A newly released Inter-American Development Bank report lists The Bahamas as fifth in the world and third in the region on the tourism dependency index.
In the region, only Antigua and Barbuda and Aruba are listed as more dependent on tourism after compiling exports data from the years 2014 to 2018.
Researchers suggest in the report that for countries like The Bahamas that depend on tourism, the novel coronavirus (COVID-19) pandemic is an unprecedented shock and governments in the region will have to look beyond traditional policy tools to ensure that the tourism sector is in a position to resume its substantial contribution when the crisis dissipates.
“There is nothing that can be done to replace or stimulate demand for tourism in the short run, but governments can provide focused and tailored support to preserve productive assets, help replace lost incomes for individuals engaged in the sector and use the interim period to prepare the ground for the resumption of activity under uncertain circumstances,” the report “Extreme Outlier: The Pandemic’s Unprecedented Shock to Tourism in Latin America and the Caribbean” noted.
“The COVID-19 shock to tourism in Latin America and the Caribbean represents an unprecedented extreme outlier event and government interventions to support the sector and their citizens must be equally unparalleled.”
The index was calculated using five-year averages (2014 to 2018) for the total contribution of tourism to total export receipts, gross domestic product and employment for each country.
Trailing The Bahamas were St. Lucia, Dominica, Grenada, Barbados, St. Vincent and the Grenadines, St. Kitts and Nevis, Jamaica, Belize, the Cayman Islands and the Dominican Republic.
The report analyzed six external shocks over the past two decades that would have impacted regional tourism, namely the 9/11 attacks in September 2001; the Severe Acute Respiratory Syndrome (SARS) outbreak between November 2002 and July 2003; the global financial crisis between December 2007 and June 2009; the 2009 H1N1 flu pandemic; the Ebola outbreak between December 2013 and June 2016; and the Zika outbreak between April 2015 and November 2016.
Researchers found that the global financial crisis was the shock episode that most resembled the financial crisis associated with the COVID-19 pandemic on regional economies.
“In terms of how the financial crisis and other periods of decline over the past two decades compare to the current situation, it is difficult to draw parallels. A review of tourism arrivals between 2000 and 2018 reveals that the largest single-year reduction was about five percent relative to the previous year in 2002,” the report notes.
“The near complete shutdown of both passenger air travel and cruise ship activity beginning in March 2020 would imply a much larger shock to tourism arrivals and related receipts for 2020 and perhaps beyond.”
With that in mind, researchers suggested that policymakers from tourism-dependent countries should focus on interventions aimed at ensuring that operators in the sector and those who rely on it for employment are insulated from the shock.