Publication Date: 3 June 2020 | Coverage Period: 3 May – 2 June 2020
Morning Briefing
- Atlantic hurricane season officially opens June 1 — forecasters predict an above-average season, compounding the pandemic crisis already gripping the region
- Caribbean hotel sector reports near-total closure: Jamaica’s Tourism Minister confirms fewer than 5% of registered hotels are operating; Barbados, St Lucia and Antigua effectively at zero
- Unemployment in Caribbean tourism-dependent economies estimated at 30–50% as hospitality sector remains shut; food security concerns intensifying in smaller islands
- Barbados PM Mottley’s government extends and expands wage support programme; praised by IMF as model response for small island developing states
- Dominican Republic begins planning phased border reopening for July, positioning itself as first major Caribbean destination to re-welcome tourists
- Caribbean mortgage markets: deferrals widespread; no significant foreclosure activity — but lenders warn deferrals cannot be indefinitely extended
The Depth of the Crisis: Two Months Without Tourism
As the Caribbean enters June 2020 with its borders still largely closed and its hotels still largely shuttered, the economic damage from two consecutive months of near-zero tourism activity is becoming clearer in the data. Regional economic institutions now estimate that Caribbean GDP in 2020 will contract by between 10% and 18% for the most tourism-dependent nations — figures without precedent in the post-independence era. The Eastern Caribbean Currency Union, whose member states rely overwhelmingly on visitor arrivals, is forecasting a regional contraction of approximately 16%, which would be among the most severe in the world.
The hotel sector — the largest formal employer in most island economies — is effectively dormant. In Jamaica, Tourism Minister Edmund Bartlett has confirmed that the vast majority of hotels remain closed, with those few that are open operating at minimal capacity for returning nationals or essential workers. All-inclusive resorts that form the backbone of Jamaica’s, Barbados’s, and the Dominican Republic’s international appeal have no guests and, in most cases, have furloughed or dismissed the majority of their staff. The hospitality supply chain — food and beverage suppliers, linen services, tour operators, craft vendors — is also idle.
The informal economy, which accounts for a substantial share of economic activity across the Caribbean, is invisible in official statistics but is experiencing equally severe disruption. Informal vendors, independent tour guides, beach operators, and transportation providers have no access to formal wage support programmes and are heavily dependent on remittances from family abroad and community networks. Caribbean diaspora remittances — a critical financial lifeline — are themselves declining as diaspora communities in North America and the UK face their own pandemic-related unemployment.
Government Support Packages: Racing Against Social Collapse
Caribbean governments have deployed emergency fiscal measures at an unprecedented pace. Jamaica’s CARE programme has transferred hundreds of millions of Jamaican dollars to displaced workers, with the government drawing on a combination of domestic borrowing, Budget reallocation, and bilateral grant support. The Bank of Jamaica reduced its policy rate, contributing to a loosening of monetary conditions that has helped keep mortgage financing accessible for those still employed. The NHT’s mortgage deferral programme has processed tens of thousands of applications.
Barbados’s response, coordinated by PM Mottley, has been particularly comprehensive. The government extended its wage support scheme — covering a substantial proportion of displaced hospitality workers — while simultaneously negotiating with international creditors to ensure debt service obligations did not crowd out emergency spending. The IMF has publicly praised Barbados’s response as an example of effective small state crisis management. Rent relief measures, moratoriums on utility disconnections, and expanded social protection spending have cushioned the immediate social impact.
The Dominican Republic has taken a different approach, leveraging its larger economy to deploy a RD$100 billion economic plan — approximately US$1.7 billion — encompassing direct household transfers, business liquidity support, and infrastructure spending. The DR’s relative economic diversification — with a larger manufacturing and services base than most Caribbean peers — provides greater fiscal room to manoeuvre. Crucially, the government has signalled its intention to begin reopening borders to international tourists in July, betting that a cautious, protocol-driven reopening can begin restoring tourism revenue before the end of the summer.
Property Market: Deferrals Holding the Line
The Caribbean property market continues to operate in suspended animation, with mortgage deferrals preventing the forced sales that would create downward price pressure. Real estate agents report near-zero transaction activity for a third consecutive month, though there are growing reports of serious online enquiries from diaspora buyers and international investors who see the current period as a window to research acquisitions for completion once travel resumes.
Lenders across the region are beginning to signal that mortgage deferral periods — initially offered for 90 days — may need to be extended. Barbados’s Central Bank and Jamaica’s financial regulator have both indicated willingness to work with lenders on extended relief frameworks, recognising that a tourism industry shutdown that began in late March cannot be resolved within a standard 90-day moratorium window. This flexibility is critical for the property market’s structural integrity.
The luxury short-term rental market is navigating the crisis with varying degrees of success. Properties with owner capital reserves and no mortgage pressure are sitting out the closure period and will be well-positioned for recovery. Properties with high leverage and operating cost structures built around continuous occupancy are under greater stress. Property managers report working with owners on cost minimisation strategies, including reduced maintenance schedules and energy management, to preserve capital through the extended shutdown.
Caribbean Leaders This Month
Barbados PM Mia Mottley earned international recognition this month as the IMF explicitly cited Barbados’s pandemic response as a model for small island developing states. Her combination of comprehensive wage support, utility moratoriums, and proactive creditor engagement has maintained social stability in an economy that was already under structural adjustment pressure before the pandemic.
Dominican Republic Planning Minister Juan Ariel Jiménez presented the government’s phased reopening plan for tourism, which proposes border reopening from July 1 with mandatory COVID testing for arriving visitors. If executed effectively, the DR will have a significant first-mover advantage over Caribbean competitors in recapturing summer visitors.
Jamaica Tourism Minister Edmund Bartlett has been consulting with health authorities and hotel operators on a reopening framework that would allow Jamaica to follow the Dominican Republic’s lead, potentially targeting a July 1 border reopening with testing protocols. The Jamaica Hotel and Tourist Association is working with the government on industry readiness standards.
T&T Finance Minister Colm Imbert presented a mid-year budget review that acknowledged the full scale of the fiscal emergency facing the twin-island republic, with both energy revenues and tourism receipts severely reduced. The government’s ability to draw on the Heritage and Stabilisation Fund remains critical to maintaining public services.
Guyana President Irfaan Ali confirmed that ExxonMobil’s Liza Phase 1 operations are continuing and that oil production is gradually ramping up even amid the global price downturn. The long-term revenue projections for Guyana’s oil sector, while delayed by lower prices, remain intact as a transformative economic force over the coming decade.
OECS Director General Dr Didacus Jules convened virtual summits of Eastern Caribbean heads of government to coordinate pandemic response and begin planning for the reopening of tourism — the economic lifeline for all OECS member states. The coordination framework will be essential for a credible collective reopening strategy.
CDB President Dr Hyginus Leon confirmed that disbursements under the US$722 million emergency facility are progressing, with loans and grants reaching member governments within accelerated timelines. Several Eastern Caribbean states have received budget support that is directly funding wage transfer and food security programmes.
Overall regional performer this month: Dominican Republic, which has moved first and most decisively on reopening planning, deploying a large fiscal stimulus and signalling to the global travel market that it intends to welcome visitors back from July. This first-mover boldness carries risk but also significant potential reward.
Looking Ahead
The Dominican Republic’s planned July 1 reopening is the most significant development on the near-term Caribbean horizon. If it proceeds without a significant COVID outbreak, it will create pressure on Jamaica, Barbados and other major destinations to accelerate their own reopening timelines. The summer season — traditionally a period of moderate Caribbean tourism compared to winter peak — would ordinarily not be the pivotal revenue window. But in 2020, any tourism revenue is better than none, and the operational and reputational learning from a limited summer reopening would be invaluable.
The Atlantic hurricane season will add another layer of complexity. A forecast above-average season — driven by warm Atlantic sea surface temperatures and reduced wind shear — means Caribbean governments will need to manage pandemic response and hurricane preparedness simultaneously. Properties in exposed coastal zones face the additional risk of a storm season layered on top of an economic crisis, and property insurance markets should be carefully reviewed by all Caribbean owners.
For property investors, the period ahead is one of watchful positioning. Transaction markets will not fully restart until international travel is permitted and buyers can conduct due diligence in person. But the pipeline of pent-up demand — from diaspora buyers, from international second-home seekers reconsidering their options in the pandemic’s aftermath, and from Caribbean-based buyers who have weathered the crisis — is building. The post-pandemic recovery, when it comes, is likely to be meaningful for well-located Caribbean residential assets.
The Caribbean Property & Investment Review is published for information purposes only and does not constitute investment advice. All data sourced from publicly available regional and international sources. © 2020 Caribbean Property & Investment Review.
Discover more from Jamaica Homes News
Subscribe to get the latest posts sent to your email.
