Resetting Dominica’s tourism industry in light of COVID-19 – Dominica Freedom Party

In the last of our first three statements on the new Coronavirus in Dominica, we started discussing the desirability for there to be prepared a meaningful rapid relief package and an economic stimulus package to respectively address the immediate social impact of the COVID-19 Pandemic on the people and awaken the economy. With regards to a stimulus package, our suggestion is not per se about a package towards resuscitating 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–19 pandemic and there are potentially new trends, realities and opportunities that need to be incorporated into our economic planning.  In our last statement, we discussed the need for a rapid relief package and discussed 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 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 COVID-19 pandemic is expected to be very severe, perhaps not unlike the great depression of the 1930s.  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 global 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 Citizen 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 mismanaged.

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 ideal 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.  As much as possible, consideration should be given to retaining employees in undertaking upgrade activities. 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.  Making the industry internationally competitive also requires upgrading infrastructure to include public road and airports. Investment in public infrastructure will have the additional advantage of filling the void in business activity as a result of a decline in visitor arrivals during the crisis and recovery period. Resources for support to the private sector and for upgrading infrastructure and other public elements of our tourism product should be included in a stimulus package.

But the upgrading of Dominica’s tourism industry should be pursued and incentivized in the context of a rethinking of the tourism strategy given the industry’s 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.

In reviewing the country’s tourism strategy, several questions should be considered. What makes or can make Dominica’s tourism special and different? How can that difference be packaged to appeal to potential investors in the industry and potential visitors? What target markets would bring the greatest return to the industry?  What new opportunities or realities arising from the COVID-19 pandemic should be reflected in our tourism strategy?  What infrastructure upgrades would be necessary to allow the industry to unleash its full potential?    The “big idea” of being the nature island of the world could serve as the foundation for differentiating our tourism product.  There is a need for clarity on what that encompasses so that the country’s product development and promotion efforts can be aligned to the big idea. For instance, being the nature island of the world should mean a commitment to conserving the natural beauty of the island, preserving or restoring the health of the natural environment including the degree of purity of our coastal waters and that of our rivers, the use of sustainable and organic farming practices, and ensuring that human activity and the built environment do not diminish the enjoyability of the natural environment.  There should also be a commitment to the adequate maintenance of trails/paths (including the Waitukubuli trail) to allow residents and visitors to enjoy the island’s natural assets.

Clearly, Dominica could be more competitive in the tourism segments of nature tourism, agriculture tourism and health and wellness tourism. Potentially, post the COVID-19 pandemic, interest in these segments may grow faster than that in the mass-tourism segment which is popular in many other Caribbean destinations. This is due to the tendency for these segments to cater to smaller groups that are not clustered closely together – for instance on a beach or in the hotel’s restaurant, as would more typically occur with mass-tourism.  In the wake of the COVID-19 pandemic, tourist may be more health-conscious and may more readily opt for the safer holiday option.

In these safer segments in which Dominica should position itself to be an industry leader, there is need for more guidance on the characteristics of visitor accommodation facilities that would best aesthetically complement and technically align to the differentiated tourism product we wish to achieve.  This could lead to preparing a “design code” that could reflect on the use of building material, waste disposal and the use of renewable energy among other areas.  It would also be important to encourage the minimizing of the carbon footprint of businesses, encourage the sustainable use of local materials, and encourage the engagement of local people and communities.  Such considerations could serve to tailor the type of upgrades that are supported and encouraged during the period of low visitor arrivals during the crisis and the unfolding global recession.

Similar consideration must go into the undertaking of upgrades to public spaces and the design of physical infrastructure. These must complement and enhance the differentiated tourism product we wish to encourage.  Moreover, difficulty in accessing the island by air from international origins has been a long-standing hindrance to attracting visitors and investments in tourism.  Seeking funding to address this matter along with the need to upgrade roads, would serve as an important stimulus to the economy during the crisis period while contributing to improving the competitiveness of the tourism product.  Such funding would have been more readily available had the government not misappropriated or mismanaged the CBI funds.

It is recognized that investment in the tourism sector will decline given that the current major source is the CBI Programme which was already at risk for reasons we previously explained.  Efforts ought to be made with respect to how investments in projects that were already under construction or planned under the CBI programme could be continued.  The construction activity under these projects could help cushion the fall in other areas of economic activity affected by the coronavirus crisis while allowing more rooms to become available that would strengthen the islands’ competitive position.

Notwithstanding there must be a new approach with the CBI programme going forward if at all it is to be salvaged. In that respect, there must be an honest and deliberate commitment to carrying out the necessary due diligence and there must be proper accounting and reporting systems and parliamentary oversight.

However, it is recognized that foreign private investor interest in the tourism industry will be depressed globally over the next year or two, due to the state of the global tourism industry and the unfolding global recession.  That notwithstanding, there may be opportunity to interest Dominicans living overseas to invest in the tourism industry given that they may understand well the potential of the country and due to their cultural connections.  However, Dominicans living overseas who may have the capacity to invest, may not have confidence in the current government.

Furthermore, the global disruption of the tourism industry, present an occasion for Dominica’s tourism product to be repositioned to compete for market share provided that the country can use the crisis period to become more competitive.  Therefore, a resetting of the industry must be accompanied by an appropriate promotion and marketing strategy.

Kent Vital

Political Leader

Dominica Freedom Party