Navigating Past the Storms: Sint Maarten Resilience Amidst Hurricanes and the Covid-19 Crisis
The Hurricanes of 2017
In September of 2017, Sint Maarten was slammed with a category five (5) hurricane. The hurricanes caused billions of dollars’ worth of property damage and lost-lives. The Hurricane had a devastating impact on Sint Maarten’s economy. By 2018, tourism plummeted to -56% from the previous year. According to The United Nations (UN), the estimated damage was $10 Billion. It took more than two-years of rebuilding and recovery efforts for Sint Maarten’s economy to start-up again.
The COVID19 Pandemic
Just about the time, Sint Maarten was starting to recover from the hurricanes The COVID19 Pandemic brought an almost 100% shut down to Sint Maarten’s economy. According to the Caribbean Hotel and Tourism Association, an estimated 75% of hotels were forced to close in the wake of the crisis, leading to an immense loss of revenue. The economy contracted by an estimated -17.9% in 2020, with major impacts on fiscal revenues. There also was a significant increase in the cost of living due to the rise in prices for food, housing, energy, and healthcare. This abrupt halt in tourism activities left many businesses, including restaurants, tour operators, and local artisans, struggling to survive.
Unemployment and Migration:
With the closure of hotels and the cessation of cruise ship operations, the repercussions reverberated throughout the labor market. The lack of employment opportunities compelled thousands of individuals to leave the islands in search of alternative means to support themselves and their families.
Government Response and Support:
The Sint Maarten Government swiftly recognized the urgency of the situation and implemented various measures to mitigate the economic impact. Stimulus packages were rolled out to provide financial relief to affected individuals and businesses. These packages included wage subsidy programs, grants, and low-interest loans aimed at preventing further job losses and stimulating economic activity.
Road to Recovery:
Despite the immense challenges faced by Sint Maarten, today there are strong signs of resilience and recovery. According to the International Monetary Fund (IMF), Sint Maarten projects a strong tourism recovery in 2023 with an expectation of 5% growth. Economic activity is anticipated to recover to pre-hurricane/pandemic levels with a 1.4 Billion GDP in 2023 and per capita GDP of $32,000 USD.
The Princess Juliana International Airport (SXM) continues with its ongoing reconstruction and is expected to be complete by 2024. According to Tourism Analytics, total airport arrivals were 416,209 people or almost 65% of 2019 levels.
A new record for cruise ship daily arrivals was set for St Maarten on January 17, 2023 with 30,349 people. Projections for 2023 are for 1.1 MM passengers and back to stabilized levels of 1.5MM for 2024.
According to data by the Saint Martin Hospitality & Trade Association, as of December 2022, there are approximately 2,231 hotel and time share units on the island. Hotel occupancy has been steadily increasing with record occupancy of 71% in 2022 and ADR’s at peak or above peak levels.
There appears to be a positive shift post COVID19 in terms of the seasonality of Caribbean travel. The summer season, which is normally the low season, has seen a significant increase in occupancy in 2021 and 2022. This occupancy increase has been primarily from family travel seeking destinations more affordable and closer to home (US/Canada).
Length of Stay
The length of stay has increased post COVID19 as travelers continue to blend leisure with business – “bleisure”.
Sint Maarten’s resilience in the face of the 2017 hurricanes and the Covid-19 pandemic is a testament to its people and determination. Despite the devastating impact of these crises, the island has made significant strides in rebuilding its economy. With government support and stimulus packages, Sint Maarten has seen a strong rebound in tourism, reflected in increased hotel occupancy and the resumption of cruise ship activities. Projections for 2023 indicate a robust recovery, with anticipated growth in tourism, a recovering GDP, and positive trends in seasonality and length of stay. Sint Maarten’s ability to adapt and rebuild offers hope for a prosperous future and a testament to the resilience of the Caribbean region as a whole.
If you are interested in learning more about the Caribbean, join us at this years’ CHRIS conference in Coral Gables, Florida from May 22-25, 2023.
AG&T is a real estate development and consulting company founded in 1998 with headquarters in Miami, Florida. Our track record spans over 55 real estate development projects in Puerto Rico, Sint Maarten, Costa Rica, Panama, Mexico, Dominican Republic, and various other Caribbean islands. www.agandt.com