Over 580 companies participate in SHTA COVID-19 economic impact survey
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Over 580 companies participate in SHTA COVID-19 economic impact survey

SINT MAARTEN (PHILIPSBURG) - Over 580 companies, approximately 20% of the total count of operational business supporting over 8000 employees, submitted entries to Business Survey conducted by the SHTA from Thursday, March 26th until Sunday March 29th.   The results are clear, acute job loss, lack of income for households and long-lasting economic decline if swift measures are not taken to mitigate financial impact of the world-wide pandemic.

The effects of this pandemic are not only causing a world-wide health crisis but also a financial one. There have already been more than 3 million people laid off in the United States, thus impacting our largest segment of visitors, the cruise industry has taken a major hit with recommendations from major countries against traveling via Cruise. Essentially, we do not know when demand for travel will resume and whether we will be able to be in the forefront of it.   These are examples of the influencers of St. Maarten’s economy and some of the challenges we will have to face together in climbing out of it.

Given that travel and tourism are disrupted business sectors; and demand has dried up, it means it will not rebound as soon as curfews are lifted, St. Maarten will have to reinvent itself in the face of a changing Tourism, without knowing how it will change.   To alleviate short-term unemployment, which is inevitable with only very few types of businesses allowed to operate and earn turnover; the Sint Maarten Hospitality and Trade Association (SHTA) has proposed a reduction in the TOT tariff to 0% and a 90% payroll subsidy to all sectors. This proposal is endorsed by the St. Maarten Timeshare Association, the St. Maarten Marine Trades Association and The Indian Merchants Association and the Labor Union WIFOL.   The proposal, while may seem high, is aimed at keeping businesses alive, and employees paid.

The survey, unfortunately, echoes our concern that the prolonged effect of this pandemic, will force businesses to close and staff to be laid off. Most businesses have been struggling to rebuild both physically and their reserves since the passing of Hurricane Irma; and frankly do not have the necessary resources, to weather prolonged closure. The business landscape will likely be very different this time next year, and perhaps we will no longer be known as the Culinary Capital of the Caribbean.

The results of the survey, worryingly indicate, that within 3 to 6 months 45% (under the best-case scenario) of the labor force of private sector will be laid off. If this data reflects the reality, extrapolation to all active businesses, would mean the total number of unemployed could grow to well over 9,000, not including new graduates entering the labor force. That means that we should also anticipate a retraction in the total number of businesses able to survive post-pandemic. Like Irma, this is a non-discriminatory event, unlike Irma, it is world-wide; so, our normally strong tourist base of visitors will also be severely impacted. It is imperative that all parties find a solution for reducing the effects of this formidable challenge Sint Maarten is facing. It does not just impact the private sector, the value of tax revenues collected will also dwindle with reduced private sector jobs; in fact turnover and room tax are already nearly at 0% with only a few businesses remaining open and generating Turnover or Room Tax.

In 72 hours, over 580 companies responded. SHTA thanks the involved associations, as well as many independent entrepreneurs and NGOs for supporting the enquiry and sharing vital information. With the vast number of participants in the survey, across all business sectors, it is safe to say that no one will be left unharmed. Continued lack of financial assistance or a clear indication of what to expect would result in layoffs happening even sooner.

Again, the SHTA advocates that maintaining job and income certainty for the St Maarten private sector employees is key to maintaining our households as well as our businesses. Though the amount might seem high, SHTA points out that other countries, including Holland have already announced comparable subsidies to save their economies and businesses.   Thus far, no comprehensive plan addressing the acute crisis has addressed the various fallouts as the suggestion outlined above; and many people still believe that all we have to do is open our borders again for the tourists to return. 

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