The Inter-American Development Bank (IDB) has conceded that a model developed by its tourism specialists and academics of a rapid post-COVID-19 tourism recovery in Barbados this year, did not anticipate a third wave of infections on the island and in the main source markets.
According to a recent Caribbean Quarterly Bulletin on Imagining a Post-COVID Tourism Recovery which looked at how several countries, including Barbados, might possibly recover their tourism sector after the devastation caused by the pandemic, it had predicted a quick turnaround of the sector this year.
However, the report stated: “The model was effective in tracking what happened to tourism arrivals in Barbados during 2020, but its forecast of a fairly rapid recovery of tourism in 2021 is not currently happening.”
However, it conceded the model went off track in the forecast for the sector that employs 15,000 workers and an estimated 32,000 workers in tourism-related jobs and services.
“This is due to the fact that last summer — when the scenario was estimated—the modellers did not anticipate the third wave of infections in late 2020 and early 2021 in both source and destination countries.”
The multilateral financial institution, which is headquartered in Washington and has a regional office in Barbados, reported: “IDB tourism specialists and academics have developed a predictive model of tourism demand and applied it to Barbados.
The model begins with a structural time- series analysis of the historical arrivals to the country up to 2019, then constructs a counterfactual of what the level of arrivals would have been during 2020 and 2021 had there not been the COVID -19 pandemic.
“The analysis then models how three factors would affect demand due to COVID -19: the epidemiological evolution of the virus in each source and destination country, the effect of reduced incomes in source countries due to the recession, and the effect of individuals’ fear of travelling. The latter factor is based on consumer surveys of willingness to travel.”
The IDB assessed that given the hit to tourism and the island’s rising’ debt, “Barbados needs to consider some significant risks going forward.”
The risks, it said, related primarily to developments in the global and domestic health crisis.
It added: “The second wave of COVID -19 will have to be controlled on the island before economic activity and tourism can continue.
“A gradual recovery in tourism, however, depends on the lifting of travel restrictions and the willingness of tourists to travel to Barbados. Consequently, it depends on positive developments in the health crisis in the United States, United Kingdom, and Canada, the main source countries for tourism in Barbados.”
At the same time, the institution cautioned about the island’s rising debt profile with the debt-to-GDP ratio expected to reach 146 per cent of GDP. (IMC1)