary in many cases to keep people with a way of life, but it has been terribly complicated.”

He added that 90% of business in tourism are companies with less than 10 employees.

“What’s really important here is for our government to understand that we have, over the last 40 or 50 years (in Mexico), we have gone from pretty much nothing to a powerhouse of tourism,” he said. “Mexico is the No. 7 country for seats of tourism, and if we want that to stay on, we must take action to stay there and to recover quickly.”

One word to describe 2020
Moderator Jeff Higley, president of The BHN Group, asked panelists to end the conversation by giving one word they would use to describe how they see 2020 unfolding and why.

  • Zozaya: “The one word would be hope, because I think we’re going to be better human beings and more sensitive to (experiences) … but my biggest concern right now is the prioritization and protectionism in the world. We’re seeing a lot more nationalism, people (looking more to inbound travel/tourism), and I think the lack of interconnection to all the rest of the countries … that’s my biggest concern.”
  • Kong: “Let me use the word faith. The hotel industry has been through a lot of crises, and we’ve always stuck together and worked together and relied on one another to … have resilience. Let’s have faith.”
  • De Caires: “I will say resilience. And I really do think that the Caribbean as a whole and as a people, we are very resilient. There has been tremendous collaboration across the public and private sector, and I have to believe if you’re going to be socially distancing, then better to do that on a beautiful beach in Barbados, Jamaica or elsewhere in the region.”
  • McCarthy: “I actually have two words: Creativity and capacity to react. And I think the banks have to be creative, the developers have to be creative, the restaurant owner has to be creative and you might invest something right now that isn’t working; you have to have the capacity to come up with something new and something different immediately. You need to learn to react (and adapt) to the changing situation.”
  • Raul Calvet, CEO, Calvet & Associates: ‘Two words: Cautiously optimistic. We still have to (field) the economic experience and the impact of the pandemic. We have to measure the reduction of demand and above all is the capacity in all the markets.”
  • Ricardo Mader, managing director, JLL: “Union. I think our industry has to be united. The airlines, the travel agents, the hotels … the only way for us to survive the next six months is to be united.”

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