The Last Great Summer: How Jamaica’s Record-Breaking 2019 Season Looked From the Closed Hotels of July 2020

In the summer of 2019, Jamaica’s hotels were full, its beaches were busy, and its tourism industry was delivering what would prove to be the last great season before COVID-19 ended a decade of consecutive records. Writing now, in July 2020, with the hotels quiet and the beaches open only under the strict health protocols of a cautious reopening, the summer of 2019 feels like a photograph from another era — vivid, detailed, and separated from the present by a distance that cannot be measured in months alone. What follows is a record of what that summer was, and an attempt to understand what it still means for the recovery that Jamaica is now, slowly and uncertainly, beginning to attempt.

• Q3 2019 GDP grew approximately 1.8%, sustaining the year’s strong performance.
• Summer 2019 tourism delivered the ninth consecutive record, approaching 700,000 visitors for the quarter.
• No hurricane made significant impact on Jamaica, preserving the full season’s revenue.
• BPO sector employment surpassed 40,000 direct jobs, a new milestone for the industry.
• Unemployment for the quarter held near 7.8%, a historically low level for Jamaica.
• Jamaica began cautious tourism reopening in June 2020 under strict COVID health protocols.

The third quarter of 2019 — the summer months of July, August, and September — was Jamaica’s tourism peak, the period when the accumulated investments of a decade in hotel rooms, airlift, and product quality produced their fullest return. The Jamaica Tourist Board recorded approximately 690,000 stopover arrivals for the quarter, a figure that placed Q3 2019 among the strongest single quarters in the island’s recorded tourism history. Hotels across the north coast reported occupancy rates above 85 per cent through July and August, with the new rooms added by the Sandals and Royalton expansion programmes absorbed immediately by a demand that had been building across the post-reform years. The cruise passenger segment added a further several hundred thousand visitors whose spending — concentrated in Falmouth, Ocho Rios, and the Montego Bay craft market — generated employment in the informal economy that the formal sector statistics do not fully capture.

The hurricane season of 2019 passed without significant impact on Jamaica. The island received some rainfall from the outer bands of several systems that tracked through the Caribbean, but no major storm made landfall or caused the kind of agricultural or infrastructure damage that had historically set back development progress. The clean season mattered not only for the direct preservation of tourist infrastructure but for the signal it sent to the forward-booking market: Jamaica in September 2019, with the season behind it and a strong winter season opening, was projecting a confidence in its product that the travel trade was responding to with early bookings for the October-to-March period that would eventually be disrupted, though no one knew it then, by a pandemic arriving from the other side of the world.

The business process outsourcing sector crossed another significant threshold during Q3 2019. The Business Process Industry Association of Jamaica reported direct employment in the sector exceeding 40,000 workers for the first time — up from the 30,000 milestone crossed in Q1 2018 and representing a doubling of the sector’s workforce in under five years. The growth reflected both the organic expansion of existing operations and the entry of new international operators attracted by Jamaica’s improving business environment, its relatively young and English-proficient workforce, and the infrastructure investments in digital connectivity that successive governments had supported. For a sector whose output is entirely export-oriented, the BPO workforce was earning foreign exchange in a way that diversified Jamaica’s income stream beyond tourism and remittances — a structural improvement of real medium-term significance even if it did not fully register in the headline growth numbers.

Bank of Jamaica quarterly GDP estimates for Q3 2019 placed growth at approximately 1.8 per cent, consistent with a full-year 2019 figure that was moderating slightly from 2018’s 1.9 per cent but remained well above the sub-one-per-cent pace of the adjustment years. The composition of growth through the summer quarter reflected the seasonal dominance of tourism and hospitality, but also showed contributions from construction — still elevated from the hotel room pipeline — and from the financial services sector, which was benefiting from the credit expansion that lower interest rates and higher consumer confidence had enabled. The BOJ’s inflation-targeting framework continued to function smoothly, with inflation within the 4 to 6 per cent corridor and exchange rate management providing the stability that international creditors and domestic businesses both required.

Writing in July 2020, the contrast with the present moment is almost too sharp to narrate without a sense of vertigo. Jamaica reopened its borders to international visitors on 15 June 2020 under a set of health protocols — mandatory testing, designated resort corridors, contact tracing systems — that would have seemed like science fiction in the summer of 2019. The first flights carrying tourists from North America and Europe landed to a welcome that was warm and cautious in equal measure. Hotel occupancy in the first weeks of reopening was a fraction of 2019 levels, a function of global travel anxiety, reduced airlift, and the economic devastation that lockdowns had wrought on the US and UK middle-class families who make up the largest share of Jamaica’s visitor base. The summer of 2020 will not look like the summer of 2019 from any angle. The question is whether it can look like a beginning.

The fiscal position at the time of writing reflects the full force of the COVID shock. The Ministry of Finance has confirmed that the primary surplus targets of the reform era have been suspended, necessarily and with IMF concurrence, to allow emergency fiscal support for households and businesses devastated by the shutdown. The government accessed IMF emergency financing in May 2020 under the Rapid Financing Instrument, a mechanism that bypasses the programme conditionality that the EFF and SBA required in exchange for speedy disbursement. The debt ratio, which had fallen to approximately 94 per cent of GDP on the eve of the crisis, will rise sharply as GDP contracts and borrowing increases. The arithmetic of the reform decade is running in reverse.

What This Means

The summer of 2019 matters in July 2020 because it established a ceiling against which the COVID contraction will be measured. When analysts model Jamaica’s recovery path, they will use Q3 2019 as the benchmark — the quarter to which the economy must return before anyone can speak of having recovered rather than merely survived. The distance from that benchmark in tourism arrivals, employment, and fiscal balance is the measure of the work that lies ahead. It is a very large distance. But it is not an infinite one, and the institutional capacity that Jamaica built during the reform decade — the BOJ’s inflation-targeting framework, the fiscal rules, the EPOC monitoring, the improved business environment — remains intact. The economy that must be rebuilt is starting from a better base than the one that faced the 2013 crisis.

The Road Ahead

Jamaica has reopened its borders and is attempting to rebuild its tourism season under COVID protocols that, if they function, could allow a partial recovery before year-end. The health picture remains fragile: case counts are low but the global pandemic is intensifying in the United States, Jamaica’s primary source market, in ways that could reverse the modest gains of the June reopening. An election is approaching — the Holness government must go to the polls before February 2021, and political calculations are layering on top of pandemic management in ways that will test the leadership of a government that has governed through both economic reform and now crisis. Whatever the election outcome, the incoming government will face the most difficult fiscal starting position since 2013 — with less room to manoeuvre and a population that has been through a great deal already.

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