The Coronavirus’ Impact On the Caribbean

Countries across the world are wrestling with the coronavirus outbreak. First detected in China, the virus has spread globally, but especially to Asian nations. The US, Canada and several European states have also had confirmed cases. All told, already over 37,000 people have contracted the virus worldwide, the majority in China. Such a statistic is undoubtedly confronting, and the virus’ threat to both life and business is substantial, yet matters need to be considered in context, especially in the era of fake news when sensationalist headlines are always on offer. When it comes to the Caribbean, how is the coronavirus likely to impact its key industry of tourism? And how comparable is the coronavirus to other outbreaks?

Information Sharing

The ‘pneumonia-like’ virus that broke out in China’s Wuhan province was first officially reported to the World Health Organization by the Chinese government on December 31 last year, but evidence suggests it had existed there for some time. It is now clear that the Chinese government’s secretive nature and selective information sharing means its handling of the outbreak has left much to be desired. 

Regionally there is a caution here, one that has hopefully been learned from a similar crisis. The experience of Chikungunya in the Caribbean and the Americas (with world health officials casting suspicion on statistics provided locally due to doubts surrounding the reporting standards of some nations) shows that if governments are not ready to present a clear picture, other authorities around the globe will fill in the missing pieces of the puzzle. 

International co-operation is important, not just in relation to containment of the virus, but for retention of commerce. Whether intentional or otherwise, countries that do not keep pace with testing and reporting of an outbreak, risk doing immense damage to their commercial reputation. Presently, Caribbean nations are walking a tightrope, trying to balance the need to protect health with efforts to minimise the long-term commercial impact of the coronavirus. 

Local Impact of a Global Outbreak

This current outbreak remains a fluid situation; scientists are working hard to find a cure but the forecast is that a medical solution won’t be available until at least the middle of the year. The capacity for Caribbean nations to brace and sustain amidst this challenge depends on how well each state can rely on procedures it has implemented, and this is indeed a new and different kind of crisis, especially given the vulnerability of the regional tourism industry to the consequences of this virus spreading.

In 2017 Chinese tourists took some 131 million trips overseas (including mainlander trips to the Special Administrative Regions of Hong Kong and Macau). This represented a 7 per cent increase on 2016. Faced with the present outbreak, Royal Caribbean and Norwegian Cruise Lines have announced a ban “until further notice” on any passengers who hold passports from China, so the local impact will be felt in the long-term fallout, as this crisis will not end soon.

Royal Caribbean alone has indicated that it stands to lose some US$ 50mn and expects to take a hit of 25 cents per share following the cancellation of eight cruises originally set to depart from China. In another sector, just as the SARS epidemic cost global airlines US$ 7bn, the financial impact from coronavirus is expected to exceed that. 

Despite the best efforts of individual nations, history suggests that the fallout could be indiscriminate across regions. 

Following the outbreak of the coronavirus, Saint Lucia took action by prohibiting the entry of the 3,000-passenger AIDAperla cruise ship on February 1. Dominica followed suit the next day. With other Caribbean nations, like Trinidad and Tobago, and Jamaica, also implementing coronavirus-related travel bans, maintaining regional health and tourism revenue could ultimately come down to ensuring that a ‘weakest link in the chain’ does not break.

As a result of the Ebola outbreak, Sierra Leone saw a 50 per cent dip in its tourist arrivals from 2013 to 2014. Even though travellers were cautioned to avoid the Ebola zone in West Africa, nations as far away as Kenya (over 3,000 miles to the east) saw a substantial decline of tourism revenue due to the perception that the entire continent was a risk.

If, many months from now, the Caribbean has retained its record as a coronavirus-free region, then the worst effects of the virus on health and tourism will surely be avoided. Nonetheless, beyond tourism alone, China’s growth has been so rapid, and its connections within the global economy have become so deep, that this current outbreak is truly on a different level. Just as the World Bank’s 2002 estimate of China’s GDP of 

US$ 1.471tn now seems small compared to its latest 2018 estimate of US$ 13.608tn, so too does China’s ascent from the world’s sixth-largest economy in 2003 to today being the second-largest, mean that even fewer nations can hope to shake off the economic downturn that Beijing now faces domestically, and that all states trading with it must contend with globally. 

Pursuing Regional Defence and Recovery

When all factors are considered‚ the Caribbean tourism industry is set to sustain a heavy hit as result of the coronavirus outbreak. As Africa’s experience with Ebola showed, perception can have more impact than the facts when it comes to disease containment. So, even if most, if not all, Caribbean nations successfully prevent a local case of contraction, the fear of this virus is likely to keep many would-be travellers from booking a cruise (or similar holiday) until it is certain that this outbreak has been contained.

For countries like Saint Lucia there can be some solace in the fact that there has been strong growth in tourism in recent years, and so the fundamentals of future growth, separate from this crisis, remain promising. In the meantime, regional nations must prioritise their defence against the coronavirus threat until a cure is obtained. The focus on economic recovery can begin once lives are no longer endangered.