April 10, 2021

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Historic collapse of tourism | government

“It has been extremely difficult to see how everything we achieved disappeared overnight… This is the worst crisis that the tourism sector has faced in its modern history.”

With these words and a broken voice , the executive director of the Puerto Rico Tourism Company (CTPR), Carla Campos, described to EL VOCERO the hard blow that the coronavirus has inflicted on the local tourism industry, which collapsed after having reached a record growth in the past three years.

In January 2017 and after 15 years working abroad, Campos returned to the island with the task of managing the impact that the Zika outbreak had on tourist activity, but never he imagined the series of situations that would arise in subsequent years and that would mark his passage through the CTPR.

“My main challenge was the management of Zika, which had had a disastrous impact. By July and August we were seeing record performance. Then the hurricanes came, but tourism came back to life in an agile way. We passed the protests and managed to stabilize the sector. Even after the earthquakes we were seeing a positive trend, "said the official.

Despite the crises faced prior to the spread of the coronavirus, Campos managed to stabilize tourism after regaining the confidence of the private sector, increasing the number of international flights and the arrival of cruise ships, which had a positive impact on the number of visitors, hotel occupancy and collections.

Last year, local tourism registered figures never seen before, but the Covid-19 pandemic halted the positive trend that Campos estimated that it would extend throughout 2020. 2019 closed with the arrival of 5,236,000 visitors and the total economic impact amounted to $ 9.460 million.

$ 270 million in losses

The director of the CTPR admits that the crisis generated by the coronavirus is severe and unprecedented. Until last July, the direct impact on tourism exceeded $ 270 million compared to the same period last year. Of the losses, more than $ 57 million correspond to the cancellation of 162 cruise stops that would have brought 514,000 visitors to Puerto Rico.

“This is only the direct impact on tourism. When indirect losses are added, the figure is significantly higher. Farmers, restaurants, transporters, operators, excursions, artisans are affected … it is not only hotels and cruises ”, pointed out Campos.

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Carla Campos, executive director of the CTPR.

In terms of employment, the executive indicated that the industry has permanently and temporarily lost 25% of the 77,500 people it employed. "The projection at the moment is that we have over 19,000 unemployed people in the sector and we are preparing so that 35% or approximately 6,700 jobs are not resumed until the second quarter of 2021," he commented.

The negative streak will continue

Campos explained that the industry will continue to register significant declines in the coming months. "September and October tend to be the lowest season, which means that – if it is traditionally the season with the lowest income – the current situation is going to get worse," he pointed out.

"In the best of cases, if it is that at the beginning of September the sanitary conditions allow us to be able to reactivate the sector, from August to December we estimate that 53% less will be registered in the fourth nights and a 60% decrease in the income of the fourth nights sold ”, added Campos .

The executive explained that they foresee a 20-month recovery, but emphasized that this will depend on how the trend of infections with Covid-19 behaves on the Island. “We anticipate that the recovery will be 20 months from now, more or less for April 2022. But there is a lot of uncertainty ", he emphasized.

However, Campos stressed that the capacity of the tourism sector to recover has been demonstrated and he trusts that – once contagions are controlled – the sector will be able to to emerge quickly. In fact, this was exactly what happened with the failed reopening at the end of May.

After hotel occupancy reached a minimum of 4.8% in April, the figure rose to over 30% with the opening . Puerto Rico led the tourist recovery in the United States, but after the increase in infections, the demand fell again by 48% by the end of July.

Layoffs and closings of lodgings

Pese To the $ 50 million in federal funds that the industry received to alleviate the economic impact that the virus has had, Campos does not rule out that some hotels endorsed by the CTPR cannot withstand the greater blow that is expected and are forced to cease operations permanently.

“In recent months, inns have closed to reduce operating expenses. Currently 42 of the 160 endorsed hotels are unavailable and that represents 2,800 fewer rooms in inventory. Unfortunately, we anticipate that many will have to close permanently, leaving a significant number of people unemployed, "said the executive.

" My focus is on being able to handle this situation in the best possible way. Many jobs are at risk and many families depend entirely on this industry. Many businesses are about to close permanently and many hotels are about to surrender to the bank because they cannot pay their loans, "he added.

Better public policy

Despite the difficult outlook, Campos pointed out that "tourism will be key in the economic recovery of the Island", for which he urged that the most efficient public policy be established that allows placing this industry in an advantageous position and that strengthens the institution in charge of promote its development.

“The weight that the tourism sector has on our economy cannot be underestimated because perhaps it contributes less than other sectors to our Gross Domestic Product (GDP). That does not consider the indirect effect it has. We occupy 7% of GDP, but we generate more employment than manufacturing, which occupies 46% ”, he stated.

"Whoever is elected as governor, it will be interesting to see – in the midst of this global crisis – what are the economic development proposals for tourism if we want it to be the north of the economy in the future," Campos pointed out.

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