US $125.7M loss projected for cruise, stay-over tourism due to COVID-19

   US $125.7M loss projected for cruise,  stay-over tourism due to COVID-19

Front Street was eerily quiet on Wednesday, as many businesses had closed their doors in adherence to the announcement by government that non-essential businesses should remain closed for a two-week period in an effort to fight the spread of the coronavirus COVID-19 pandemic in the country. Some non-essential establishments were still open despite the order.


PHILIPSBURG--Tourism Minister Melissa Arrindell-Doncher, on Wednesday, painted a grim picture of the potential financial effects of the COVID-19 pandemic on the country’s tourism sector noting that a US $48.9 million loss is projected for the cruise industry and US $76.8 million loss in stay-over tourism.  

  She told reporters on Wednesday that given the country’s current domestic situation and the drastic economic measures it has become necessary to curb the contracting and spread of COVID-19 as an economic analysis was conducted.

  “This analysis is quite important, considering the global developments, especially within the markets of the United States and Europe for which St. Maarten depends highly on for its economic stability,” Arrindell-Doncher said during the Council of Ministers press briefing. “In our initial findings, our analysis indicates that if this situation continues on its current trend, especially in the tourism sector, our economy will decline substantially for 2020.”

  She said cruise passenger arrival is projected to decline by 20 per cent for the year, same as for stay-over arrival. A 20 per cent decrease in cruise arrivals for 2020 means that there will be 326,307 fewer cruise visitors coming to the island. “Taking the assumption that on average a cruise tourist has an average daily expenditure of US $150, this would result in a potential loss of revenue in the sum of approximately US $48.9 million,” the minister said.

  “It should be noted, that with the already known cancellation of 52 calls that was announced on March 13, this would result in a loss of 150,000 (three months) visitors with a potential revenue loss of US $ 22.5 million (150,000 x $150) in our economy,” she explained.

  A 20 per cent decrease in stay-over tourism for 2020 means that there will be 64,000 fewer visitors coming to the island. Taking the assumption that on average, a stay-over tourist stays seven and a half days in St. Maarten; the effect is a total decrease of 480,000 in tourist nights. Additionally, with the assumption that a stay-over tourist spends on average $160 on a daily basis, this would result in a potential loss of revenue in the sum of approximately US $76.8 million.

  With the economic simulation, it is projected that there will be a decrease of 32 per cent in number of tourist days for 2020. Since tourism is a significant part of St. Maarten’s export product averaging 72 per cent annually, it would be negatively affected and will see a decrease of 20.6 per cent.

  In addition, import will decrease as well by 11.1 per cent; and since export decreases more than import, there will be a negative effect on the country’s Foreign Reserves.

  At the end of 2019, St. Maarten’s initial real Gross Domestic Product (GDP) was projected at 3.5 per cent economic growth for 2020, (based on projections before COVID-19 (2019-growth 5.5 per cent). However, with the ongoing situation, based on the analysis, this initial growth will see a decrease of 9.7 per cent for 2020. “It should be noted, that our tourism revenues directly and indirectly account for approximately 85 per cent of our annual GDP on an annual basis. If there is a decline from within the overall tourism sector [it – Ed.] is indeed a blow to our economy. This decline will inevitably have rippling effect on our business community, household sector as it relates to employment and dampening performance on our fiscal sector,” Arrindell-Doncher said.

  She said this is just a synopsis of the preliminary evaluation of the economy at this time. Further in-depth assessment will be conducted and shared with interested parties and stakeholders, to guide in decisions going forward.

  She said also that although most of the ongoing activities and events that the Ministry of TEATT is presently involved with falls within the operation of the Emergency Operation Centre (EOC) for which the Prime Minister reports on, in the interest of the wellbeing of residents and the business community, a number of stakeholders were and are engaged by the Ministry.

  “From these meetings, collaboration, initiatives, actions and programmes are been formulated to deal with our current situation and the cushioning of the aforementioned impact analysis,” she said noting that changes will be communicated in a timely manner to the public.

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