Business survey paints dark scenario
PHILIPSBURG – Within three to six months 45 percent of workers currently employed in the private sector will lose their jobs. This appears from a survey among 580 businesses by the St. Maarten Hospitality and Trade association (SHTA). “Extrapolated to all active businesses this would mean the total number of unemployed could grow to well over 9,000,” the SHTA says in a press statement.
The dramatic outcome of the survey assumes a best-case scenario – in other words, reality could turn out to be even worse. Within 72 hours, 580 companies reacted to the SHTA’s call for participation in the survey. “With the vast numbers of participants in the survey, across all business sectors, it is safe to say that no one will be left unharmed. Continued lack of financial assistance or a clear indication of what to expect would result in layoffs happening even sooner,” the SHTA says.
The companies that took part in the survey support more than 8,000 employees and they represent 20 percent of the operational businesses in St. Maarten.
The SHTA’s conclusion paints a dark picture of the island’s future: “Acute job loss, lack of income for households and long-lasting economic decline if swift measures are not taken to mitigate the financial impact of the worldwide pandemic.”
The corona-virus crisis does not only have a direct impact on local businesses; they, in turn, will feel the effects of what is happening elsewhere in the world. The SHTA notes that in the United States already more than three million people have lost their jobs. “This impacts our largest segment of visitors.” Furthermore the cruise industry has taken a major hit due to “recommendations by major countries against traveling via cruise.”
The SHTA does not expect that business will return to pre-corona levels immediately after travel restrictions have been lifted. “St. Maarten will have to reinvent itself in the face of changing tourism without knowing how it will change.”
The association repeats its rescue recommendations for the short term: 90 percent payroll subsidy for all sectors and a zero tariff for turnover tax. “This aims to keep businesses alive and employees paid.”
The SHTA says that the results of the survey “echoes our concern that the prolonged effect of this pandemic will force businesses to close and staff to be laid off,” adding that most businesses do not have the resources to weather prolonged closure. “The business landscape will likely be very different this time next year, and perhaps we will no longer be known as the culinary capital of the Caribbean.”
The association foresees “a retraction in the number of businesses able to survive post-pandemic” – thereby indicating that a yet unknown number of companies will go belly up in the aftermath of the corona-virus crisis.
“It is imperative that all parties find a solution for reducing the effect of this formidable challenge; it does not just impact the private sector because tax revenue will also dwindle. Turnover tax and room tax are already near zero percent.”
The SHTA states in its press release that maintaining job and income certainty for private sector employees “is key to maintaining our households and our businesses.”
While other countries have announced rescue measures like the ones suggested by the SHTA, St. Maarten thus far “has no comprehensive plan addressing the various fallouts. Many people still believe that all we have to do is open our borders again for the tourists to return.”
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