True fallout yet to come
When the Cruise Lines International Association (CLIA) announced in March that several major cruise lines, including Royal Caribbean, Carnival, Norwegian and MSC, had voluntarily halted sailing operations to and from U.S. ports for 30 days due to COVID-19, some business people, other tourism stakeholders and members of the wider community were hopeful that the suspension would not be a protracted one, and that they would get back to business in the short term, even if it was only at a reduced pace.
But as the weeks passed and the pandemic’s horrific grip and shadowy threat expanded, cruise lines pushed their sailing dates off further and it quickly became clear that the impact on tourism would be much more severe and last much longer than many had hoped.
Come July 1, The Bahamas’ international borders will reopen, even though many hotels will remain closed until in the fall.
It will be months, however, before cruise passengers return.
The CLIA said last week that cruise lines voluntarily agreed to a new suspension time frame with September 15 being the earliest a ship will leave U.S. ports.
That’s very bad news for the economy in general.
Downtown Nassau enterprises and associated concerns are understandably worried.
Ed Fields, managing director of the Downtown Nassau Partnership, told National Review, “To say that this will have a rippling effect on the Bahamian economy is a significant understatement.”
Fields noted that for over 30 years, the lifeblood of Downtown Nassau’s economy has been the cruise industry and that lifeline has been cut off since March 13.
“It is one of many industries that is the poster child for COVID cause and effect, and there is nothing anyone can do about it. The ships bring the customers. Until they sail, there are no customers.”
That means merchants, both big and small, are taking a huge hit and will likely do so for some time to come.
John Bull, which was established in 1929 during the Great Depression, has weathered many storms, but its Director of Business Development Inga Bowleg said this pandemic has brought “unfathomable long-term challenges”.
“We can honestly say that navigating our great company through these unprecedented times has been the greatest single challenge of our careers,” Bowleg said in a statement to National Review.
She added, “While it’s been a rough ride over the past few months, we are bracing for impact as we fear the true fallout is yet to come. It only takes a drive through Downtown Nassau to obtain a true picture of our reality with the absence of cruise passengers and visitors in general.
“As downtown merchants, our new reality consists of reduced staffing levels, reduced store hours and some temporary store closures due to the drastic decrease in foot traffic.
“The news of cruise ships not returning until Q4 further exacerbates an already bad situation as there are additional challenges. To date, landlords have worked with us on reduced rental payments, but as no one expected the extended delay to cruise ship arrivals, we have yet to see if property owners are willing to continue these concessions. With several stores and boutiques on Bay Street, we’re faced with expenditure remaining the same while stores take in little to no revenue.”
While John Bull is open, along Bay Street, most businesses remain closed.
Although the prime minister has relaxed restrictions imposed three months ago in an effort to contain COVID-19, many merchants and business people say it makes no sense for them to reopen at this time as the cruise business represents over 90 percent of their sales.
“It’s simple math,” noted Tony Skandaliaris, whose family owns Smugglers restaurant downtown and rents space to other merchants on Bay Street.
“If you don’t have any customers, you’re not going to make any money. You can’t open the store, so what’s happening now is we’ve had to compromise with our tenants because it’s not their fault and it’s not the landlord’s fault either, so we try to share the problem. But it doesn’t look good.
“I know that a lot of people are talking about closing up shop. There are going to be a lot of vacancies on Bay Street. This year is a write-off for doing business on Bay Street.”
Smugglers has about 20 employees. Skandaliaris said his company rents out about 30 other stores. He estimated that each of them employs about four people.
Titan Hospitality, a restaurant and services company owned by Skandaliaris, has businesses in other areas of New Providence too. They collectively employed more than 400 people prior to COVID-19. Right now, only 27 of them are still employed.
One long-time Bay Street merchant, who asked that his name not be used, told National Review he is getting ready to permanently close two of his stores. He will still have a few left, for now.
“I don’t have any choice,” he said.
“The numbers are not going to be here…they say September. That means November. The only people who are going to be left standing on Bay Street are the foreign element who have huge dollars to be able to pay the rent. I heard that one jeweler is going to close two locations, two other big souvenir stores have already closed. Many closings are coming. This is only the start of it.”
The businessman, who has been downtown for 25 years, noted that there used to be an average of 20 ships per week.
Even when cruise ships start sailing again, it will likely be a long while before business gets back to pre-pandemic levels.
“We are going to be down to six to 10 ships if we are lucky,” the businessman noted.
“Those ships are going to be 50 percent full. It seems that is the way the CDC (Centers for Disease Control and Prevention in the United States) is going to go; 50 percent occupancy on the ship and 50 percent staff, so this is going to be a long haul.”
Lefteris Mitrogiannis has been a Bay Street businessman for 30 years.
“I have never seen it [this bad],” he said. “This came out of nowhere. Let’s hope for the best, but right now things don’t look too good.”
Mitrogiannis, who owns three Effy Jewelry stores and one Prestige Silver store downtown, said there is no point in opening right now.
“If the cruise ships aren’t starting to come back and the hotels aren’t open, there’s no point in opening. There’s not much we can do,” Mitrogiannis said.
He said 98 percent of his business is dependent on the cruise industry.
“We would like to open as soon as possible,” Mitrogiannis added.
“If we get any good news from the cruise lines, if they tell us ‘we’re coming back in two weeks’ we will open right away and have my staff part-time, like two, three days so I can pay all my employees. Right now, to open without any traffic, it makes no sense. This is very bad.”
Thousands of Bahamians who depend on the cruise industry — both directly and indirectly — for work are left with little to no prospects.
“We depend on the tourists, and so without the tourists there ain’t no us,” said Celestine Eneas, president of the Straw Vendors Advancement Association.
In March when things were starting to shut down, we found Eneas at her stall in the downtown market.
To get our recent comments from her, we called her at home.
Eneas is hoping that stopover visitors will bring some business to the market, even if it is only a trickle.
“If we have tourists coming in through the airport…all the vendors might not want to go back to the market, but the few who want to go, allow them to go because if they go out there and they make $50, that’s $50 more than what somebody is going to give them,” she said, noting that some families were sharing a stall at the market.
Eneas, who has grown children, said she worries more about the vendors who have young children to care for.
“It’s very hard,” she said, “very hard.”
In response to the tens of thousands of Bahamians who lost their jobs as a result of the pandemic, the government initially made in excess of $10 million available to be disbursed through the National Insurance Board (NIB), to self-employed workers in the tourism industry and then other self-employed Bahamians adversely impacted.
The prime minister announced in Parliament on Monday that the assistance is being extended from 13 weeks to 26 weeks. The government has budgeted over $40 million to provide a special allowance for those still unemployed when their NIB unemployment assistance ends.
Eneas told us, “Vendors are grateful for any little help that they can get.”
Noting that the cruise pull-out came before the complete shutdown ordered by the prime minister on March 20, Wesley Ferguson, head of the Bahamas Taxi Cab Union, said taxi drivers, too, have faced a devastating impact.
“There is nothing out there to do, so the drivers are just like everybody else, out of work, just sitting down home waiting on the country to reopen to see how best we can start supporting our families and taking care of ourselves,” Ferguson said.
While uncertainly is likely to persist for months, he remains optimistic.
But Ferguson added, “None of us can say with any degree of certainty that it’s going to be okay because we’ve never experienced something like this before. This is a new way of operating for taxi drivers everywhere. What we were used to before the pandemic is not going to be the same requirement after the pandemic.”
Taxi drivers will be allowed to resume work come July 1, under social distancing rules.
Byron Coley Austin, of Tiki Bikini Hut at the now empty Junkanoo Beach, is also preparing to open next week. It will allow out-of-work employees to return, if only part-time.
“We’re going to offer all of our services to locals at a reduced rate and we feel positive because we’re open air and everything we do basically is outdoors and we hope that we will be able to capture the local market,” Coley Austin said.
He added, “I’m enthusiastic about the future and I think we can have a positive outcome if we just unite and work as one. I have 5,000 followers, previous guests, and most of them are telling me that they’re going to return in September, January, so I’m really positive about it. I think we just have to recalibrate and do things differently.”