Many Caribbean economies find themselves already in a difficult situation with low growth, high debt, fiscal deficits, and low domestic private sector investments. Because of the current developments around the spread of the novel coronavirus around the world, economies worldwide will be dealing with an unforeseen shock. While the action is taken to contain and mitigate the outbreak, a global recession is likely, and the Caribbean will also be affected. Global recessions are known to have an impact over a two-year period. Now is the time to be prepared for what comes thereafter.
January 23, 2020 - Caribbean Travel Marketplace: “The record-breaking feats made by the Caribbean in 2019 are expected to continue into 2020, the Caribbean’s two major tourism advocacy organizations, the Caribbean Hotel and Tourism Association (CHTA) and the Caribbean Tourism Organisation (CTO), have predicted,” a media report reads.
Yet, predictions don't always square with reality. Now, about two months later, one would consider these statements to be euphoric and one would tend to believe to have been in the wrong film. It is hard to believe in another boom year; on the contrary, a looming recession is more likely with all its consequences for the island economies, but especially the communities. Someone who still preaches “Don’t worry everything will be alright” is not realistic. Surrealism is an art form and not a form of socio-economic development. Whenever these kinds of comforting phrases are used, they should be placed under the sub-category “Social work in the economy”.
The greatest peril for any government, organization, business and its executives is: “Not knowing, what you don’t know!” Does that sound crazy? It isn’t! Let me explain. If you know what you don’t know, you shop for it and get the information somewhere, then update it, and act accordingly. If you don’t know what you don’t know, it means that something is developing beyond your horizon or radar screen that may have an impact on you sooner or later. You may be in danger of losing control or subject to taking fatalities into account. But, not knowing what you don’t know could also be rephrased into “You don’t know what you’re missing, or you don’t know what’s ahead!” Explore dangers as well as opportunities.
By now, we are probably agreeing that we live in a time of uncertainty. What is the problem that really may affect us? It is not the infamous virus outbreak! It causes a chain reaction and a crack in the image. What part of the chain reaction may affect us? At this time, we already need to look ahead and beyond what is happening in the next months or even next year.
Source markets and consumers will make adjustments to their situation over the coming months. Where these adjustments have worked, they’re not likely to change in the future. The ways of looking at expenditures and travel behavior may change. One must be ready to respond to the market and the best way is to offer a new concept, new products or services that differ from what was offered before the downturn situation. Patterns of consumer behavior of tourism and travel clientele abroad will change. Don’t try sidetracking by “yes, but...” or “well, oh…”. What solutions will we come up with? Are we able to respond well to changes in market behavior?
Are the Caribbean economy models aging? Yes, in a combination of probabilistic aging and proximal aging. Please don’t let me get into explaining what that means, just trust me. It does sound quite bad, doesn’t it? Rejuvenation is what is needed, and it should result in youthful vigor and appearance. Rejuvenation is a repair of damage that is associated with aging or replacement of damaged components with new components. Refreshment and innovations are needed in the economy and its prevailing industry, tourism. Actually, rejuvenation is more about how we do things throughout the industry including transportation, travel, and hospitality.
We are all somehow in the business of making money, benefits, profit, salary, etc. Did you know that the pay-off of innovation is the highest where the uncertainty is the highest? Isn’t that great to hear in a time of uncertainty? Innovation has been defined as “Change that creates a new dimension of performance.” I’ll subscribe to that. Dare to think differently about the economy and business can be changed. How things can be done smarter. Daring to think beyond the conventional way of thought is part of the recipe. Change is better than more of the same. However, the common belief is still that if something merely smells new it should be called innovation. In some cases that would imply that changing underwear is an innovation.
Here is something to think about and it is not even an innovation: The biggest market for the Caribbean might be the Caribbean itself.
By Cdr. Bud Slabbaert