Travel demand down 80%-90%. Average annual hotel occupancies down 60%-70%. Unemployment rate over 20%. Booking cancellations mounting. UK Shutdown slashing year end occupancies by 50% for some resorts. Saint Lucia continues to reel from a three-month shut down of an industry that contributes to two-thirds of its GDP. Lives and livelihoods devastated.
In mid-March I sat in our 6th floor New York apartment with my husband and 4-year-old daughter, having just completed a promotional event in Toronto for Stonefield Villa Resort, my family’s boutique resort in Saint Lucia. It was officially a global pandemic and my husband was sick. It seemed like flu but we assumed the worse and my daughter and I isolated in the living room while he recovered. Our corner apartment had floor to ceiling windows surrounding us, so we had a birdseye view not only of the beautiful city skyline but also of the horror that surrounded us. We listened to sirens and watched as ambulances with medics in hazmat suits picked up the sick and the dead in our area.
In Saint Lucia, our resort team worked to get the last few guests on planes and back to their respective countries before the island’s borders were closed. While I quarantined in our living room with my daughter, I strategized with the resort team how best to deal with cancellations, drive re-bookings and how we were going to remain top of mind for travelers considering a Saint Lucia vacation. Cancellations came fast and furious and maintaining calm amidst never-ending challenging decisions was a mounting feat. We had no idea how long this lockdown would be or how this pandemic was going to play out. Neither did the world’s most powerful leaders.
Like our own, most of Saint Lucia’s other tourism businesses were experiencing a strong winter season. The path to getting rid of debt and growing business seemed bright. Average occupancies were in the 80s and 90s for most of the island’s resorts. St. Lucia’s airlift was slightly higher than it had been in 2019, especially for Spring and Summer 2020. Mark Adams, SLTA’s deputy chairman, laments that with the strong U.S. economy St. Lucia’s 2020 arrivals likely would have ended 5–8% above 2019. By the end of march, all resorts, villas and other tourism accommodations on the island were empty. Airlines were shutting down all scheduled flights to the Caribbean and the cruise industry suspended sailing until September 2020. The most experienced and accomplished in the business had never faced a challenge of this magnitude.
While government officials grappled to handle the shutdown, resort marketers were engaged in maintaining pandemic-friendly and socially conscious content on their digital and social platforms. We all sat and watched while our biggest source markets worked hard to flatten the rise of infections and deaths, and our government worked on plans to re-open while keeping citizens safe. The big question was whether people would want to travel when we did re-open?
What I did know was that after four months in an apartment in New York City I could not wait to feel sand between my toes and taste the salt-water air of the Caribbean Sea. I became extremely optimistic about the demand to travel. What strengthened my optimism was my own experience with COVID-19. I, too, became sick after my husband did. We both had mild symptoms and recovered within two weeks. We tested positive for the antibodies in May.
No doubt there were thousands of COVID-19 survivors, and many Americans, exhausted from the lockdown, anxious for an escape. However, many remained fearful, with the devastating death numbers and personal stories exposed across all media platforms.
With the announcement of the re-opening in July, I could not wait to get on an airplane. I had survived four months in a New York apartment playing hide and seek, catch, and patiently baking and cooking with my 4-year-old. My daughter is now excellent at making salads and fresh salad dressing. It will likely be years before my husband touches banana bread again. Meanwhile, Saint Lucia’s resorts engaged with the government to meet an exhaustive list of safety protocols. An entire quarter of revenue was lost, and hotels were now required to invest thousands of dollars in PPE, medical stations, full-time medical staff, and laundry facilities. Many resorts either struggled to meet the requirements and were unable to open on July 9 or made the financial analysis of cash outlay against expected revenue and decided not to open at all.
Government protocols are the same for small boutique resorts like Cap Maison, Ti Kaye and Stonefield Villa Resort as they are for Sandals, Coconut Bay and Le Sport. This has put the smaller properties at a disadvantage. According to Ross Stevenson, general manager of Cap Maison: “The protocols for us—a small Boutique 50 room/suite resort—amounts to EC$10,000 per month in additional costs to maintain current protocols.”
The impact on Sandals appears not to be as painful. According to general manager Gaurav “G” Sindhi, Sandals Regency La Toc: “We have gone even further to create hundreds of additional positions whose sole purpose it is to monitor our processes and ensure they operate at the very highest levels. While we have always had an extremely high standard of hygiene at all our hotels, we have spared no cost to enhance this since the safety of our team members and our guests, and by extension the general public, remains our priority.”
With rising cost complaints from smaller resorts, the island’s Chief Medical Officer has now offered flexibility with protocol modifications that can meet the hygiene standards while reducing the cost burden.
The issue of demand has been another factor to deal with. In the early months following the border opening, Saint Lucia was considered almost COVID-19 free, with only 26 cases and stagnant. The CDC positioned Saint Lucia as very low risk, and bookings trickled in. The resorts that were able to open early enjoyed thousands of dollars in positive PR from multiple travel publications and major newspapers in all our major markets. Some properties experienced average occupancies in the mid 60s at a high this summer.
However, the airlines were and continue to be fickle, with unexpected cancellations. Flights are being rescheduled but last-minute cancellations continue as the airlines reduce capacity for lack of bookings. Reports from the airlines have indicated that St. Lucia is performing better than many of its Caribbean counterparts. Nevertheless, sales are far below 2019 pre-COVID levels.
According to Mark Adams, Saint Lucia’s deputy chairman and lead SLTA strategist for airline growth to Saint Lucia: “The two key factors for the airlines are revenue and load factors. Over the last several years most airlines with service to St. Lucia have experienced 80%+ load factors and higher than average ticket prices. During this pandemic, both airfares [revenue] and load factors have been much lower.”
“At this point,” said Adams, “the airlines are not trying to make money. But they are focused on keeping losses as low as possible. There really isn’t a magic number, but judging from the results over the past four months, if the airlines see forward bookings high enough to achieve 50% or greater they keep their schedule and fly with the hope that late bookings will come in and they could achieve 60% or more. On the flip side, if they look at their scheduled flights 30 to 45 days in advance and they only see a 25% in advance bookings load factor they in turn cancel flights and consolidate passengers on a reduced schedule.”
As I write, local COVID cases are spiking rapidly and the CDC has placed Saint Lucia on Level 2 alert. This indicates that travel to Saint Lucia offers moderate risk, recommending that persons at risk of severe illnesses from COVID-19 postpone non-essential travel. This will now put the island on a quarantine list in source markets.
The challenge of demand is now even greater as this will increase the consumer’s reluctance to travel. Not only must we educate the consumer about the requirements and protocols of travel, but we must also drive pre-flight testing. Most Caribbean countries now have pre-flight testing requirements, and so the airlines have implemented the necessary procedures and it is working well. American Airlines has just launched a pre-flight testing program that has an in-home PCR test with an on-line tele-doctor component, making it easier on the passenger to get the test within the required time.
With Saint Lucia now listed as Level 2 for travel by the CDC, we must now niche target low risk consumers where quarantine upon return does not pose an issue. In the short term, protecting people and maintaining a healthy tourism industry are important. St. Lucia’s government must continue to protect its workers and the local population.
Says Le Sport and Rendezvous’ Andrew Barnard: “If destination Saint Lucia cannot offer certainty and safety we will rapidly fall off the list.” Our expert sources also stress that success requires frequent communication with the airlines, monitoring airline pricing and creating demand through innovative marketing and advertising that promotes St. Lucia as a safe destination. Every hotelier interviewed expressed some level of optimism.
Saint Lucia welcomed some 20,145 visitors from July 9 (the first flight arrival) through October 2020. As of November 10, the island has welcomed back Air Canada, American Airlines, Delta, JetBlue, Tui and United, from markets including Atlanta, Boston, Chicago, London/Gatwick, New York, Newark, Miami and Toronto—all positive signs to a slow recovery.
Winston Anderson of Sandals Grande states: “The travel sector is very resilient, and even now the feedback we are getting is that people still desire to travel. People still crave a vacation. We have a great opportunity to tap into that, particularly where many other destinations remain on lock-down. But rapidly changing situations makes it a bit more difficult for travelers to plan their trip, and that level of uncertainty is what we have to work to dispel, while ensuring the systems we put in place provide the strongest protection for our team members, guests and the general public.”
We know the government has limited means to support or underwrite a major industry. However, with financial relief from low-interest loans and grants, tourism enterprises and support sectors impacted should be assisted to avoid bankruptcy.
The owner of Ti Kaye Resort, Nicholas Pinnock puts it this way: “Travel will rebound when inconvenience and fear are replaced by their opposites.”
This is indeed the reality. Until a vaccine is available to the world, the key is to stop community spread, staying at a very low risk level for travel as defined by the CDC, effective testing policies, and driving increasing demand for the destination. Having left one of the USA epicenters of COVID-19 cases, one thing I know for sure, despite all the protocols, it’s good to be in Saint Lucia. There is no other place I would rather be.
Editor’s note: Cybelle Brown is a management consultant and hotelier.
Contact her at www.brownprojectsolutions.com
brownprojectsolutions@gmail.com
This article first appeared in the November 2020 edition of the STAR Monthly review, available here: https://issuu.com/starbusinessweek/docs/star-monthly-review-01
