That economic recovery continued in the monetary union during 2023 (see Thursday edition) is in principle good news. However, compared to last year growth dropped from 7.5 to 4.1% and 9.8 to 3.8% for respectively Curaçao and St. Maarten.
Especially the latter is a significant decline, although one must consider that 2022 followed a very difficult year due primarily to COVID-19 and the increase was therefore bigger. The pandemic’s long-term impact was still felt this year, along with that of the war in Ukraine, heightened geopolitical tensions, spillovers of monetary policy tightening and extreme weather conditions.
All growth is welcome, but when outpaced by inflation it does very little for most people. Keeping consumer prices under control is therefore very important as attempted by expanding the basket of basic goods.
Disappointing summer months in terms of stay-over guests was the main problem in St. Maarten. Air arrival figures remained below those of 2022.
However, that year pent-up travel demand following the lifting of COVID-19 restrictions played a role. In terms of lower room occupancy, an ever-bigger number of private vacation rental offers must be taken into account too.
The current cruise season looks promising and early winter resort bookings are said to be strong. Nevertheless, an apparently growing discrepancy in business activity between summer and winter has become reason for some concern.
Extreme seasonality promotes social instability and related issues, especially when the local labour market and laws are not geared towards such. The often-heard complaint about abuse of short-term contracts illustrates that mindset.
The dominant hospitality industry needs to operate at a reasonable minimum level year-round because the entire island to a great extent depends on it. When one speaks of resilience and less vulnerability, finding ways to attract tourists also during the traditionally slower period should be top priority.
