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Irreversible Economic Damage Inevitable Without Urgent Strategic Action

The BVI Chamber of Commerce and Hotel Association (BVICCHA), as the proactive Voice of Business is raising the alarm that the current economic condition is grim and the anxiety and concerns of the majority of stakeholders in the Virgin Islands economy are well-founded. Based on recent accounts by affected business owners, the economy is in free-fall with reports of revenue having fallen by 30% - 40% for some small businesses in the last six (6) months and some as much as 60% in the tourism sector with the late opening to visitor traffic. It is important to note that the economy is intra-dependent and if a sector(s) is in distress, there is a significant impact across all. The local economy is also interdependent to the global economy and cannot survive without the injection of international dollars through the tourism sector. One retail and wholesale business estimated losing $400K in the past 6-7 months as public health restrictions have taken a severe toll from micro- to large-sized businesses. Operational costs have increased exponentially with the need for PPE and other sanitization measures being required. Many businesses, particularly in the tourism sector, are running on fumes and have exhausted retained earnings as well as personal savings trying to endure.

Whilst we are aware that this crisis is a global one, a well-organised local response is critical to business survival. The current situation on the ground is one where in the last quarter, the economy was set to contract at a shocking rate and the business sector urges the Government to present an economic analysis and reporting in order for informed decisions to be made.

  • One hotel owner estimates that their operating revenue is down $2.2M, a 60% drop compared to 2019. One survival tactic for many in the guest accommodations industry has been to push reservations until February 2021 in hopes to salvage the upcoming tourist season.
  • The Marine Sector is the most devastated by these current requirements as Government’s plan has no substance and not many elements have been produced despite having the framework in place! The charter boat sector has seen a decline of approximately 30% in investments with its yachts leaving the territory with considerably more looking to follow suit after last night’s announcement. The Marine Association is reporting an expected 60% contraction of this vital industry of which St Vincent and the Grenadines, Grenada, and the Bahamas are picking up vital market chunks from the BVI. This results in hundreds of millions of dollars being removed from the territory’s GDP and over a thousand jobs lost. The industry reports that the effects of decisions made now will have ramifications long after COVID has passed.
 
In light of recent policy announcements on the reopening of the borders to visitors, more questions than answers are being raised. Some concerns being raised are:
  • The proposed testing and quarantine periods are seen as a major challenge for most visitors and the hospitality sector stakeholders are wary of its viability. Whilst it is meant for public health and safety, it will be a deterrent to travel and further jeopardises the very thing we are trying to save – livelihoods. In the scenario of the business traveler between the USVI and PR, this does not facilitate commerce in a meaningful way if persons are restricted in the same manner as a leisure traveller. It would have been helpful if the policy with the statement was shared so that the details could be understood and input given so that plans reflect the various dynamics of doing business in the Virgin Islands.
  • Clarity is also needed as to who will bear the cost of the series of testing being required for each traveler as this will add significantly to already increased costs of travel.
  • It is not clear the approach that will be taken for visitors (domestic and international) to access our destination via seaports and which of the five ports will be opened. The marine ports of entry are the lifeline to the sister islands and the uncertainty is creating a further frenzy in the yachting sector.
  • Clarity is needed on the contact tracing app and how it will affect locals. If a visitor were to be diagnosed positive for COVID-19, how would “unknown” contacts be traced, especially in cases where persons travel inter-island in the Virgin Islands?
  • We would like clarity on why a curfew is still in place when we have no new active reported cases of Covid-19 for some weeks. This undue burden and restriction on business hours and our community is unnecessary and unwarranted. 
  • There is also concern about the late notice of certification program requirements over the last month and raises doubts about the ability of the entire economy to be ready and compliant by 1 December 2020.
  • There was no mention of whether travelers from medium- or low-risk countries are subject to the same protocols and it would be beneficial to have a tiered system that would foster travel from safer points of origins in an effort to keep the community safe.
  • There was also no mention of the destination marketing strategy by the BVI Tourist Board that is in effect or to go into effect in order to restore traveller confidence.
  • An urgent communication of the decision on the workforce furlough extension which expires on 31 October 2020 is needed and it is recommended that it be revised to 30 March 2021 to allow businesses sufficient time to ramp up operations. If not extended, severance payments will bankrupt businesses and costly to restart the hiring process.
All of the above points to our previous recommendation of the urgent strategic action of a Comprehensive Economic Recovery Plan that addresses all these are critical details that business owners need to hear as we do not run our operations in silos and cannot effectively plan and manage with ad hoc information. Furthermore, the late communication of interrelated information which has been the norm before and during the pandemic is viewed as unacceptable and unprofessional and adds to the high level of anxiety and stress already brought on by this health crisis. We also recommend the development of risk thresholds and protocol parameters that allow for greater freedom when Covid-19 risk is low and more restrictions when Covid-19 risk is high.  A sliding scale that reflects infection rates will give businesses the information needed to manage their business’ recovery in an effective and efficient way.

The business sector desires to see more meaningful dialogue about plans being proposed and purported to be in our interest but are reflective of a lack of involvement of all relevant stakeholders in the economic recovery planning process. In a recent meeting with various industry representatives the idea of an Economic Advisory Committee, made up of public sector and business sector representation, was proposed to give the “business” perspective and aid Government in optimizing its strategy to return the country to economic viability.

The BVICCHA wholeheartedly endorses this idea as it aligns with its value of stakeholder collaboration and the value-add that it brings to the environment that is needed for businesses to thrive, even in a downturn. This committee would facilitate the recovery response as well as advise on the development of a National Development Strategy that provides a holistic vision for the country and addresses economic vulnerabilities that we can longer afford to side-line.

We encourage all business owners to stay engaged as we get through this together and pivot to a new business normal. Tough times do not last but tough people do! For more information about the Chamber, visit our website at www.bviccha.org. Remember, Your Business Is Our Business! We Got You! Please follow all public health guidance for doing safe business in order to be safe and well.
 

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