Domestic activity alone can't save us

On March 18, 1995, the Seahorse Inn Restaurant and Bar opened its doors in Black Rock, Tobago.

It celebrated its silver jubilee, last month, but there was no celebration to commemorate the milestone. Instead, the restaurant, known for its enticing international and local cuisine, was shut down on the anniversary of the day it opened for business 25 years ago.

Other restaurants and food establishments on the island suffered a similar fate owing to the lockdown on non-essential activity to prevent the spread of covid19.

It’s a period Seahorse Inn owner Nicholas Hardwicke will always remember.

“We were intending to do something to celebrate but obviously when this whole thing (covid19) blew up, we could see the way it was going. Those plans had to be shelved,” he told Business Day last week.

“Restaurant owners and practitioners were basically suffering because there was no business, no activity. We are a community and I think we all felt one-another’s pain.”

Now that the country’s food, manufacturing and construction sectors have resumed operations through Government’s phased reopening of the economy, Hardwicke is hoping he can still celebrate his business’s milestone.

But the jury is out on when that is likely to happen.

He said it will be difficult for many food establishments to sustain themselves since the borders are still closed to tourists.

“The steps are welcomed and we understand the methodology the Prime Minister and his team are following, which, on the face of it, seems entirely sensible,” he said of the phased reopening.

However, Hardwicke noted Tobago’s 55,000-plus population alone cannot support popular fast food establishments like KFC, Royal Castle, let alone the less known eateries and catering businesses.

“We just do not have the population size to sustain the sector to the extent Trinidad has. It is not a sustainable footprint to go forward on.”

Hardwicke said the missing ingredient in Dr Rowley’s news conference on May 9 was “a recognition of the unique circumstances afflicting Tobago, where the private-sector economy is linked, inherently, either directly or through linkages, to the performance of the hospitality and tourism sector.

“So to say that borders remain closed, while inter-island transport is discouraged and difficult, and that a population of 55,000 people can sustain businesses on that level without some degree of support, is unrealistic.”

Hardwicke said the grim reality is that many businesses connected to the food sector may be forced to shut their doors permanently.

“At this point in time, six or eight weeks into the process (since the onset of covid19), they are simply running out of time and resources to sustain themselves to a point of reopening. And, it is a difficult situation for Tobago because there simply aren’t the economies of scale here that can create enough activity to make people survive if it is going to be a long, drawn out reopening process.”

Hardwicke noted Dr Rowley had projected in his address the country should return to some semblance of normalcy by the July-August vacation period.

However, he stressed many businesses are in need of urgent assistance.

“That would be a date to aim for, I am sure, but in the meantime what are they going to do for those businesses who have done what the government asked us to do in keeping our staff engaged and making sure the financial hardship was not felt in the larger workforce community.”

He said many businesses are still saddled with utility bills, business levies, VAT payments and other expenses.

“Those things require day-to-day cash flow (that) simply isn’t there and has not been there for over a month. So, it is a challenge.”

Despite the challenges, Hardwicke considers himself fortunate. He said none of his employees were laid off during the stay-at-home period.

“All of them were sent home because there was nothing for them to do. As best as we could, we were paying all of them as much as we could. We did our best to make sure they were financially secure and following the conventions that the prime minister asked: to keep staff on the books. But there appears to be very little in terms of recourse to assist struggling businesspeople in Tobago.”

Hardwicke said there is an assumption that businesses can survive.

“Unfortunately, we carry the risk and we also carry the buck in terms of the major liabilities. There needs to be some attempt to alleviate the ongoing cost to the business community.”

Saying there does not appear to be any time frame by which business people are likely to resume operations given the pandemic’s uncertainty, Hardwicke said such projections are necessary.

The businessman said even as it grapples with covid19, Government must provide details about the way forward.

Mentioning the government’s plan to introduce two new fast ferries in June to serve the sea bridge, Hardwicke said the vessels would be a tremendous boost to Tobago’s economy.

“It would improve the comfort, reliability and volume of access on the sea bridge and allow people to social distance and travel with a degree of comfort and predictability.

“That would very well be a life-saver for Tobago in terms of encouraging people to view the island as a realistic opportunity for July-August vacation.”

In the meantime, the main concern is survival.

“Given the unique situation Tobago finds itself, without the population size to sustain businesses in the hospitality and tourism sector, how are we expected to get through the next few weeks and months.”

Looking ahead, post-covid19, Hardwicke said his main concern is that the various measures implemented to mitigate the spread of the virus will discourage people from partaking in business activities, particularly in the retail sector.

“Businesspeople require cash flow to keep their businesses afloat and it is difficult to see a pathway forward when, even if you are open, business income is so reduced that it doesn’t really make the difference between survival and failure. So, as soon as we can get back to a situation where businesses can regain a measure of break-in performance, that’s a desirable position.”

He said the government must also continue to invest in methods of screening, testing and contact tracing to prevent a resurgence of covid19.

“As far as hospitality goes, I think a big issue in respect of our being able to cope will depend on when the borders of the country can reopen and when airlines can start to come back into the country again.”

He said while the domestic market provides a buffer in crises like these, international visitors are the lifeblood of the tourism sector in terms of bringing in foreign exchange, inflating the domestic money supply and stimulating consumer demand.

“It is that foreign market that we need to get back.”

Hardwicke said while the opening of borders is a matter of discretion in many countries “ultimately we have to do what is in the best interest of our population here.”

Covid19, especially for small, tourism-dependent islands like Tobago, has reinforced the need for the government to diversify the economy.

“The government has to secure another path that isn’t dependent on the energy sector because our situation nationally is made worse by our over-reliance on oil and gas.”

He said the future looks extremely temperamental and uncertain.

“This is a time to stop the talk that has been going on for years since Vision 2020 back in the early part of the millennium and start doing things to diversify the economy and expand the economic base of this country.”

Tourism offers great linkages to other sectors of the economy but, Hardwicke observed Government continues to focus on the energy sector.

The tourism and hospitality sector has tremendous earning potential.

“It can not only generate foreign exchange but create jobs because oil and gas are simply not going to be there for us in the capacity we have enjoyed.”