Sharp decline in tourism contributes to the GDP contraction on Saba

The value added by the accommodation and food services sector and the culture and recreation sector declined as tourists stayed away as a result of the coronavirus pandemic. On Saba, passenger arrivals by air and sea (including by ferry) dropped by 70 percent in 2020. In addition, fewer rooms were rented out to students. As a result, the volume of Saba’s GDP fell by 6.3 percent, the largest decline since the start of the series in 2012.

 

 

Sharp decline on St Eustatius

The substantial contraction of 25.9 percent on St Eustatius was mainly related to a few large companies on the island. Their production is mainly export-oriented and dependent on regional developments in the oil sector. As a result of the coronavirus pandemic, there was less demand for oil and oil storage in the region.

There was also an entry ban on St Eustatius in 2020. As a result, inbound tourism by air-dropped by nearly 70 percent, reducing the value added to the accommodation and food services sector and the culture and recreation sector.

It was the third consecutive year that St Eustatius’ GDP declined. Relative to 2017, the volume of GDP on St Eustatius fell by 40.1 percent in 2020, from 142 million to 85 million US dollars (in 2017 prices). This was due to a number of factors. In 2018, hurricane Irma caused major damage to the island. In 2019, a number of large companies were greatly hampered by regional developments in the oil sector, which reduced demand for oil storage. On top of that, the coronavirus pandemic struck in 2020.

Although companies that are heavily dependent on regional developments in the oil sector have a substantial impact on GDP, their impact on national income is limited. The profits of these companies are not included in the national income because they are wholly foreign-owned enterprises; they contribute to the island’s labor income in particular.

Bonaire’s economy shrank by over 8 percent in 2020

In 2020, the economy of Bonaire contracted by 8.4 percent. This is the strongest decline since the start of the series in 2012. The economies of St Eustatius and Saba shrank by 25.9 and 6.3 percent, respectively. Statistics Netherlands (CBS) reports this based on newly released figures.

At 505 million US dollars, GDP at current prices was highest on Bonaire, followed by that on St Eustatius at 89 million US dollars. Saba’s GDP at current prices amounted to 44 million US dollars in 2020.

Accommodation and food services as well as recreation hit particularly hard on Bonaire by entry ban

The value added of the accommodation and food services sector shrank by 53.5 percent, due to a substantial drop in inbound tourism. Bonaire’s borders were closed to tourists as of 14 March 2020. The first plane from Europe landed again on the island on 2 July 2020. For other countries, the borders were shut even longer. As a result, visitor arrivals by air fell by nearly 60 percent in 2020. Cruise tourism also came to a standstill as of mid-March, resulting in over 60 percent fewer cruise passengers in 2020. Hotels, restaurants and cafés, however, were open to residents for a large part of the year.

The entry ban also caused a sharp decline in the culture, sports and recreation sectors. Its value-added fell by 43.1 percent. Recreation saw the largest declines at diving schools and casinos.

The transportation, information and communication sector presented a mixed picture. The value added among taxis, boat hire and other transport companies fell sharply, while telecommunications and IT companies performed well. The value added of the sector declined by 7.5 percent.

The picture was also mixed in the trade sector. DIY stores and supermarkets performed well, while other shops such as jewelry shops and gift shops, which rely more on inbound tourism, registered a decline. The value added of the trade sector was down by 5.5 percent.

There were also sectors on Bonaire with an increase in value added in 2020. Construction saw a rise of 8.5 percent. Education registered an increase of 4.8 percent due to more pupils attending primary and secondary education. Public administration recorded growth (3.2 percent) because the number of jobs in this sector increased compared to 2019. The increase of 2.1 percent in the care sector resulted from additional turnover generated in COVID-related care.

CBS

 

 

 

The Hague makes 15 million euros available for lower energy costs in the Caribbean Netherlands
Praise for major renewable energy investment Caribbean Netherlands

2 comments

  1. Current factors also affecting travel are high airfare from US.

    Almost doubled from “normal” rates of past causing us to re-evaluate our ability to visit along with duration and frequency of visiting .
    Even traveling with the higher than normal airlift rates reduces ability to spend more money locally per person which hurts the local economy as well.

  2. Not sure how useful this info is. Obviously both tourism and student rentals were down in 2020. 2020 also ended 21 months ago. How are numbers of 2020 useful for policy decisions if they aren’t available until Oct 2022?

Leave a Reply

Your email address will not be published. Required fields are marked *