Two years after Hurricane Irma, a walk through Road Town suggests that the biggest victory of the private sector also remains its greatest challenge: rebuilding.
“Many of the businesses are still working to rebuild their physical [premises]. They’re still in a redevelopment phase, and it shows that recovery takes time and it takes money and it takes resources,” said consultant Chaunci Cline, vice president of hospitality at the Chamber of Commerce and Hotel Association.
“The reality is there hasn’t been a lot of support for businesses in terms of funding, so you really have to do it as funds are available. Some companies still haven’t settled with insurance companies, although the majority have.”
In spite of such challenges, the private sector — especially the two economic “pillars” of tourism and financial services — has continued to take a leading role in the recovery even as the government’s efforts appear to have slowed over the past year amid a funding shortage.
In the weeks immediately following the storm, the financial sector proved crucial: Thanks to sound continuity plans, many firms continued functioning without major interruption, ensuring that the sector’s income, which makes up some 60 percent of public revenue, continued to stream into government’s coffers.
The yachting industry led the way in the tourism sector: At a time when hotels and vil- las were devastated across the Virgin Islands, charter companies quickly imported boats and began offering service again before the end of 2017. Now, the yachting and cruise ship sectors both are almost back to their pre-Irma capacity. And although landside accommodations are only halfway there, many large hotels are expected to reopen during the coming tourism season.
Building back better
As the recovery proceeds, Ms. Cline said that the call to “build back better” has been heard loud and clear. Hotels, restaurants and other businesses are building additions, redesigning, and revamping amenities, menus and services. In the financial services sector, efforts are being made to grow, learn and prepare for possible future disasters.
“Perhaps it was an opportunity to reimagine who you want to become over the next 10 to 20 years,” said Ms. Cline, former general manager at Village Cay Resort and Marina.
Meanwhile, the construction sector has boomed, and many new businesses have popped up: The past 12 months have seen the introduction of a bonfire-delivery business, a carriage-rental service and the territory’s first electric charter yachts.
Government’s medium-term fiscal plan predicts a 6.4 percent growth in gross domestic product in 2019, with modest growth expected in 2020 and going forward, coming primarily from tourism and related industries.
“Recent ongoing and expected investments in our tourism infrastructure across both public and private sectors are expected to buttress eco-omic growth in the coming months and years,” the plan states.
Thomas Warner, general manager at Foxy’s Tamarind Bar on Jost Van Dyke, sees a bright future on the local level as well.
“Our micro-economy has basically come back,” he said, adding that businesses have to work on “re-monetising” the economy.
At Foxy’s, that has meant the introduction of themed full moon parties, as well as the second annual Foxy’s HempFest, all devised to drive traffic to the island.
Ms. Cline said she would “like to think that some businesses have taken this as an opportunity to reintroduce themselves.”
High costs, red tape and access to labour and materials challenged the tourism industry in the past year, but nevertheless statistics from the BVI Tourist Board show that the hard work is continuing to pay dividends.
“We always talk about the hit that we got in 2017, but when I look at where tourism is now in 2019, I also compare our tourism numbers to destinations … who have not been hit,” Tourism Director Sharon Flax-Brutus said in July at the BVI Finance-sponsored “Summer Sail” event. “They have had two years to achieve our 2017 numbers and they have not.”
Although the most recent numbers only cover January through April, they show significant growth, with yachting and cruising numbers over 90 percent of their pre-Irma levels.
The total number of overnight visitor arrivals from January to April stands at 124,658, or 72 percent of the total for the same period in 2017. A large proportion of those visitors, said Ms. Flax- Brutus, were yachting guests.
The total number of visitors represent a 119 percent year- on-year change from the same period in 2018 — the largest growth of any of the member countries of the Caribbeaan Tourism Organisation.
Another bright spot was the cruise industry, which “has practically rebounded to normal,” she said, with arrivals at 93 percent of what they were in the first four months of 2017.
The twisted wreckage of a majority of the territory’s 900 charter yachts was one of the most visible signs of Irma’s destruction. Roughly 500 of those were “constructive total losses,” according to Tim Schaaf, a yacht owner and captain who conducted an assessment after the storm. Most of the remain- ing vessels had to undergo significant repairs.
Today, many wrecks still litter the territory’s waters and shorelines. However, the recovery of the yachting industry has also been one of the tourism industry’s biggest success stories. With 4,264 berths available at sea, the yachting industry has nearly reached its 2017 capacity of 4,370.
Bareboat charter companies such as The Moorings account for much of that influx, bolster- ing their numbers with new and bigger boats, explained Ms. Flax-Brutus.
Josie Tucci, vice president of sales and marketing for The Moorings, reported that the company has nearly 300 yachts in service and is employing 120 staff.
“We are now almost back to pre-Irma levels of fleet and staffing as we prepare for the winter ’19-’20 season,” she said.
However, among crewed yachts, recovery has been lagging slightly.
Charter Yacht Society membership is “not back to its pre-Irma numbers and, unfortunately, is recovering slower than we had hoped,” said Janet Oliver, executive director of the society.
Nevertheless, last season saw a 20 to 30 percent increase in bookings.
“I think it is safe to assume some people held off coming to the BVI during the 2017-2018 season, knowing there was substantial damage from the hurricanes,” she said.
She pointed out that the lack of land-based properties affects charter bookings as well, with visitors missing their favourite haunts in North Sound, Virgin Gorda, for instance.
Still, more CYS members are choosing to remain in the VI over the summer instead of heading south.
“There are owners who are still ambivalent about leaving their yacht here during the height of hurricane season,” Ms. Oliver said. “It may take a few years before we see the numbers climb back to where they were.”
While the yachting sector has proved to be the powerhouse of the tourism recovery, land-based accommodations, including hotels and villas, have crept up to just 50 percent of their previous capacity, with 1,346 rooms.
However, the last 12 months saw several reopenings, many of which embraced the “build back better” philosophy with new and expanded offerings, and more are planned for the coming season.
On Tortola, the Sugar Mill Resort and Sebastian’s reopened on the island’s western end, and Cane Garden Bay recently saw a major addition: The new four-storey Quito’s Inn, which had been under construction before Irma, opened in June in time to host Jamaican reggae star Buju Banton — who played a concert in the VI — and his staff.
“We had planned to be open by Christmas of 2017, but the lack of construction workers and the inability to get the needed materials pushed us back 18 months,” said Kimberly West-Rymer, co-owner of Quito’s. “Then we had serious issues with the ports and get- ting our containers released.”
She added that she was disappointed in “how little the government has done to assist in making sure the Cane Gar- den Bay area is clean and clear
of derelict vehicles, boats and houses.”
Nearby, rum brand Pusser’s partnered with Myett’s Garden Inn to reopen and operate the restaurant side of the business.
“The tourists are coming back and are genuinely impressed with how far we have come along,” said Valerie Rymer, an owner of Myett’s.
In West End, activity at Sopers Hole Marina also has seen a steady increase in activity over the past year, with work begun on the boardwalk last October.
Harbour Market in Sopers is the sole Road Town Wholesale retail location among nine to remain closed, but it is being rebuilt and “will likely open once the boardwalk is rebuilt,” according to a July post on the Sopers Hole Marina Facebook page. The Road Reef and Flemming Street locations of RTW reopened last October.
Other Tortola accommodations remain closed but are projected to open in the coming high season, including Wyndham Lambert Beach Resort, which recently launched a beachfront restaurant and is slated to open in November, according to the Tourist Board.
Further west, Long Bay Beach Resort has been sold to new owners and demolition of the old structure began in June. According to the Tourist Board, the resort plans to announce its redevelopment plans “in the coming months.”
Other accommodations, however, have announced no immediate plans for reopening, including Frenchmans Cay Resort, Surfsong Villas, and Hodge’s Creek Marina Hotel.
On Virgin Gorda, Oil Nut Bay officially opened in December with the unveiling of a marina village, which includes a new restaurant alongside a market, boutique and library.
Nearby, Eustatia and Necker islands are back in business as well.
Meanwhile, Rosewood Little Dix Bay, the largest tourist property on VG, is finishing up an expansion and renovation. The resort announced late last month that it has begun taking reservations for dates in March 2020. The hotel “will maintain its heritage from the Rockefeller years with the addition of an incredible elevation in room product,” according to Managing Director Andreas Pade.
In June, the boating community celebrated the announcement that the Bitter End Yacht Club, after more than a year of cleanup of 64 acres and the demolition of over 100 destroyed buildings, has begun to rebuild.
The property will go back to its roots as a hangout for sailors by focusing on the marina and waterfront first, opening a mile of shoreline and installing a two-storey marina village for a projected opening this year. In 2020, attention will turn to the hotel side.
“What we promise as we embark on this new chapter in Bitter End’s history is that the spirit of the place will remain,” cofounder Lauren Hokin said in a press release.
Nearby Biras Creek Resort had been scheduled to open this winter, according to the Tourist Board, but the date has since been pushed back indefinitely.
Meanwhile, Peter Island Resort & Spa continues to rebuild, but has not confirmed a reopening date to the Tourist Board, and neither has Saba Rock near VG.
When Irma hit, much of the financial services industry was able to continue operating virtually uninterrupted.
“If we can get people out on a timely basis, the practice of law can continue without a break,” explained Robert Briant, partner and head of the corporate division at Conyers.
However, that doesn’t mean that no lessons were learned. Though employees living locally were already familiar with hurricanes, “the difference was globally we recognised how an entire jurisdiction could be brought down,” he explained, adding, “We’ve talked to the new staff, saying, ‘Don’t treat hurricanes as lightly as was done before.’”
He added that the firm has made changes in the way it communicates with staff, recalling that one employee wasn’t contacted for five days after the storm.
“It’s about adopting systems to allow faster communication and faster evacuation pre or post, and a centralised awareness of such an event,” he said.
Some firms are reevaluating the evacuation plans that allow business to continue from anywhere in the world.
Colin Riegels, a consultant and former managing partner at Harneys, said the firm has arrangements with United States airlines to evacuate up to 600 people — employees and their family members — in the event of a worst-case scenario.
“My gut feeling is that we’re talking in wild hypotheticals, though,” he said.
On the ground level, Mr. Riegels reported a general dissatisfaction with internet communications since the storm.
“People weren’t well equipped to reinvest immediately,” he said. “The process has been very slow.”
Since the industry is heavily dependent on skilled labour from abroad, recruitment was difficult for some time too.
“People went through a traumatic experience and said, ‘never again,’” Mr. Riegels said. “It was hard to replace them.”
Those who did arrive found themselves “fighting for accommodation” as structures were rebuilt, he said, adding, “People do still talk a little bit about the shortage of housing stock.”
However, Mr. Briant said, those concerns have largely eased two years later.
“We’ve been fortunate to be able to attract new lawyers to the jurisdiction,” he said. “They were quite happy to move here, and they’ve found accomodation and are enjoying themselves.”
Among longtime employees, he added, “Most people have finished their construction.”
“It was sad and awful and I don’t want to minimise it, but we have moved on and life continues [for] financial services,” Mr. Briant said.
In the real estate industry, the year after Irma saw a run on storm-damaged properties. Lucienne Smith, head of the residential division at Smiths Gore, described the demand “coming primarily from belongers but also international buyers.”
Most of the less-expensive properties were snapped up early, she said, with those remaining on the market largely in the area of $2 million or more. Buyer interest is now coming from the US, Canada, the UK and wider Europe, with many clients seeking properties around the $1.5 million mark, Ms. Smith explained.
“This coming season will confirm how strong recovery has been, but we are busy and all signs are positive for a robust year ahead,” she said.
In spite of the progress of the economic recovery so far, much remains to be done across the territory.
“There’s still a lot of roofs missing in places, and next Saturday makes two years,” said Christina Yates, owner of Yates Construction and Leverick Bay Resort on Virgin Gorda.
After the storm, her goal was to work as quickly as possible to open Leverick and the Mahoe Bay Villas in order to house construction workers, cooks, housekeepers and others “so they could get back to work doing what they do.”
Her workforce of 150 — double what she employed pre- Irma — has remained steady since shortly after the storm, she said.
Leverick Bay reopened in January 2018 and remains one of the few resorts open on VG, where North Sound was formerly a yachting epicentre. However, Ms. Yates is still hampered by the lack of accommodation and the lack of places to house workers, problems which feed off each other.
The private-sector recovery still suffers from the loss of housing stock, she explained, adding that businesses “wanted to hire all the bartenders and kitchen staff working at the hotels but they didn’t have the accommodations to do it.”
Ms. Yates and other business owners also bemoaned the time and expense of importing materials through the ports.
“The hurricanes messed things up so much with more material, and the shipping companies don’t really have the same equipment that they had before the hurricane,” she explained.
Government regulations often exacerbate the situation, according to the business owner.
“We want things built … and they just make it very difficult and make it very expensive,” she said. “If you want to get the economy back and get people back at work, you ease the rules and regulations a little bit, and they did for a while.”
Government passed a duty exemption for certain imports, but it expired in March 2018. Eased work-permit rules for skilled workers expired in April 2018.
One solution proposed by Ms. Yates, who said she has been forced to hire largely foreigners but strives to recruit Virgin Islanders, is more training for young people in construction so that there will be more hands on deck in the event of another disaster.
“There’s nothing wrong with getting your hands dirty,” she said.
In The Valley, Fischer’s Cove Beach Hotel — which started offering accommodation last December but doesn’t expect to be fully restored until December 2020 — has faced similar struggles in rebuilding after losing its beach bar, its office and all six of its upstairs hotel units in Irma, according to assistant manager Angella Flax. Like other property owners, she lamented the scarcity of building materials.
“But as time went by, the local suppliers stepped up and were able to supply businesses and residents alike to begin repairing and rebuilding,” she explained. “The exorbitant fees and expenses and a short tourist season has proven to be difficult.”
According to Ms. Cline, since Irma the cost of doing business — from insurance to materials to utilities — is clearly on the rise, and that’s something for the new government to address urgently.
“How can we maintain a healthy workforce level?” she asked. “We have insurance, [National Health Insurance and Social Security]. You have all these layers. We have to sit down and tackle this thing because … when the climate of doing business is healthy, then you know we can thrive, but when the burden is on the backs of the businesses, it becomes a challenge to the economy.”