Traditionally, the Tobago economy has been heavily dependent on tourism. Over the years, however, this has been changing as international arrivals to the island have decreased significantly. From 26,185 in 2014, total air arrivals, according to the Ministry of Tourism website, has dropped by 18% to 21,457 in 2019.
This drop, exacerbated by the Coronavirus impact, has had an adverse effect on the Tobago economy, and it was no surprise that, in the 2021 Tobago House of Assembly (THA) budget, it was revealed that the economy is predicted to decline in 2021 especially the “…tourism, manufacturing and financial sectors with moderate growth in the agriculture sector.” It was also revealed that the THA accounts for 44% of the total GDP on the island and it employs almost 66% of the total workforce.
Nevertheless, there are encouraging signs in the sector as Comfort Inn and Suites has a hotel under construction in Scarborough in a joint venture with Choice Hotels and local ownership – and partially funded through the THA Venture Capital Equity Fund Limited. According to the information provided, the hotel will showcase 74 guestrooms in the Shaw Park area. In addition, to increase international arrivals, the THA has negotiated a weekly flight from Canada with Sunwing Airlines.
The success of these measures will be severely tested by the ongoing Covid-19 pandemic which is forecasted to have a significant adverse effect on the tourism industry worldwide especially bearing in mind the current uncertainty in the airline industry. The future of the Tobago economy and by extension the real estate market in Tobago can therefore be expected to remain uncertain until a new global “normal” is established post-pandemic.
To get a feel for what is happening on the ground in Tobago, we sat down with well-known real estate agent Dawn Glaisher, owner of SeaJade Investments and Honorary Secretary and Director of the Association of Real Estate Agents. We asked her opinion on the following:
- What impact the COVID-19 pandemic has had so far on the drivers of the economy, the hotels, guesthouses, and restaurants on the island?
- How that has impacted property prices?
Ms. Glaisher began by saying that any assessment of the status of the real estate market
at this time must be set in the context of the global economic situation, and more immediately, of local conditions and variations on this theme.
According to the Central Bank of Trinidad and Tobago (CBTT) in its Monetary Policy Announcement in June 2020, “The macroeconomic policy environment across the globe can best be described as intense and uncertain, constrained for the most part by the fiscal space available to governments”.
The final phrase in bold is a clue I believe to what pertains to T&T given the global shrinkage of -5% more or less and given the fact that prior to the arrival of the coronavirus impact on T&T, the country was already in deep recession (the decline in oil and gas revenue, government borrowing to the tune of some $70 billion, and the $1.1 billion drawdown from the Heritage and Stabilisation Fund).
The Covid-19 crisis has hit our business communities hard, as it has done everywhere else in the world. Even the banks are now worrying about what happens next, given the fact that businesses are not able to open back fully or at all and rents are coming due this month.
Interest is due to be paid again from this month. Jobs are not there to go back to in many cases, so where are August salaries coming from?