Best Time for Rethinking of the Tourism Strategy

In last week's article, we started discussing what a long-term strategy could look like for awakening Dominica's economy. We noted that this is not per se a stimulus package towards resuscitation the economy in the aftermath of the adverse impact of the COVID-19 pandemic as, the truth be told, there is not much to resuscitate.

But certainly, the occasion of the COVID-19 pandemic provides a compelling action point to reset the economy, as the little life that was remaining in the economy of Dominica is being snuffed out by the COVID pandemic and there are potentially new trends, realities and opportunities that need to be incorporated into our economic planning.

In this series we have also already discussed the need for a rapid relief package as an aspect of efforts to minimize the social pain that will immediately result from the COVID-19 pandemic and to minimize the unravelling of what remains of the economy.

In the last article we focused the discussion on considerations for resetting the agriculture industry. We now turn our attention to the tourism industry.

The tourism industry in Dominica is small and has not been internationally competitive. This is disappointing given the tremendous potential there has been for making the industry a top performer in the Caribbean by offering a world class but special and different tourism product. However, the COVID-19 pandemic and the resulting global recession that is unfolding, has the potential to diminish the little that we have achieved in the industry. Efforts must be made to minimize the fall-out in in the industry, but more importantly, the occasion of the crisis can be used to prepare the industry to be more competitive than it was leading up to the incidence of the pandemic. The rise of the country towards its true tourism potential has evaded the country under an incapable and corrupt government over the last twenty years.

Let us recognize that the global recession that is unfolding as a result of the global pandemic is expected to be very sever, not unlike the great depression of the 1920s. Certainly, business has dried up for our tourism establishments and this will remain that way as long as our borders and those of our visitor source-market countries remain closed to normal business.

But beyond that, given the expected severity of the recession, Caribbean tourism is not likely to fully recover for at least another year. During that time, many tourism establishments may fail. If the government of Dominica had set aside reserves during the recent few years when revenue from the Citizenship by Investment (CBI) programme were significant, then the Dominica Freedom Party would have suggested to the current government to use some of these funds to help tourism businesses wait-out this long barren business period. But this is not an advice we can give as it appears that the much of the CBI funds were misappropriated or illegally mismanaged. The people of Dominica should continue to hold the political administration responsible for such brazen acts of injustice and defiance of the people.

However, the government may consider using loan resources from the IMF and other multilateral agencies to provide some of that support. Loan resources from the IMF alone will be far from sufficient to allow the government to cushion the blow from the global crisis. Financing from other sources must be attracted as we have discussed before, but even these will be significantly short of the idea amount required. But to increase the chances for accommodation and other tourism business to survive the period, a major consideration has to be the restructuring of business debt where this is necessary.

Beyond that however, the crisis period can be used as an occasion for renewal and for preparing the tourism industry to be more competitive. This could involve renovation and upgrade of property and staff training among other activities. Private business owners could be facilitated to do so through grants with strategic conditions attached. But we advise private owners to be creative and think through how this could be done as much as possible on their own, as they can't count on a corrupt government.

Additionally, the government should use the crisis period to upgrade the public space so that the natural beauty of the country can be complemented by the built environment. Resources for such support to the private sector and for upgrading the public elements of our tourism product should be included in a stimulus package. As much as possible consideration should be given to retaining employees in undertaking upgrade activities.

But the upgrading of the industry should be pursued and incentivized in the context of a rethinking of the tourism strategy given its current lack of competitiveness and in the face of new trends or hindrances that may arise post the COVID-19 pandemic. These should also set the stage for the expansion of the industry. Let us continue to discuss this in the next article.

Kent Vital Political Leader Dominica Freedom Party.