Using data to build a stronger tourism industry
The impact of Covid-19 on the tourism-dependent Caribbean has been severe, with many small, traditional operators most affected. But as former Bahamas tourism minister Vincent Vanderpool-Wallace describes in this Q&A, a data driven recovery might help these businesses become more resilient and robust in the future.
Q: The Bahamas has seen its tourism numbers fall dramatically, with sector losses estimated above $3 billion. What has been the local impact of such a drop-off in tourists?
Vincent Vanderpool-Wallace: It’s an astonishing change, from walking around and seeing people who are obvious visitors in very large numbers, to really only seeing residents. And knowing that a substantial part of the foreign exchange – the US dollar in particular in the case of The Bahamas – is disappearing.
“I don’t think there’s anybody in the country who doesn’t now understand why tourism is so very important, because its absence creates such turmoil.”
As crass as it may sound, for every visitor coming to The Bahamas, that’s $2,000 being brought into the economy. We had 1.7 million in the previous year, that’s people who stay overnight, then another 5 million coming by cruise ship.
I don’t think there’s anybody in the country who doesn’t now understand why tourism is so very important, because its absence creates such turmoil.
As a country, about 50% of your income has just disappeared. Worse is the impact on employment. More than 60% of employment is directly or indirectly related to tourism.
We estimate something like 51 cents out of every dollar that goes into The Bahamas Treasury comes from tourism.
When that begins to disappear, you can imagine what it looks like on the ground.
The country has just started reopening to tourists, allowing beaches and major hotels to reopen. How has your Government tried to manage the health risks of the virus — both to local people and to tourists themselves?
Islands, generally speaking, should be able to control this pandemic compared to larger land masses, but many countries in the Caribbean made a fatal mistake that they’re now correcting.
That was largely because some places decided to test people on arrival, as opposed to testing them before they got on an aircraft. They’ve quickly learned this was a bad idea and reversed it.
Many countries in the Caribbean also made a fatal mistake in allowing exceptions for citizens when it came to pre-testing. That was how we came to have community spread.
The Government now requires people to have a rapid RT-PCR Covid test and upload the results before they board their flights to come into the country.
That really has been the best way to make sure that that you minimise the contamination being brought in from the outside.
Now, we’ve seen a convergence towards a sensible pre-testing regime before you get into the country, while also assuring visitors that service providers at the other end will have been similarly tested. That’s likely to remain the process from here forward.
We’re working hard to ensure that there’s a limited number of people allowed into the country who have any possibility of being contaminated. We have created bubbles, such as quarantine hotels, to make sure service providers also remain contaminant free.
Given the importance of tourism to the Caribbean economies, how strong is the drive to encourage diversification in the wake of the pandemic?
You hear every day somebody’s talking about some form of diversification. But when you have the numbers that I mentioned earlier, in terms of foreign exchange, employment, and tax collection, is very hard to replace that at a moment’s notice.
“We can’t give tourism up, but at the same time, we need to recognise that it would certainly be prudent to diversify.”
Tourism is going to come back, and we need to make sure it comes back better, but at the same time we need to build other sectors of our economy in order to get things moving.
The financial services sector has been a distant second pillar to tourism, and it supports a large number of middle-class families and financial services, but the OECD has regulations that they are now putting in place that are threatening that sector.
We have an agriculture sector, which you can build up by encouraging people to grow themselves instead of importing products. The opportunity for substitution — growing and serving other sectors through tourism — is also being discussed as a form of diversification.
Let’s face it, we have a quite natural comparative advantage in warm weather. We can’t give tourism up, but at the same time, we need to recognise that it would certainly be prudent to diversify.
When we look at the impact of Covid, one change for The Bahamas has been the rapid increase in digital activity, from remote working to contactless transactions. That’s a big shift for traditional businesses – what has it been like?
This pandemic has forced a community that was very reluctant to move into the digital world to have to change.
Fridays, for example, was the busiest traffic day in The Bahamas.
Why? Because people would still go to the bank and stand in line for money rather than going to an ATM or doing transactions online.
In lockdown, you have no other option but to pay those bills online, so suddenly, there is a behavioural change that’s not going to be reversed.
The community is moving into a greater understanding of the power and value of digitalisation that they never ever would have done otherwise. That is the one silver lining out of this pandemic.
That leads us to the role of data collection and data-driven insights for tourism. The Bahamas is one of the countries in the Caribbean introducing digital embarkation cards, which unlocks insights into visitors and their preferences. Where do you see this data having the most value?
The key phrase has always been actionable insights. When you begin to show people things that are important to their business development and product improvement that they never would have seen before, they sit up and pay attention.
“I am able to ask visitors for their interests and preferences, then tailor an itinerary – and I have just opened up destinations to more visitor participation than ever.”
The Bahamas has been an independent country since 1973 and if you use that as a starting point, there’s been 160 million visits to the Bahamas since that time. Even if you look at more recent database, there’s just such a motherlode of information in there that we haven’t analyzed previously.
Where are my visitors coming from? How long in advance are they making that booking? What are they going to do? What is their reaction? What did they think about their experience?
One of the issues in our part of the world is broadening the distribution of income and the reason that is difficult is the visitor doesn’t know all the options available.
Now I am able to ask visitors for their interests and preferences, then tailor an itinerary – and I have just opened up destinations to more visitor participation than ever.
If we had this data in 2019, we would have been able to assist visitors when the Bahamas was hit by a hurricane. We would have known where people booked ahead of time, and then ask if they would like arrangements made to other islands not affected by the hurricane.
What we are doing has the potential to transform national tourism management in a way that was impossible before — a radical change at the national level, for the private sector, and for the entire region.
Vincent Vanderpool-Wallace is a former tourism minister of The Bahamas and founder of specialist tourism advisors Aboardia, which is working with Baker Tilly in the Turks and Caicos Islands on various tourism data and analytics initiatives.