Jamaican Hotels Facing Bankruptcy; Locals Call for Cheaper Prices

Sheri-Kae McLeod CNW Reporter

photo via booking.com

Months after Jamaica reopened its borders to tourists and visitors from all over the world began trickling in, many hotels are still fighting to stay open, with some even on the brink of bankruptcy.

When Jamaican reopened its borders to international travel on June 15, it seemed as if the industry was well on its was to rebuilding, reporting more than 35,000 visitors just one month after the official reopening. But the Jamaica Hotel and Tourist Association (JHTA) says months later and the tourism industry is still in trouble.

Immediate JHTA past president, Omar Robinson, admitted that hotels have been burning cash by keeping their properties open with occupancy levels as low as 10 per cent.

Speaking at the association’s annual general meeting (AGM) last Friday, Robinson said, “the burn rate of cash during this period (COVID-19) is immense and underscores the appeal we have been making for the urgent help for working capital to support the sector.”

According to Robinson, “Hotels are very grateful to the Government for the reopening of the country since June 15, 2020, which has allowed some of our JHTA members to resume operations but make no mistake, hotels reopening and running at 10-30 per cent of occupancy cannot be interpreted as a return of these businesses to profitability.”

Extremely low occupancy at hotels means that not all tourism workers are being employed. While employees sit at home, some with no re-employment prospects for the foreseeable future, it means that hotels will have to make mass redundancy payouts, which could push them into bankruptcy.

Earlier this year, the JHTA had proposed a 90-day extension to the four-month layoff period, which would buy the hotels time to get back on their feet, but trade unions had rejected the proposal.

Interestingly, the United States election has also affected tourism activity in Jamaica. Robinson said that during an election year in the US, which is Jamaica’s main market, travel activity is traditionally lower than normal, but this year, the 2020 election coupled with the ongoing COVID-19 pandemic has dealt a harsh blow to the tourism industry in Jamaica.

To combat this, many Jamaicans have called for hotels to lower their rates for Jamaican residents so they too can contribute to the industry.

“hotels are a thing of the past. Sir…drop.the rates so Jamaicans can enjoy too. Foreigners want a different type of tourism, not catered to by all inclusive concrete jungles,” said one comment on social media.

Another person said, “They need to pivot. Partner with @GustazosJamaica and encourage residents to stay with them. Get creative.” while another comment read, “If only there was a strong support for a local & regional tourism market for the hoteliers that would have helped said market.”

The reality is the average Jamaican, even before the COVID-19 pandemic, could not afford to spend USD $250 (roughly JMD $35,000) at a hotel for two nights. And so, traditionally, hotels have marketed to those living overseas, while residents, especially those of the average working-class, have been left on the back-burner or completely missed out on the island’s hotel experience.

But COVID-19 has presented a unique opportunity for hoteliers to encourage more locals to enjoy a “stay-cation”, while they help to rebuild an industry that the country is so disproportionately dependent on.

 

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