Whether it’s bringing traditionally outsourced services in-house or right-sizing the workforce, Caribbean financial professionals advising the region’s critically important tourism sector are making tough decisions to keep businesses afloat and redundancies to a minimum during Covid-19.
Yet ACCA members speaking to AB testify to solidarity among workers, clients and suppliers, not to mention the resilience of a region used to disaster, albeit more usually through extreme weather.
Occupancy for Caribbean hotels for the first half of 2020 averaged 36.5% compared with 68.6% for the same period last year
As cruise lines stopped operating during the pandemic, cruise port operator Global Ports Holding (GPH) asked its 24-strong workforce in St John’s, Antigua, to work from home. It reduced rent rates for businesses based in Antigua’s cruise centre, offering two months’ free rent and up to 80% discount thereafter, helping them to stay open. GPH also provided free training on how to manage, adapt and tailor business in the current environment.
‘Managers company-wide were asked to take a salary deferment,’ explains Nadasta Hurst ACCA, GPH Antigua’s head of finance.
‘We also eliminated all or most of the outsourcing, such as cleaning, landscaping and security, and now handle it in-house. Our driver is now working on facilities maintenance, and one of our accounting team members is working three hours a day with the custodian team. Everyone has come together as we pool our internal resources.’
‘We will also see what we can get back on our insurance, as our season was cut short in the middle of March,’ she adds.
Working blind
The pandemic hit as GPH was building a new US$30m pier in the Antiguan capital’s port.
With no set date for when cruise ships will return to the Caribbean – GPH also operates in the Bahamas and Cuba – Hurst is ‘working blind’ on forward projections.
‘All of these places have been affected,’ she says. ‘We think the Bahamas will probably bounce back quickest due to its proximity to the USA. People can visit the Bahamas on a three-day itinerary, but Antigua is on a 10-day itinerary. People just don’t want to be on a ship for that long; they want to limit their potential exposure to Covid-19.’
‘We are looking at ways to diversify,’ adds Hurst. ‘We recognise we can’t depend solely on the cruise industry. I’m constantly looking at where we can cut costs and find innovative ways to bring in new revenue.’
Hotels hit
In Trinidad, tourism plays second fiddle to oil and gas, but even here, the coronavirus has ‘drastically impacted’ operations, says Shiva Singh FCCA, director of finance at Hilton Trinidad in Port of Spain.
The hotel’s occupancy rates plummeted below 5% earlier this year but rose back up to 24% for September. Occupancy for Caribbean hotels in general for the first half of 2020 averaged 36.5% compared with 68.6% for the same period last year, Singh says.
So far, the Hilton Trinidad has retained its 400-plus employees, but only through government wage subsidies from April, Singh explains. Management salaries have been reduced by 10–20%.
‘Right now, I’m doing the budget for 2021 and, while everything is uncertain, preliminary figures suggest an average occupancy rate of 30%,’ he says.
Doing the books remotely
While Singh used to work with physical documents in the office, now he reviews them remotely from home. The books were closed remotely in March. ‘We’d never have conceived of that before,’ he says.
Costs have been reduced by freezing capital expenses and reviewing fixed contracts. One of the two kitchens has been closed to save cleaning costs. ‘We also shut down entire wings of the hotel to save on utilities.’ Some supplier fees were renegotiated, ‘and we extended payment terms with others from 30 to 60 days’.
With Trinidad’s February 2021 Carnival celebrations looking uncertain, hotels are bracing for further losses. The island’s 2020 carnival went ahead before Covid-19 lockdowns started to bite, but 2021’s likely cancellation is bad news – it is the largest carnival in the Caribbean, attracting thousands of international participants.
‘We usually experience high occupancy in the three weeks leading up to Carnival,’ Singh says. ‘Next year will definitely be a challenge. With hotels operating at 30%, rightsizing the hotel operations will be a major consideration.’
Lay-offs
Ethlyn Crooks FCCA, financial controller at Couples Sans Souci resort in Jamaica, understands. The company, which employs almost 2,000 workers across its four hotels, has retained all permanent employees, but most temporary staff have been laid off.
Care grants from the Jamaica government have ensured tourism workers impacted by Covid-19 have had their basic needs taken care of, Crooks explains.
When borders closed in March, Couples shut down for three months. ‘It was peak season, so we moved from 80–90% occupancy to zero,’ Crooks recalls. Then, early in September, two of its resorts, including Sans Souci, closed again to slash expenses. Meanwhile, suppliers and clients have supported new payment plans to help cashflow.
Workload trebled
Jamaica’s financial year ends on 31 March, and remote working trebled Crooks’ workload, she says, exacerbated by the poor internet connectivity that plagues much of the Caribbean.
‘Reports are required daily, and I was doing these remotely, but it is easier to come into the office,’ she explains.
For now, her focus is on holding costs down and maintaining the property ‘so it’s presentable when we start accepting guests again’.
Looking ahead, she says: ‘It should not be difficult for us to get financing if we need to.’
Despite the challenges, Crooks says she’s optimistic. ‘You really feel the togetherness of the people, there’s a feeling that we will get through this, and that’s something to be grateful for.’
