Hotels hope for better times amid
all-time low occupancy figures
~ Tests Timeline, border closure major hurdles ~
PHILIPSBURG--By normal standards, the 2020 high season for St. Maarten hotels was a complete washout since the scourge of COVID-19 entered the country at the end of February 2020, leaving hotels reeling and unprepared for the consequences to come.
Six months later hotels now have a handle on the situation, have a better understanding of the invisible enemy and have adapted accordingly. “Adapt or die” is the go-to mantra. There’s really no other choice.
To see tourism, the island’s lifeblood, disappear amid lockdowns to contain spread of the virus was the bitterest of pills to swallow. How did hotels cope without their main source of income?
The Daily Herald asked three of the major hotels – Sonesta Maho Beach Resort and Casino, Simpson Bay Resort and Marina, and Oyster Bay Beach Resort – how they fared.
Sonesta Ocean Point Resort closed from March 22 through July 15. (Sonesta Maho Beach Resort Casino & Spa will re-open October 29, 2020). Simpson Bay Resort never closed and Oyster Bay Beach Resort remained open, but without guests after the airport closed. When the lockdown was imposed an Argentinian couple got stuck at the hotel for 81 days when they could not get a flight out.
From March to August, occupancy figures plummeted in all hotels.
“We were 90 per cent off last year’s numbers in general,” noted Sonesta Resorts St. Maarten Director of Sales and Marketing Michele Olivier.
Oyster Bay Beach Resort described March as a mixed bag, the first 13 days of the month the average occupancy being at 80 per cent, then dropping to 40 per cent, and then to zero up to June 19 during the lockdown.
“It’s very troubling when we look back at March 2019 when we were at 91 per cent occupancy,” rued General Manager Ricardo Perez. “We started receiving some ‘Staycation’ guests on the weekends from June 19 and on August 8 we started receiving our first timeshare owners back.”
Simpson Bay Resort’s general manager Marcel Javois recalled the resort got hit hard in March and April when all the guests left, but when the Staycation programme started that proved to be a big help.
“We had 45-50 per cent occupancy at weekends from Staycations in May, June and July, but when the French-side lockdown took place occupancy dropped to 20-25 per cent, sometimes 15 per cent. We took the opportunity to do preventive maintenance.”
Maho Group President and Chief Executive Officer (CEO) Saro Spadaro noted 627 employees were retained and only expiring short-term contracts were not renewed. No one was laid off.
At Oyster Bay Beach Resort all employees were retained with most getting paid for 32 hours per week even if they were not working. “Unfortunately, we had to let go employees whose contracts had expired. Due to the lack of business we were unable to retain them,” Perez regretted. “We hope that when business rebounds we will need them and many more. We have to stay hopeful and optimistic. After the lockdown we took the opportunity to retrain all our staff on the new hygiene and sanitation requirements.”
Javois said none of the permanent staff at Simpson Bay Resort were let go: they either took vacation or were at home on reduced pay, but now all are back working.
Hotels fortunately have been receiving help from the St. Maarten Stimulus and Relief Plan (SSRP), although the June application proved to be a challenge.
“We have received funds to partially support payroll for April and May, but for June we are still uncertain, as we have not heard back from [Social and Health Insurances – Ed.] SZV after filing our applications,” confirmed Spadaro.
Oyster Bay Beach Resort was approved for the SSRP for April and May, helping to subsidise about a third of its payroll cost for those months. The answer for June is awaited.
“The rules were very complicated and hard to meet, especially the one requiring 100 per cent of employees’ signatures,” Perez explained. “This rule alone created unnecessary friction between employees and employer. Most employees are not familiar with the detailed requirements of the SSRP, so it was hard for them to understand why they had to sign such an agreement, especially if this was not going to represent any additional money for them.
“Actually, companies that didn’t pay their employees in June had a better chance of employees signing the letter, since they had financial incentive to do so.”
Simpson Bay Resort has also benefitted from the SSRP. “June was a challenge but all our employees cooperated and signed and that’s a reflection of how we as a company treat our staff,” Javois said.
All three hotels agreed closure of the border to French St. Martin, the unique island characteristic that gives the destination a competitive advantage, has severely hampered the experience for the very few visitors on the island.
“Many of our staff live or have family on the French side and this measure seems to have little or no effect on controlling infections, but has a very high social and economic cost,” Spadaro reasoned. “It is breaking up families and impeding further the little economic activity taking place under the circumstances. We are a one-island destination; that’s part of the attraction. The border closure makes it a drawback and diminishes the offering for the few visitors arriving.”
To what extent did the permission for US flights to arrive in St. Maarten on August 1 help occupancy figures?
“Very little, as is evident from the numbers, as we had single-digit occupancy in July and August,” replies Spadaro. “I believe rapid antigen testing on arrival and mass frequent antigen testing of the population would help us a great deal.
“The former would make travel to St. Maarten hassle-free and safe.
“The latter would help us quickly identify positive cases, quell outbreaks rapidly, keep numbers of hospitalisations low and in general keep the public safe until a vaccine is distributed.
“Rapid testing methods such as the one being trialled at Heathrow Airport in London that can return results in a few seconds – and the test can be repeated frequently since it does not require specialised labs and lab technicians to administer it – should be given urgent consideration.”
Oyster Bay Beach Resort saw some impact, going from zero occupancy to about 10-20 per cent occupancy on average since August 1.
“Unfortunately, the biggest detriment was the 72-hour requirement of the [polymerase chain reaction] PCR testing,” Perez pointed out. “Many visitors wanted to come down, but were not able to comply with the timeline of the PCR testing. Hopefully this will be expanded soon and we should see an almost immediate increase in arrivals. The biggest single hurdle is the 72-hour requirement. We lose about 50 per cent of the bookings every week due to this requirement.”
Javois said opening up to reduced-capacity US flights on August 1 had improved occupancy at Simpson Bay Resort to 20 to 25 per cent which is the figure now for August.
Cancellations and reduction in new bookings have been the most serious consequences of COVID-19, as well as the current border closure, highlighted in detail by Sonesta Resorts.
“From July 15 until September 5, we processed 1,020 cancellations of reservations and only booked 924 new reservations,” said Sales and Marketing Director Michele Olivier. “As a comparison, last year in the same period we had 816 cancellations and 5,684 new reservations.
“The first week of August, cancellations were twice what they were the week before; we had many reservations for guests from the French Caribbean who all cancelled because of the border closing. Whether they would be allowed to come to the Dutch side or return was unclear, so they simply cancelled.
“Reservations pace is down 85 per cent; 100 per cent of our cancellations are due to COVID-19 and its various effects, including the closure of the border. We have also had cancellations and re-bookings from US visitors who cannot meet the 72-hour testing requirement. Of the metric we cannot count, the potential guests who do not call, many would fall in this category; they would choose another destination that is easier to get to.”
Javois agreed that a lot of cancellations are due to the COVID-19 situation, but also because of the hurricane season entering its peak. “We see that members and guests are reluctant to travel now. But we have a call campaign going on, letting our timeshare members and guests know that the island is open.”
With all this in mind and uncertainty over when the border to French St. Martin will re-open, what sort of a high season can hotels expect come November 2020?
“A high season with low occupancy, great uncertainty and last-minute bookings and cancellations,” states Spadaro in a nutshell. “The general unstable economic climate makes it impossible to make investment decisions and hiring decisions. The situation is unsustainable.”
Adds Javois: “We have members indicating they will return in November and December, but I think overall Simpson Bay Resort will be hit by a 35-40 per cent reduction in arrivals. Even with the rentals, we are not seeing the turnover or interest to travel from rental clients.
“But we are grateful to be open and to find work for our staff, and that benefits us and them. I just hope we will see better months to come, because we cannot sustain this situation much longer. We have to adapt and give our guests confidence that they are safe here, and continue to market and promote the destination.”
Perez had a more positive outlook. He believes there will be an increase in arrivals in November and December, and more significant increases in 2021, based on encouraging indications from the last St. Maarten Hospitality and Trade Association (SHTA) survey.
“As COVID-19 cases decrease in our main source markets (Northeast corridor of the US) we will see bookings gradually increasing,” he predicted. “Now more than ever we need to make the travel experience as frictionless as possible. We need to make it easier and more welcoming for our visitors.
“We are going to have less visitors so our collective goal should be to provide even better service and wider smiles than before. We hear every day, St. Maarten is home away from home for many. Now more than ever we need to welcome them back with open arms.”
Divi Little Bay Beach Resort was invited, but declined to take part in this interview.