Update Country Report Curaçao 11 Oct 2021

Event

Tourist arrivals rose strongly over the summer months in Curaçao, indicating that the industry's recovery is well under way. This rebound is supported by rising vaccination rates both in Curaçao and key source countries.

Analysis

The Curaçao Tourist Board (CTB) reported that tourist arrivals grew by 234% year on year in August, totalling 30,852. This high growth figure is in part a statistical rebound from low arrivals in August 2020, when global travel remained muted. However, the industry is yet to fully recover to pre-pandemic levels, as arrivals this August were about 79% of the arrivals recorded in August 2019.

The bulk of arrivals in August (22,770) were from Europe, primarily the Netherlands-demonstrating the value of efforts to promote Curaçao as a tourist destination for that country, and highlighting the frequency of direct flights between the two. Overall, year-to-date (January-August) tourist arrivals were down by 4% from 2020, reflecting the strong base effect of the pre-pandemic first-quarter 2020 tourism performance. However, putting aside base effects, tourist arrivals have posted steady sequential growth throughout the year, boding well for a complete recovery of the industry in full-year 2021.

The recovery in tourism comes despite a rise in Covid-19 cases since July, which has led to some economic restrictions-including social distancing requirements and limitations on opening hours, although none of these restrictions affect hotels and resorts. The recovery has also been aided by a successful vaccine rollout domestically, as well as in the country's core source markets, such as the Netherlands. As at October 9th 58.2% of Curaçao's population had been fully vaccinated, with 63.6% partially vaccinated.

Although vaccination rates have begun to plateau-risking the island's ability to achieve game-changing levels of immunisation (60-70% of coverage with both doses) by the end of the year-Curaçao has a high level of vaccination compared with major Caribbean countries, and this should reassure tourists going forward. We expect tourist arrivals to grow more significantly from November, when the post-hurricane tourism season in the Caribbean begins.

Impact on the forecast

Our economic forecasts remain unchanged. We continue to believe that economic growth will pick up in 2022, driven mainly by the recovery of tourism.