While some may view it as premature to speculate, given our dependency on tourism, without any other sector on the horizon to replace it, partially or totally, it is perhaps not quite so silly.
Many airlines have taken this ‘opportunity’ of the current crisis to downsize their fleets, especially with the larger oil derivative guzzling planes like the four engine Airbus A380, A340 and iconic Boeing B747’s.
The aircraft have either been returned to lessors, parked or stored and in some cases have found their way into air freight usage. Therefore it is unlikely that ‘we’ see any of these passenger capacity giants again.
Much discussion has taken place about removing middle seats to give some impression of ‘social distancing’, once flights return and this has given rise for leaders in the industry, like the Director General, Alexandre Juniac of IATA (International Air Transport Association) to speculate that no longer will ‘cheap travel’ be available. I am not sure this prediction will become a reality as already some low cost carriers are using bargain prices to drive 2021 bookings.
A bigger concern is the tens of thousands of people who are still owed refunds by major airlines for cancelled flights, even though the law clearly states the maximum repayment period. This will clearly discourage many would-be travellers to book and pay for forward dates.
It is in the interest of almost every Government to ensure that air routes are restored as soon as safely possible, being the only practical way that our visitors can reach us. Of course, there will be a pent-up demand to travel, but we have to remember that all of our principal markets have suffered severely depleted incomes caused by widespread unemployment for a sustained period, and obtaining perceived value-for-money will be an increasingly important factor in their destination choice.
While, our Government will remain under severe fiscal pressure, they may be forced to look carefully again at what many consider, excessive add-on charges that apply to airline tickets, including not one, but two departure taxes and the addition of VAT (Value Added Tax).
Just as the United Kingdom administration will have to review the imposition of the Advanced Passenger Duty (APD), if it has any hope of aiding the British airline industry into recovery, while their European counterparts currently impose either no, or lower taxes.
Destinations around the world are already putting measures in place that post lockdown, they can ‘bounce back’ and entice visitors once again. Take the Italian island of Sicily as an example, is offering half price flights, one in three hotel nights free and complimentary attraction tickets, to try and restore the critical British market. It is almost inevitable that every other major holiday spot will devise creative and alluring ways to help restore any sort of normality.
There also remains the touchy subject of ‘marketing or seat support’ to airlines or whatever name they are given, where various countries throughout the region pay enormous amounts of money to ensure particular airlines maintain a route.
Readers will recall St. Lucia’s reluctance to pay Virgin Atlantic an annual ‘subsidy’ of US$2.5 million to keep flying from England and as a consequence the carrier announced that it would terminate scheduled flights from June this year.
Will monies already paid over by Caribbean islands be credited to lost flights that are reinstated in the future?
At some point will we have to provide evidence we have taken one or more of Bill Gates’ vaccines in order to board a commercial flight? That would be a real stumbling block for me ever getting on a flight again. Of course I am considered by many to be a paranoid “conspiracy theorist”, so perhaps the bulk of the travelling public will just pipe up and say, “I, for one, welcome the new, undertested, rushed into production, Bill Gates financed, anti-Covid-19(84) DNA / RNA vaccine.”
See the following video, paying particular attention between timestamp 6:31 and 17:15
From the Youtube description:
The fact that Bill Gates has teamed up with the Department of Defense and DARPA, which is the special project research and development arm of the pentagon to develop a brand new type of vaccine, which is being rushed into production is alarming to say the least.
Especially considering this new kind of DNA / RNA vaccine would normally take 15-20 years to roll out, while this one is being rolled out in a matter of months and is already undergoing human clinical trials. The urgency and rolled back regulations to streamline this new vaccine is of course, justified by the crisis.
https://youtu.be/2MGXePjIzXE
I am considered by many to be a paranoid “conspiracy theorist”
“theorist”?? That is a nice way of putting it … 🙂
Have a great day Barbados
Best foot forward
Stay safe
Have a great day Barbados
There is a point where optimism tips over into self delusion. Adrian, you are well past that point.
@Peter
Adrian is not saying anything which differs with Edward Clark the head of the BPSA, Richard Branson, head of Jet Blue for the region and a few others.
@Adrian
“Government to ensure that air routes are restored as soon as safely possible”
Is this your idea of “BUILD IT AND THEY WILL COME”, you totally miss the point passengers routes and flights exist because there is a DEMAND requiring a SUPPLY. All government dies is REGULATE and TAX.
Your time would be better spent preparing BARBADOS TOURISM EPITAPH.
I predict that cruise ship companies will turn their use to transporting travelers to holiday destinations for land-based visits. Direct one-way regular sailings from port to port and back. . . . A transatlantic carrier can bring over 3000 visitors in social distance from each other and adequately disinfected spaces in a single four-day non-stop crossing. Cabin category and food consumption choices would allow cost differentials so as to accommodate luxury and budget travel.
Emirates have now introduced pre-flight blood tests for passengers. That means airlines and insurance companies will know more about an individual’s health than individuals do. Is this the post-CoVid world? Already cash is being squeezed out.
Everyone knows Tourism is on the floor … put there by a series of vicious blows from Kid Covid …. it will scamper onto its knees before the count of 10 but it will crawl around on the canvas for quite awhile before getting back on its feet and then it will be groggy for a number of rounds before the fight is over.
Assuming that we will “out smart” the rest of the region….or world…. for holiday travelers is an act of pure “self delusion”, as PLT said ….. we HAVE to face reality & diversify!!
Air Canada lost $1.05 billion in the first quarter of 2020, the company reported Monday, as the COVID-19 lockdowns and travel restrictions continue to devastate the global airline industry.
Rovinescu said the airline expects it will take three years to return to 2019 revenue and capacity levels.
https://ca.finance.yahoo.com/news/air-canada-earnings-q1-2020-131406903.html
@Hants
Thousands of planes are grounded owned by large companies with loans to pay. Rest assured the globalists will find a way to get those birds back in the air.
Did anybody notice the ‘Oracle’ as he is dubbed, bailed on the four major US carriers in which his 265,000/share stock had invested. Early reporting from the various “funds” shows a similar pattern.
True, there is the position that when certain people sell or buy you follow their lead.
Even as some US staff are still stranded on board its cruise ships Carnival is planning to resume service in August.
It does have friends in high places
https://www.cbsnews.com/news/carnival-cruise-resume-august-1/
Barbados has been receiving raving feedback from the cruise ship industry, will this translate in Barbados reaping economic benefit?
Only time will tell.
@Blogmaster 12.07
No. Location is location. Embarking ports too far away.
https://www.facebook.com/travis.harry.54/videos/10157015290451722/
LOL…@Northern had a long chat with a colleague on that this morn. Yep, a major statement from the ‘Oracle’.
But what are you suggesting re “Early reporting from the various “funds” shows a similar pattern”? Are yo speaking of of divestment in airlines specifically, other industries or generally by him?
He also still holds the mantra that (to paraphrase), if you liked it for its fundamentals when it was a high price then you can’t just dislike and sell now because the price has fallen… so clearly major fundamentals have changed!
You surely are paying attention to the bankruptcy filings taking place… to the pay cuts at the top; to VPs and other high flyers in various jobs leaving or being culled; to predictions that training divisions; large HR staffing departments and so on so forth are being reduced; to massive gov’t cuts proposed .
Some of these are chapter 11 reorganizations but some big names will still morph to chap. 7s or maybe forced mergers.
As cliched as it is to say … still repeat I will: unless there is a very viable remedy for cov19 the areas of finance, retail, education and every thing about life as we know it has changed drastically!
At his stage in investment life what motivates him these days? What is his risk appetite? We have to be careful, the Oracles shelf life may have expired.
Saba, St. Eustatius, St. Lucia, St. Vincent and Montserrat have began advertising, with an emphasis on attracting tourists from the region.
Bay Gardens in St. Lucia is offering something called a “Caribcation,” which has been designed exclusively for CARICOM island neighbours.
This is a positive start. What is left for governments to do is reduce taxes on airfares as an incentive for regional travel.
David
May 4, 2020 12:20 PM
At his stage in investment life what motivates him these days? What is his risk appetite? We have to be careful, the Oracles shelf life may have expired. Quote)
Is this investment wisdom? Is the Oracle of Omaha a one-man band?
@DIW
i refer to hedge funds et al bailing on investments in airlines AND those highly linked industries.
Onex, as one example, has both Westjet and BBAM, the latter has 500+ leased commercial aircraft. They did manage to exit movie theaters last fall.
David re “At his stage in investment life what motivates him these days? What is his risk appetite? We have to be careful, the Oracles shelf life may have expired.” SERIOUSLY, bro.
I may imagine that you will make quite personal decisions on the life of this SINGLE, PRIVATE enterprise when you head to the beyond which may see its closure… but are you for one moment suggesting that a man at the co-helm of a multi-billion PUBLICLY TRADED operation (at astronomical stock values) which manages the lives and livelihood of thousands of thousands could be so singularly personal in his company’s investment decisions!
You are jesting surely so I’ll leave that comment there.
And re your “Thousands of planes are grounded owned by large companies with loans to pay. Rest assured the globalists will find a way to get those birds back in the air.”
We all wish them luck with that…and with oil prices expected to stay n the doldrums for a while who knows what they can do…
NB:Major warfare is always an opportunity for globalists too ! Just saying … buts let’s hope they don’t turn down that path.
@Dee Word
Is the Oracle not a mere mortal?
Criuse liners still need people and after watching the Cruise industry COVID disasters one after another
No body would plan to sail abroad those ships knowing that Corona is still lurking
Not even for free
@NO
Yours@12.13pm
Normally that would be the case but if Barbados is seen as a friendly destination for the cruise line they could change the cruise from e.g. Miami to serve the location. A seven day cruise may well be reoriented as a ten day cruise passengers may get a couple more days at sea but some people wouldn’t care.
@Sarge
anything is possible. Right now, I haven’t heard of anybody who is eager to get on one. You? That is challenge #1. Once somebody is, the challenge will shift to the route. As an industry, their debt load isn’t pretty. Who knows how they will reconfigure and what emerges. Of all the ‘bets’ available, the cruise business seems one of the riskier ones.
@NO
According to the attached a Florida based travel agent said she has guinea pigs (sorry clients) who are anxious to start cruising again, perhaps Carnival is banking on those foolhardy types. It would be interesting to know the destinations and whether those countries would allow passengers to disembark.
BTW Coral Princess docked in Barbados on March 31 where a sick passenger was taken off, by the time it reached Miami on April 4 two passengers aboard had died and several more were sick with the virus and had to be hospitalized.
Did Barbados dodge a bullet? Perhaps but just wanted to show that the ship sailed direct from Bim to Miami.
https://www.cnbc.com/2020/05/04/coronavirus-carnival-cruise-line-says-it-will-sail-again-august-1.html
Virgin Atlantic to cut 3000 jobs and may stop flying out of Gatwick. In the meantime, Branson wants to raise £0.5bn. Wow!
@”David May 4, 2020 1:10 PM
@Dee Word
Is the Oracle not a mere mortal?”
Yes the Oracle is mortal, however his organization has what is known as positive return TRACK RECORD, which is not understood by Bajan mentality. Prudent investors pay attention to these ORACLES with a proven track record as their knowledge of finances is valuable oversight.
@Wily the Coyote
Touche!
On Tue, May 5, 2020 at 1:24 PM Barbados Underground wrote:
>
Since the topic is cruise ships, airlines etc, what about the effects on one of the islands larger private employers GEL? Their catering and ground handling business is centered around planes. They have expanded to catering to other land based institutions, and general events, however both are deeply cut in the current environment. Catering is GEL’s work and profit horse these days. Those profits allowed continued losses in some other businesses. Like many, their management will face some interesting choices.
@Northern, you like the blog master surely enjoy understated brevity! 🙂 Your statement “Like many, their management will face some interesting choices” says everything but of course you leave it quite open ended.
Not going to deeply repeat the obvious but GEL ‘like many’ as you allude to are going to have to reduce staff, cut salaries ( if the executives are rational and fair or shareholders will have to DEMAND it) and in simple terms generally move to a drastically ‘new normal’ of business break-even/profitability.
In a place like the US the significant uptick in gun purchases in recent months is a harbinger of problems and in Bim it will be a problem too (in the hands of those mischief makers)… a recent article reminded us that after the Spanish Flu that there was a massive surge over the following years in ‘nativism’ and the growth of extremists groups … cue to the aggressive protesters in US cities and officials demanding masks be worn being threatened (and one killed)… cue to the harsh immigration policies ALREADY in place by some and of course the harsh China bashing taking place… we are primed for blast off to unrest!
Thankfully it will not reach that stage here… but it will be bad on other fronts…with a deep economic malaise tensions will still get very inflamed … Bajans can go back to work that’s true but what work will that be?
How can we take out that big tourism revenue and expect that food vendors or butchers or mechanics and other fundamental aspect of life and business will survive if those who work in and with tourism have no income to do life basics!
What is normalcy ? Does anyone have any idea how distressing it will that at the mere sound of a cough we will angrily react to that person .. when a gun or knife is pulled on a ‘sneezer’ what then?
We are fixated on getting back to normalcy but frankly we have absolutely no freaking idea what that means … And as sure as night following day, we are going to hit a wall very hard when folks actually attempt to normalize their life and realize that they really CANNOT.
2023
@DIW
as I cannot compose as sweetly as you, I must rely on brevity?
And yes the wall approaches. To misquote WC, it is high, it is wide, and there will be little jumping over or going around. [i know u will inquire about under..lol]
One word is going to pop up again and again. Debt. and debt management. I hope we can avoid wide scale violence, though some authors seem to ‘hope for it’.
Marketing opportunity for Barbados ?
https://www.nationnews.com/nationnews/news/245380/trinis-thanks
Recent utterance from the MoT suggests some commenters on BU have not been to far from what the authorities are hoping for, a demand for staycations and intraregional travel until a COVID 19 vaccine is discovered.
Make Barbados Your Seconf Home.
@David
“… what the authorities are hoping for, a demand for staycations and intraregional travel…”
+++++++++++++++++++++
Unfortunately this strategy is hopelessly inadequate. Let me lead you through forex arithmetic in Barbados:
+ Tourism used to earn US$1 billion,
+ Offshore financial sector US$0.5 billion
+ Total of ALL our other exports (rum etc) US$0.25 billion.
COVID-19 will probably cut tourism forex earnings by 75% to 85% in 2020. Let us be really optimistic assume that the pandemic does no damage to either the offshore financial sector or to Barbados’s other exports even though the rest of the world is heading into the deepest depression since the 1930s.
The ‘authorities’ are asking us to imagine that staycations and intraregional travel can make a dent in a US$800 million deficit. This is ludicrous. The spending power in those categories in a good year does not amount to 3% of that total… and this is not a good year with unemployment across the region being between 20% and 30%. If local and regional travellers can scrape together as much as US$5 million to indulge in staycations and intraregional travel I will be impressed, but that is no more than a rounding error at the scale of the economic problem we face.
@Peter
Hopefully the minister has the benefit of good analysis to support his recent mouthing.
>
@David
“Hopefully the minister has the benefit of good analysis…”
++++++++++++++++++
The facts stubbornly remain the facts no matter how much “analysis” you try to spin them with. His mouthing has nothing to do with economics, it is entirely based in the psychology of appearing to do something… anything… the obscure the fact that he does not seem to know what to do.
One of the fundamental characteristics of a good manager is that s/he will honestly admit to not having good enough answers and will ask for help in finding better answers.
@Peter
Well Peter if what you say is true it does not inspire confidence in an expectant public. This is an unprecedented moment in time, our political leaders insult us by taking us for granted with specious mouthings.
>
@David
It has always been thus. We get the government we deserve. It is up to us to do the work required as citizens so that we deserve and achieve better.
What I say can be fact checked by anyone with a connection to the Internet. I used Central Bank figures for the most part from http://www.centralbank.org.bb/news/article/9165/tourism-is-our-business
If I have made any errors I hope people will point them out to me because for the sake of Barbados I would love to be proven wrong.
Less than one week ago, the Min of Tourism said that he expects some action in eight months. The Head of the major regional tourism body said that we have been set back twenty five years. The columnist writing this piece recommends policies that were executed for almost forty years. The Min of Tourism now says that he doesn’t expect any movement before a COVID-19 vaccine is found. That’s about eighteen months.
No wonder we can’t follow the leaders and entrepreneurs in this industry.
I’ll take my chances with Butch and Sandals – not these jokers!!!
What is different about Sandals in a COVID environment? It is on life support with all the others.
Saw a Sandals Ad on Canadin Tv saying they are ready and waiting.
Reality or fiction, you decide…
leading economists, expects a recession and almost every Caribbean economy to contract causing Governments to have to become more important as drivers of economic activity, needing to come together to find common regional economic solutions involving support from the IMF and others. Tourism activity and the businesses which depend even partly on tourists will not see their levels of revenue recover for years to come”.
Addressing all these and other issues will require much thought, joined up local and regional responses, a high degree of realism about how Caribbean tourism markets will reopen, and most likely fierce global competition as all nations see visitors as a means to rapidly power future economic growth.
Just as importantly, the crisis facing the sector offers an opportunity to governments and international financial institutions to think long and hard about how to rebalance Caribbean economies, so that the region in the longer term is much less reliant on the fortunes of a single sector.
Sandals Underwater Hotel project selected for Barbados west-coast will compete with St. Lucia’s Lover’s Deep Submarine experience.
Created by British travel company Oliver’s Travel, “Lovers Deep” is a bookable submarine for couples who want to spend a romantic night under the sea—complete with a double bedroom with ocean views and a spacious (at least for a submarine) two-person bathroom. Even more impressive: Guests get to choose exactly where their time on the submarine is spent. “Lovers Deep has the unique capability of being moored at a location chosen by the customer, whether that be a stunning coral reef off the coast of St. Lucia or a sunken battleship in the Red Sea,” according to the Oliver’s Travel website. The company will also change up the interior design based on each couple’s specifications. Needless to say, accommodations this original don’t come cheap.
Price per night: From $230,000
Sleeping with the fish doesn’t come cheap. Underwater Hotel suites are Pricey…
If this project becomes reality, will be an added tourist attraction for Barbados????
@PLT
your numbers are accurate based on Dr.W statement, which I have no reason to doubt.
It was a ‘sound bite’, A poor one.
@NorthernObserver
You are correct; “It was a ‘sound bite’, A poor one.”
The article in today’s Nation makes it reasonably clear that Minister Symmonds has no expectation that staycations or regional tourism will make any significant contribution to slowing the death of the tourism industry. He is counting instead on a COVID-19 vaccine and sector reform that integrates tourism with agricultural, sporting and cultural industries.
I am happy to note that the Minister does not appear to be as delusional as those earlier media reports suggested.
According to multiple media sources SANDALS (including Barbados) will re-open on 4th June.
DavidMay 5, 2020 9:09 PM
“What is different about Sandals in a COVID environment? It is on life support with all the others.“
The statement was not about COVID and we all know every thing on the planet is affected by COVID-19.
I meant that when it comes to Tourism and the industry in general, I will take my chances in backing or at least listening to what Sandals have to say rather than listen to jokers . Whomever the cap fits.
@William
It is true Sandals has developed a known brand. Governments have had to to pay a high price to be selected as a Sandals destination. We have had this discussion.
Some will argue Butch can only sustain the brand from the largesse he has and continue to receive from governments.
The elephant in the room is that Barbados is small and not alone. The quality of life will be decline for most people in most countries, BUT NOT FOR ALL !! There are enough high worth people out there that will want to get away from the consequences of recession on their families. They are not the displaced employee class – and they are not employers with responsibilities either. They just want to live out their lves in a convivial place, and they can afford it. Many of them are nationals or currently live in regional countries. It’s a larger demographic than we can even handle, but THAT’S THE MARKET WE MUST PURSUE vigourously !!
Source: Nation news