UN study says tourism-rich small island states like BVI could see massive GDP fallout from COVID
A new United Nations study has shown that Small-Island Developing States (SIDS) like the BVI, that rely heavily on tourism, could experience a staggering dip in their overall Gross Domestic Product (GDP) due to impacts from the COVID-19 pandemic.
The study, which was published by the United Nations Conference on Trade & Development on July 1, found that the interconnectedness of tourism to other sectors such as health, financial, construction, trade, air transport and communication will result in a multiplier effect throughout the economy.
“Intersectoral linkages worsen the impact of a decline in tourism. A fall in tourist arrivals has a negative impact on the suppliers to hotels, food and recreational activities. The more connected the sector is, the stronger the impact of a negative shock in the tourism industry,” the report said.
“Findings show that the losses in GDP are approximately two to three times higher. As a result, a $1 million loss in international tourist revenue can lead to a fall in national income of $2-3 million. It is these intersectoral linkages and corresponding losses which lead to the large indirect losses when the tourism sector contracts.”
To put that into perspective, the latest known reported figures on local tourism shows that visitors spent an estimated $484 million in the territory in 2016. This is equivalent to 52 percent of the BVI’s GDP.
SIDS vulnerable due to characteristics
The UN, in the meantime, further said that due to the common characteristics of SIDS, it puts SIDS like the BVI in a more vulnerable position, since they have limited alternative options available to generate revenue from.
These characteristics include small domestic markets, a low degree of export diversification and remoteness.
“As a result, these economies are highly vulnerable to external shocks and thus, are among the most impacted by COVID-19. It is anticipated that the economic blow to SIDS will result in record amounts of revenue losses without the alternative sources of foreign exchange revenues necessary to service external debt and pay for imports,” the report explained.
The World Travel and Tourism Council anticipates that the international tourism sector will likely return to pre-pandemic levels within 19 months.
Tourism is one of two major economic pillars for the BVI. It directly accounts for one in every four jobs. The other pillar is the financial services sector.
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Thank you captain obvious.
What a useless study.
The UN is also a going to fund the following studies:
(1) is water wet
(2) does fire burn
(3) does night follow day
(4) what value did the Govt get from the consultancy agreements with the Overspend
(5) is football played with a ball or a foot
(6) are circles round
(7) is the earth flat
(8) does a flight of stairs go up or down
(9) can fish swim
do not know where they get their figures but $484million is very low
USVI seem to be doing ok with open borders. maybe we take a look at them and get things moving forward!
Flights from U.S states are landing in USVI so persons can travel for vacation as they are considered domestic travel.
Unlike us, our domestic travel is between Anegada, Tortola, JVD and Virgin Gorda and we are being offered some exorbitant staycations
Hmmm really USVI has 27 active cases and still waiting on pending test results.
You have no idea how many active cases there are in the BVI. THERE IS NO TESTING!! How would you know? Get a grip there are cases, there will be cases and keeping the Territory closed does absolutely nothing.
You have been sheltered in place, without realizing the benefit, while the world burns around you. Take a moment and give thanks for quick action, cool heads and cautious approaches. It may not be the best situation. But we are safe, living a relatively normal people distance (for these times) and worrying less about our daily health regime than most of the world.
Most all the active cases in the USVI, are in St Croix, and are locals, not tourists.
It seems many of the locals had a hard time social distancing in the St Croix bars, when they opened back up.
Wrong most of those new cases in the USVI are from the workers that are coming in to work at the oil facility at limetree bay. Its not the locals.
We need a study to tell us that if our borders remain closed and Government continue to behave foolishly we are all doomed? 3 months into the COVID crisis and most unemployed got ZERO help, most struggling businesses, ZERO help.
These guys must be Sherlock Holmes. Like no one would have figured that lol
Wasting money on a study? Or easily presenting facts to signal those wishing to take advantage of this country?
No need for Sherlock Holmes to figure this out,Larry Holmes could easily have done it instead.
The Easton Assassin was a very smart man. I loved his style.
worst yet is there is no direction on when we will be open for tourism. 9/1? Who knows –its not official. Many other island are opening and have a plan. Typical BVI has no plan. Just keeps sending out Instagram posts from tourism board without any information. Who the hell will plan a trip to BVI? Tourists will spend money elsewhere. And if we are hoping for a rebound in 2021 then they need to announce when/if they plan to reopen. No one is booking if things remain uncertain.
This is very true. I personally had to reschedule a BVI 2 week vacation that I had originally scheduled for May. I rescheduled to October, but just cancelled and booked St John instead. Not what I wanted to do, but all of the uncertainty… Also, I totally get what the BVI is going thru with tourism. I live in a small Colorado mountain tourist town and we struggled with the same issues. We reopened in May with sensible precautions and have seen zero new cases.
The worst part of this mess is that government has increased spending while faced with decreasing income. Businesses which want to stay viable have had to decrease spending and the government will have to do the same. Tourism may never return to 2019 levels, at least not anytime soon. What tourists we will have will only start to make plans and we can start taking deposits, badly needed for cash flow, when government sets a date for re-opening. Please set a date!!
The Caricom region, including the VI, is one of the most travel and trade dependent region in the world, as well as being a disaster-prone region and relatively resource-poor. Tourism is the primary economy in most Caricom countries. Covid-19, a global pandemic, is the most destabilizing event to hit the region since WWII.
Consequently, it has devastated travel world wide and thus tourism, the primary economy in the region. It has shut down tourism in the VI, resulting in a significant rise unemployment. As noted in the commentary, there is a direct and interconnecting link between tourism and other sectors. Thus, there is little surprise that GDP will be severely impacted by the downturn in tourism.
Moreover, though Covid-19 has hit the VI economy hard, the economy was showing fissures before Covid-19. Nonetheless, Covid-19 has exposed and laid bare the structural weaknesses in the economy. The virus has highlighted the importance of having a diversified economy. The VI with its small size, small population(but growing), limited resources, limited opportunities for economies of scale and scope,.disaster-prone, excessive dependence on trade, limited economic sectors, limited domestic control on economy, heavy dependence on government, fragile environment, susceptibility to external shocks …etc must reimagine life after Civid-19.
If the BVI survived IRMA and MARIA, it will survive COVID
The BVI was opened for business 2 months after Irma and within 6 months most had electricity back and businesses were moving along. Further, many of us had access to insurance proceeds and construction was booming. We are going into 4 months of COVID economic destruction with no end in sight. If you think IrMaria was anything compared to Covid, think again!!!
The BVI received millions in aid, from all across the world, after Irma. Thanks to Covid19, those pockets are now empty.
Irma and Maria will seem like a walk in the park. No comparison whatsoever. This COVID is prolonged and an unseen evil. Numerous effects yet to be calculated.
No sh t!!!! It takes the United Nations to tell us that!!!,,three years later
Am stick to my stomach with these news sites putting up headlines that are not news worthy. We have an active hurricane predicted and a tropical wave passing today with really heavy winds from what I just experienced at the west end area, yet nothing from no news sites on this but we continue to bring PISS to our readers as news!
Why is there no plan to reopen? Is the government that incompetent? Put the pencil to the paper and put a plan in place! St John and St Thomas have all kinds of bookings !
yes the ate rubbish
We aiñt worried, we going independent and eating grass when it rain
We are stuck between a rock and a hard place. Our strategy along with some other islands in the Caribbean has been to achieve virus elimination. And its worked but at massive cost to tourism. A similar approach has been taken by China and Hong Kong. But the US and much of LATAM has let COVID rip through the whole country. Even with all of its resources, the US health system has been overwhelmed at times and there is zero chance of eliminating COVID in the region any time soon. Given proximity to US, if the BVI borders open in any meaningful way this year (or even first half of 2021) COVID will come into the territory and we risk being overwhelmed. We face a difficult choice: absolute certain destruction of tourism and the economic hardship which follows or risk of COVID overwhelming the health system and premature deaths of loved ones. Don’t envy the politicians one bit.