This article originally appeared in the Beacon’s Sept. 6 “Irma Anniversary” edition.
Like many people throughout the Virgin Islands, Courdney Williams has a very different daily routine than he did 12 months ago.
Prior to the passage of Hurricane Irma, Mr. Williams operated a shuttle for a business that serviced customers of Horizon Yacht Charters. After the storm devastated the maritime industry, however, far fewer tourists came sailing through the Virgin Islands. And that didn’t just impact charter and bareboat companies: It had a ripple effect on the scores of satellite industries supported by the yachting sector, such as beach bars, restaurants, dive shops, and, in Mr. Williams’ case, shuttles.
Now, he spends his days actively taking part in the territory’s rebuild, doing woodwork for GK Construction. It hasn’t been the roughest transition, since Mr. Williams did woodworking earlier in his life, but he still hopes to resume his old job when the tourist arrivals pick back up again.
The evolution of his year is in many ways emblematic of the VI’s overall post-Irma economic shift. The hurricane demolished tourism properties and yachts up and down the territory’s coasts, leaving droves of hospitality professionals jobless and with no idea what they would do next. It also, however, established the need for an inflated construction sector capable of shepherding the rebuild forward.
Overall, the catastrophe did obvious harm to the territory’s economy: Inflation-adjusted gross domestic product (known as Real GDP) last year is estimated to have seen a 2.69 percent decrease, according to government’s 2018-2020 medium-term fiscal plan.
Real GDP is also expected to decline a subsequent 2.54 percent this year, dropping to $866.64 million, due largely to declines in the tourism sector, the MTFP predicted.
Additionally, government collected $30 million less in revenue in 2017 than it was projected to, a drop of nearly 10 percent. This year, government is budgeting for a deficit for the first time in recent memory.
“It’s going to take us four to five years before we get back to pre-Irma levels in terms of government and its revenue,” said Financial Secretary Glenroy Forbes, adding, “We have projections showing that in the fourth year following Irma we will get our budget balanced.”
The picture is not entirely dire, however: The financial services industry has sustained a strong string of quarters despite the challenges, and many of the territory’s staple businesses have rebounded completely or are well on their way. Construction is booming, and many aspects of the tourism industry have been resurrected.
Tourism
As suggested by Mr. Williams’ experience, the tourism sector was the hurricane’s most severe economic casualty.
After 2.75 strong years of across-the-board visitor growth, Irma shattered 2017’s progress and set this year up as the most diminished season in recent memory. Total tourist arrivals decreased by 33.8 percent last year, according to the MTFP.
The number of overnight tourist arrivals in 2017 plunged to 334,630, an 18 percent decrease from the year before. That drop was due entirely to Irma and Maria’s impact on the year’s fourth quarter, according to statistics the BVI Tourist Board provided to the Central Statistics Office.
Predictably, the negative effect also carried over into the new year, with only 44,934 overnight visitors, including land-based and yachting sector tourists, arriving to the territory’s shores in the first four months of the year — a 74 percent decrease from 2017.
Cruise ship arrivals didn’t fare any better: 409,723 passengers visited the territory’s shores last year, a 41 percent decrease from 2016, and only 35,342 arrived in the first four months of 2018 — an 89 percent decrease from the year prior.
All in all, when comparing total arrivals from November 2017 through April 2018 — a period that includes the time traditionally considered the tourism season — with the corresponding months in 2016/2017, the territory after Irma only received a little more than one seventh of the previous season’s visitors — 111,311 compared to 755,396.
Despite the grim statistics, however, certain aspects of the industry — particularly the yachting sector — are quickly resurrecting. And BVITB officials are quick to point out that even in the face of catastrophe the VI still managed to outperform comparable Caribbean destinations like St. Kitts and Nevis, Antigua and St. Lucia in terms of overnight visitors in 2017.
Yachting
In the days after Irma, apocalyptic images of the boats in Paraquita Bay circulated on social media and in international press reports. The photos — displaying wrecked yachts stacked like the Anegada conch shell piles — gave many owners and charter operators little hope for the future of their businesses.
Tim Schaaf, a charter yacht owner and captain, helped the BVI Charter Yacht Society complete a physical vessel damage assessment in the months after the storm, and of the roughly 900 bareboat and crewed charter yachts in the territory prior to Irma, he estimates that some 500 to 540 were completely destroyed or deemed a “constructive total loss” by insurance companies — meaning the cost of repair outweighed the value of the vessel.
Of that original 900, only about seven percent fell into the “minor damage” category, and the vast majority of the 360- 400 surviving yachts still had to undergo significant repairs before they were seaworthy, according to Mr. Schaaf, a former CYS chairman.
Essentially none came out of the storm completely unscathed: Throughout his survey Mr. Schaaf said he never saw an undamaged boat, though he noted that a handful of yachts in that estimated seven percent could have been lucky.
In the months following, the arrival of new boats helped restore a significant portion of the sector’s capacity: As of Aug. 15, the territory had a total of 2,930 beds at sea — down from 4,370 prior to Irma, according Keith Dawson, the BVITB public relations manager.
Still, the damage figures presented threatening economic implications for a sector the CSO reported brought in at least 50 percent of total visitor expenditure in 2013, 2014, 2015 and 2016.
And for some, the results were drastic: Charter operators went out of business; boat owners lost their vessels and often couldn’t access insurance payouts; and droves of industry employees found themselves out of work.
For the territory overall, however, the outlook skews more optimistic. Despite the catastrophic losses, crewed yacht and bareboat stakeholders are reporting strong levels of customer interest, both in the past eight months and especially coming up for the 2019 season.
“The charter season, overall, was much better than anticipated,” said Janet Oliver, the executive director of the CYS, a nonprofit representing the crewed yacht industry in the territory. “For those yachts which were charter ready by December/ January, there were bookings. There were numerous charters which were booked on boats damaged by Irma which needed to be rebooked and then there were charters from former guests who were anxious to return to the BVI and get money circulating again.”
Crewed yacht charter brokers believe the 2019 season will be a busy one, Ms. Oliver added.
Bareboat charters
On the bareboat side of the industry, The Moorings is currently operating about 200 yachts and hopes to be at 290 by the peak of this tourist season — which would only be about 60 fewer than it had prior to Irma, according to Josie Tucci, the company’s vice president of sales and marketing.
The business has had an “incredibly busy” summer, expects a busy 2019 and hopes to be fully restored within 18 to 24 months, Ms. Tucci explained.
The vice president said her optimism is rooted in observing other tourism jurisdictions that suffered serious natural disasters get back on their feet within a year or two.
Smaller companies that survived the storm are also coming back. Peter Twist, the managing director of Conch Charters, said he expects to operate 25 boats by next month, half of the company’s pre-Irma fleet.
That progress was hard earned: The company had a mere six yachts after the storm, only one of which had a mast, Mr. Twist explained.
“We went from a charter company to a repair company with our income stream guillotined overnight,” he wrote in an email to the Beacon. “Most of our time immediately after the storms was spent refunding deposits and processing insurance claims for the yacht owners. It was touch and go if we were going to continue in business.”
The diminished fleet and lack of business forced the company to lay off 25 of its 30 employees, though they managed to give each a $2,000 stipend from a GoFundMe campaign started by one of the boat owners.
Mr. Schaaf estimated that the territory would be back to its overall 900-vessel level by the 2019-2020 winter season.
He wasn’t entirely optimistic on other fronts, however, noting that government had done little to help the industry in the wake of the storm. Dinghy docks haven’t been reconstructed at either port of entry on Tortola, adding unnecessary difficulty to Customs and Immigration check-ins, he explained.
“We’re supposed to be the charter capital of the world,” the captain said. “We don’t even have a place to check in.”
Moving South
Boats have also relocated, with some crewed yachts shifting their charters to St. Thomas, Mr. Schaaf explained.
Even among the crewed yachts that plan to continue chartering in the VI in 2019, most have at least left for the 2018 hurricane season, travelling south to Grenada and Trinidad largely for insurance reasons.
“A few are not permitted to be in the area at all during hurricane season,” said Ms. Oliver, who noted that some 85 percent of the current CYS membership migrated south for the season. “Some are permitted to be here; however, their deductibles increase considerably if they sustain any damage due to a named storm. And finally, a number of the usual marinas used by crewed yachts to shelter from storms have had changes to their insurance and no longer allow boats to remain on the docks.”
Gerry Matt, a 22-year resident of the territory, manages and maintains a private boat based in the VI. He took it down to Grenada for the hurricane season, and he said he’s seen more VI-based boats arrive there every day.
He noted, however, that all have bookings back in the territory for the tourist season, and even the owners of the private boat on which he works plan to convert it into a VI charter yacht by 2019.
Still, Mr. Matt said insurance and safety reasons will likely turn the southward migration of crewed yachts into an annual occurrence.
“There’s definitely an economic impact,” he said, “[but] I don’t know if I’d call it catastrophic.” Many of those boats would otherwise be paying storage and maintenance fees in the VI, he explained.
There is still likely to be a lot of maintenance work to go around, however: Crewed charters are a significantly smaller portion of the VI marketplace, representing only about 100 yachts of the pre-storm 900-boat figure, according to Mr. Schaaf.
Resorts and Hotels
The storm caused destruction to the territory’s resorts and hotels that rivalled the damage to the marine tourism sector.
According to statistics provide by the BVITB, Irma damaged about 70-80 percent of the VI’s villa accommodations; damaged or destroyed about 90 percent of luxury resort accommodations; and damaged about 75 percent of territory’s hotel room inventory.
The VI was home to 2,700 hotel and villa rooms prior to the storms. As of Aug. 15, Mr. Dawson reported that only 769 were available — some of which are not available to tourists.
“The construction companies and trust companies are using whatever available stock there is for long-term accommodations,” explained Sharon Flax Brutus, the director of tourism, at a tourism stakeholder meeting in July. “Our relief workers are sitting in hotels and taking up inventory, which is something that we need to get a handle on since we’ll be under construction probably for at least the next two years.”
The diminished room stock will have some impact on government coffers: In 2016, the territory raised nearly $5 million in revenue from the hotel accommodation tax, a figure that dropped to $4.15 million in 2017 and is likely to be much less than that this year.
Overall, the sector does not look set up to recover as fast as the sailing industry. Though many resorts have partially reopened or plan to do so soon, a handful of the territory’s staple properties are facing long rehabilitation periods and uncertain reopening timelines.
VG resorts
Virgin Gorda’s resorts had suffered a rough patch starting well before Irma. In 2015, Biras Creek Resort shut down due to a legal dispute. In 2016, both Rosewood Little Dix Bay and Yacht Club Costa Smeralda shuttered for renovations, though YCCS re-opened in early 2017.
And when the storm arrived, resorts across the sister island took a beating. Little Dix, set to reopen at the end of the year, saw its progress shattered, and Bitter End Yacht Club, a mainstay in the North Sound, was levelled.
Little Dix’s projected timeline remains uncertain: The resort did not respond to multiple requests for comment, but a posting on Rosewood’s website states that it “will re-open in late 2019, although the resort currently remains closed for all future reservations.”
BYEC’s recovery timeline also has some degree of ambiguity.
“We’re focused on having our mooring field, marina and harbour-front operations, including food, beverage and retail, in full swing by spring 2019,” a statement on the yacht club’s website reads. “By then, we will be on our way to building out the rest of Bitter End’s village centre as well as planning and mobilising for follow-up phases across our 64 acres and along our mile of shoreline.”
YCCS’s reopening schedule is also uncertain: Dario Cruciani, the club’s operations manager, said in February he hoped to be up and running by November but was not certain due to various external factors.
Though YCCS’s clubhouse did not suffer any major structural damage during the storm, its dock was destroyed, forcing the cancellation of the resort’s scheduled events this year, Mr. Cruciani explained.
Despite the closure, the club kept 10 people on the payroll and should be back up to around 50 when it reopens, he added. He could not be reached for further comment about whether that initial schedule had been adjusted.
Not all VG properties faced as gloomy of a year, however. Leverick Bay Resort and Marina has been receiving a steady stream of boats since November 2017 and is now fully reopened — operating both of its restaurants, 13 hotel rooms, four suites, dock, grocery store, retail shopping outlet, beach bar, water sports and spa, according to Rebecca Lewis, the resort’s general manager.
“We had an amazing summer, actually,” Ms. Lewis said, noting that by the tourist season, Leverick plans to employ the same staff of 60-75 people that it did before the storm.
She also manages Virgin Gorda Villa Rentals, which she said plans to operate at least half of its 35 units by November, and the rest by some point in 2019.
Oil Nut Bay began renting villas in March, and in December it plans to open four new suites and “The Marina Neighbourhood,” which will include a restaurant, bar, pool, lounge, coffee bar, market, deli, boutique and library, according to Emily Oakes, the resort’s director of marketing and villa and rental management.
The resort also plans open three new marina villas by mid- 2019, an ONB newsletter reported.
Smaller islands
Resorts on smaller islands also suffered varying degrees of damage, though many have reopened to some degree or plan to soon.
Cooper Island Beach Club opened all ten of its rooms, as well as its restaurant, bar, boutique, coffee shop and rum bar, on April 1.
Necker Island is “welcoming back guests to a newly restored Great House in October this year with further inventory being added as we move through to 2019,” according to Charlotte Dollin, head of public relations for Virgin Limited Edition.
Ms. Dollin, however, declined to comment on the future timeline for Sir Richard Branson’s other property on Mosquito Island.
Scrub Island Resort, Spa & Marina had opened 30 rooms and suites; six villas; multiple dining options; a new fitness room; spas; an infinity pool; and a 55-slip marina by Aug. 1, according to a company press release. The resort’s full reopening is scheduled for Oct. 1.
Guana Island had a partial soft opening in August and plans to fully reopen its 15 hotel rooms and three villas by the beginning of October, according a resort official.
Eustatia Island was originally scheduled to open on May 1 but was delayed until later this fall, a resort official said.
It’s not clear when Peter Island Resort & Spa will reopen or even start reconstruction in earnest, according to Chad James, the director of human resources at the resort. About 35 people are currently employed there, completing mostly clean-up work, and a meeting was scheduled for Sept. 6 to plan for the island’s future, Mr. James said.
Cruise ships
Cruise passenger arrivals may be significantly diminished this year, but the territory has reason to be optimistic about the industry moving forward.
The Tortola Pier Park emerged from the storm relatively unscathed compared to most other parts of the territory, and what damage was done was repaired in a matter of months.
The park “formally opened” in May but was already at 80 percent of its capacity by then, according to Chief Executive Officer Vance Lewis, who said there are more than 50 retail establishments in the TPP currently open and eager for customers.
Last month, Disney Cruise Line returned to the territory with a 4,000-passenger-capacity vessel — the first cruise ship of that size to arrive after Irma. Cane Garden Bay, which earlier in the year was shuttered to the public due to high levels of coliform bacteria from sewage runoff, received the visitors with clear waters and several of its staple tourism attractions.
And Norwegian Cruise Line — which, along with Disney, sends the “big spend ships,” according to TPP merchants — is scheduled to return in October.
“We are expecting a remarkable 2018/2019 cruise season with projections of over 200 calls and 400,000 passengers at Tortola Pier Park and Road Harbour alone,” Ms. Flax Brutus said in a statement released last week. “Additionally, we expect over 50 calls by the smaller boutique ships to other islands including Anegada, Jost Van Dyke and Virgin Gorda, demonstrating the diversity of our destination to accommodate cruise visitors.”
The tourism director, however, has warned against bringing back too many people too fast.
“We have to be careful about an infrastructure that cannot handle 20,000 people on one day,” she said in July.
Financial services
While the tourism sector largely crumbled after the passage of Irma, the territory’s other breadwinning economic pillar showcased its disaster resilience.
The financial services industry didn’t just weather the passage of the storm — it thrived after it. Irma didn’t do much damage to the Registry of Corporate Affairs building, and both the registry and its online portal, VIRRGIN, were operating within three days of its passage.
Before and immediately after the hurricane, corporate service providers triggered their business continuity plans and evacuated employees all around the region and abroad, creating a miniature diaspora of VI industry professionals temporarily managing client needs from places like Cayman, London and Curaçao.
And though the storm caused significant damage to the High Court’s facilities, the Eastern Caribbean Supreme Court temporarily moved its Commercial Division to St. Lucia, with Commercial Court judges starting to hear VI matters less than three weeks later.
The continuity — which government officials and industry stakeholders hailed as “seamless” — paid off: The Financial Services Commission reported that both the fourth quarter of 2017 and the first quarter of 2018 had stronger incorporation numbers than their corresponding quarters in the immediate years prior.
“From a financial services perspective the story [about Irma] is that it’s a nonstory,” said Robert Briant, a partner at the law firm Conyers Dill & Pearman’s VI office. “It had very little impact on our business.”
But while Irma itself might have had a slim effect on the robustness of the sector, 2018 saw industry storm clouds of a different nature appear threateningly on the territory’s horizon.
They first materialised in March when European Union finance ministers decided to place the VI on a “grey list” of jurisdictions they believe don’t abide by EU anti-tax-avoidance standards.
The ministers have given the territory until the end of the year to address their concerns or face a full-throated blacklisting, the consequences of which remain uncertain. Though exact sanctions for blacklist members haven’t been decided by EU member states, each targeted jurisdiction will likely face serious reputational damage.
And the second major threat came in May, when members of the United Kingdom Parliament voted to pass the Sanctions and Anti-Money Laundering Act, a section of which requires the UK government to work with the overseas territories to establish public registers of company ownership. If an OT hasn’t implemented a register by the end of 2020, the legislation states that the UK government should prepare a draft order in council requiring the establishment of one.
Some have argued that the impact could be devastating: In evidence submitted to the UK Parliament before the current public registers amendment surfaced, the VI government claimed the imposition of registers could cause a funding gap of $1 billion here over the next decade.
Even in the face of those twin perils, however, most industry veterans seem to be preaching patience and caution.
“I’ve been here for 16 years. It seems like every year we’re dealing with something that is going to kill the industry,” said Gareth Thomas, the managing director of Estera Corporate Services (BVI) Limited. “We’ll weather this storm.”
Two strong quarters
In last year’s fourth quarter, when most people living in the territory didn’t have electricity or running water, 8,538 companies incorporated here, outperforming 2016’s Q4, which logged 7,780.
The strong final three months also brought 2017’s total incorporation number — often viewed as a bellwether metric for the overall health of the industry — to 32,493, a higher figure than 2016’s 31,769 total incorporations.
This year also started off strong, with 9,798 companies incorporating in the first three months — a better figure than the first quarters in both 2016 (9,456) and 2017 (8,695), according to statistics Premier Dr. Orlando Smith provided in the House of Assembly.
Government revenue from the sector also saw an increase: The FSC collected $33,964,532 in the first three months of the year compared to $25,380,887 in Q1 of 2017.
Still, those strong quarters obviously don’t reflect the potential industry damage presented by the impending implementation of beneficial ownership registers and the chance of getting blacklisted.
“Information has not percolated to the clients yet,” Mr. Briant warned.
EU blacklist
While other overseas territories like the Cayman Islands and Bermuda were placed on the grey list at the beginning of December, the EU gave the VI a three-month grace period due to 2017’s destructive hurricane season.
Most grey-listed jurisdictions have committed to addressing the EU’s concerns by the end of the year, but seven countries and territories that failed to make those commitments are already on the actual blacklist.
The EU is working on a list of sanctions for blacklisted states that is scheduled to be finalised by the end of the year, according to Bloomberg BNA.
When Europe originally laid out both lists in December, several other United Kingdom overseas territories and Crown dependencies — including Bermuda, the Cayman Islands, Guernsey, the Isle of Man and Jersey — found themselves on the grey list.
Each of the abovementioned jurisdictions had to commit to addressing “concerns relating to economic substance” by the end of this year — thus assuaging EU worries about multinational companies that use offshore structures to attract “profits” in those territories without having any real economic presence there.
The EU lumped the VI into that group in March. The problem with that, according to Neil Smith, the executive director of government’s Office of International Business (Regulations), is that there is no authoritative global or even EU definition of “economic substance.”
“The criteria that they use to define substance now is primarily physical presence and management,” Mr. Smith explained. “BVI sees substance as being a little more complex than that, [including] things like intellectual property, things like services that you could offer. Assets that we provide are things like reputation, stability, jurisprudence — a solid legal system that you can depend on.”
Chances of being blacklisted
Colin Riegels, managing partner at Harneys, estimated there is an 80 percent chance the territory will get blacklisted in 2019. Though that would probably have a negative impact, he explained, it would likely have a more severe effect on Cayman and Bermuda — both of which do larger amounts of business with the EU — than the VI, which as a jurisdiction focuses more on South American and Asian clients.
Mr. Briant echoed him, saying he also believes it is highly likely the territory will be blacklisted. Though he thinks such a listing could have a significant impact on incorporation numbers, he doesn’t see it as a likely “death strike.”
Instead, the Conyers partner said he views the list as a “failure of the continent of Europe to understand the common law English company.”
“There will be pushback,” he predicted. Not everyone agrees that the listing is inevitable, however.
Mr. Smith — one of government’s point people for EU negotiations — argued it could be preventable.
“I think whether or not we get blacklisted depends on us,” he said. “The government has a solution that would satisfy the EU and protect the industry at the time.”
Mr. Smith declined to disclose any details of this “solution,” though he did admit it could have a small negative impact on the industry — “maybe five percent or less.” That damage would be significantly less than what the blacklist would cause, he argued.
At a press conference last month, the premier acknowledged that officials had devised a solution but also declined to provide any details.
Mr. Smith, the former financial secretary, expressed confidence that the EU would be receptive to the VI’s proposal. The main variable, he said, would be whether the VI government could implement it in time.
Others in the industry seemed less worried about the prospect of blacklisting in general.
“They’ve spent more time taking people off that blacklist than they have been putting on,” Mr. Thomas said.
His comments allude to past EU sanctions failures: About three years ago, the EU published and then — after a wave of international criticism — walked back a separate blacklist including the VI and 29 other jurisdictions around the world it said were not practising “tax good governance.”
No sanctions were imposed on any of countries on that list.
Public registers
The subsequent UK public registers decision caused a much more vocal uproar in the territory.
Private citizens organised a “Decision March” in May to lambast what they viewed as a constitutional overreach. The 1,000-plus-person protest resulted in a petition being submitted to Governor Gus Jaspert the following month.
That document — which called on the UK to “stay the decision” requiring public registers until the UK government could reach a fairer agreement in line with the Constitution — garnered nearly 3,000 signatures, according to Harneys lawyer Ayana Hull, who chaired the Decision March Committee.
Public officials also decried the decision.
The premier has argued repeatedly that the legislation is unconstitutional because governance matters concerning financial services have been devolved to the VI government in keeping with the 2007 constitutional review. Dr. Smith (R-at large) also argued that the law violates the human right to privacy as described in the 2007 VI Constitution.
In June, he announced that government had appointed the law firm Withersworldwide and retained both Dan Sarooshi, a UK barrister and Oxford international law professor, and Gerard Farara, a VI Queen’s counsel with expertise in the territory’s Constitution, to explore challenging the potential constitutional violation such a law represents.
Mr. Farara could not be reached for comment regarding an update on their efforts, and at the press conference last month, the premier declined to disclose any further details about their plan going forward.
Public officials, industry stakeholders and other residents expressed particular vitriol about the UK Parliament’s decision to exclude the Crown dependencies from the same requirements. An amendment requiring the same actions of the dependencies was defeated in part due to legal questions about Parliament’s ability to legislate for them.
The UK government doesn’t appear to have a plan to rectify that, however. While visiting the VI in July, Lord Tariq Ahmad, the United Kingdom minister for the overseas territories, said the UK government didn’t want to implement public registers in the OTs in the first place and has no plans to make similar requirements for the CDs.
He promised Britain would work with the VI in future discussions to craft a solution that would address the territory’s concerns.
Global standard
It’s in those upcoming discussions with the UK government that some industry stakeholders see the most wiggle room.
One VI financial services professional, who spoke on condition of anonymity, said Mr. Ahmad assured stakeholders privately during his visit that the territory would get to choose how the register is structured.
The minister also said there was considerable flexibility with the timeline for implementation, according to the professional. That could allow the VI to delay the actual implementation for several years after the 2020 order in council deadline, making it more likely such a requirement is actually a global standard when it is implemented here.
The premier has repeatedly said in public that the territory’s stance is just that: The government has no plans to establish public registers until they are a global norm, despite the UK legislation.
When pressed further about the specifics of that stance, however, he did not provide details.
Other industries
While the territory’s two main economic sectors dealt with varying degrees of uncertainty and crisis in 2017 and 2018, other, smaller industries endured — and, in some cases, prospered — in the tumultuous post-Irma business landscape.
To be sure, some didn’t recover or haven’t yet: Small retail outlets across the territory remain shuttered, and certain bars and restaurants — like the Cabernet Bar and Grill and Bamboushay Restaurant & Lounge on Waterfront Drive — suffered serious damage and haven’t reopened.
But that’s not an across-the-board narrative: Bigger retailers have largely bounced back again, and construction companies have swelled their ranks. A flurry of new restaurants even opened in Road Town, including Captain’s Kitchen, The Rooftop by Brandywine, Pancake Paradise and Lady Sarah’s Farms.
For the majority of business owners, the recovery process did take some time. Jeremy Collymore, a honorary research fellow at the Institute for Sustainable Development at the University of West Indies, surveyed storm-impacted businesses in the VI and Dominica.
Of the 131 entities that were polled, 20 percent said it took between one to two months to resume operations and 40 percent said it took longer than two months.
“Hurricane Irma was a wakeup call for us in the BVI,” wrote Louis Potter, the chairman of the BVI Chamber of Commerce and Hotel Association, in an email to the Beacon, adding, “The BVICCHA empathised with the many persons and businesses that were affected and strive to work with them to ensure that in the rebuild no business is left behind.”
Construction
The construction sector saw the most obvious influx of economic activity in the past year.
A flood of new labourers from here and abroad joined existing construction companies seeking to scale up their operations and compete for the massive pot of residential, commercial and government rebuild projects made available in Irma’s insurance- payout-fueled wake.
Rufred Forbes and Associates (RFA Construction) employed about 40 people before the hurricane, devoting most of their time to working on the Brandywine Condominiums and a few other smaller projects, according to Cortez Forbes, the company’s managing director.
Since the storm, however, a ballooned project list allowed the firm to bring on about 40 new employees, about 75 percent of whom are VI residents, Mr. Forbes explained. That swelled workforce built back the Tortola Pier Park and is currently reconstructing the Brandywine Estate Restaurant, the Brandywine Condos, and Tobacco Wharf.
Several homeowners have also contracted with RFA for residential repairs — a development Mr. Forbes attributes to the quality roofing standards set by his father Rufred, the founder of the company.
“All the roofs he put on stayed on,” he said, adding, “A lot of people reached out to us because of that.”
The company hired a cohort of young Virgin Islander labourers in January and February, some of whom excelled and were trained and promoted to more skilled positions, the managing director explained.
That specific career track has been encouraged by the H. Lavity Stoutt Community College, which introduced 10 free-of- charge, construction-related short courses at the end of last year.
The courses — a nod to how Irma altered the labour dynamics in the territory — covered topics ranging from window installation to project management to generator maintenance.
They could offer valuable training to prospective employees looking to enter an industry that may stay inflated for some time: Mr. Forbes estimates his 80-90-person workforce will be sustainable for another two to three years before the company begins to downsize as the VI further progresses through its recovery.
On Virgin Gorda, Chris Yates, a partner at Yates Associates Construction Company, estimates that she nearly doubled her pre-Irma workforce — going from around 80 employees to 150 — as a slew of residential reconstruction jobs became available on the sister island and its neighbours like Mosquito.
Most of her new workers, however, have come from Venezuela, the Philippines and other parts of the Caribbean, though she noted the company did hire a handful of VG painters and several Virgin Islander students for summer work.
Though droves of the island’s hospitality workers lost their jobs due to the pre- and post-storm resort closures on VG and the surrounding islands, few of them transitioned to the construction industry, according to Ms. Yates.
“Your average waiter/bartender wants to be in the shade,” she said.
The businesswoman, however, praised the Labour and Immigration departments for being accommodating and processing new work permits in a timely manner.
“I honestly think Labour and Immigration were faced with an impossible task,” she said. “I think they’ve done great.
However, housing dozens of new foreign construction workers on an island with slim boarding options has presented the company with logistical challenges — as have the delays in processing construction materials at the ports, Ms. Yates explained.
“The dumbest thing the government did was to give the duty-free allowance, because it caused chaos,” she said. “Too many people rushed to import things, which tied up shipping equipment.”
Because VG is “at the end the supply chain,” containers full of the island’s construction materials that arrived on Tortola in March and April had yet to be processed and sent to the sister island by August, causing project delays, the partner explained.
Despite the challenges, Ms. Yates estimates that her ballooned workforce will be largely sustainable for the foreseeable future. Operations this year were primarily focused on getting houses back to the point where they can be rented again, she explained, and there will be plenty of opportunities for remodels going forward, as well as projects like land reclamation at Leverick Bay Resort, which she owns.
“I can see us maintaining 85- 90 percent of the workforce that we have at the moment,” Ms. Yates said.
Even smaller constructions firms had the opportunity to grow in the months after the storm.
The Tortola-based CPG, which employed eight people before Irma, had at one point in the past year increased its labour force to 31, though it has since downscaled, according to Tom Chapman, the company’s director.
Early on after the storm, CPG completed a flood of roof and window projects and used the extra income to import new tools, machinery and material for its woodshop, Mr. Chapman explained.
That investment will allow the company to increase its focus on fine interior work, he said. From there, he plans to eventually scale up the firm’s operations and workforce again.
“We want to do everything in the future,” the director explained. “We want to do full house builds from the ground up.”
Property
Despite the territory’s omnipresent destruction, the VI real estate market has done fairly well in terms of transactions, according to Paul Mellor, a senior associate at Harneys who specialises in property matters.
“While the last three months of 2017 were pretty challenging from a property transaction perspective, with quite limited activity, the picture in the first five months of the year has been far more positive,” Mr. Mellor told a crowd at a Harneys cocktail event at The Moorings in May.
He noted that both interest and the number of transactions were on the rise, with many buyers looking to purchase “as-is” damaged properties for reduced prices.
“I think it’s been notable that there’s more interest from local purchasers, both belongers and residents,” Mr. Mellor said. “And prior to Irma, probably the majority of buyers we came across were from overseas. And while we are working with a number of buyers from the US and Europe, we are seeing more interest from local people, which I think is a positive thing.”
Businesses
The hurricane impacted some the territory’s largest retailers to varying degrees. For most of the year, Bobby’s Supermarket shuttered one of its two locations, in Cane Garden Bay, though its primary Road Town store reopened quickly. The CGB location reopened its doors in August. One Mart in Port Purcell reopened its sole location shortly after the storm. Clarence Thomas Limited reopened both of its locations, in Fish Bay and on VG.
Before the storm, Road Town Wholesale Trading Limited and Riteway Food Markets operated a total of nine retail locations throughout the territory, including at Flemming Street, Pasea, Road Reef, RiteBreeze in East End, Nanny Cay, Fine Foods in East End, Cash n Carry in Pasea, Harbour Market in Frenchmans Cay, and Virgin Gorda.
By November, all but the Flemming Street, Road Reef and Harbour Market outlets reopened. Of those outstanding locations, Road Reef and Flemming Street are scheduled to welcome customers by Oct. 1, and Harbour Market is to follow by the beginning of 2019, according to Guy Strickland, the company’s managing director.
Despite the closure of three locations, the company still employs 400 people — the same as before Irma, Mr. Strickland explained.
“A lot of our business we lost in the stores that were closed we’ve managed to pick up in the stores that are open,” he said.
The managing director believes the chain’s increased product offerings have encouraged more people to shop in bulk locally as opposed to in St. Thomas, sustaining their retail market.
Though the company’s provisioning sales have suffered in response to the diminished yachting sector, its wholesale business has actually remained strong, he said.
Numerous “mom-and-pop” stores went down after the hurricane, but several new small businesses have opened up to take their place, Mr. Strickland explained.
Government is working on making that opening-up process easier, seeking feedback on a working draft of a Micro, Small, and Medium Enterprise Policy designed to streamline the steps and help facilitate potential financing for new businesses.
The policy summary — drafted with the assistance of the European Union’s programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME) — calls for increased entrepreneurship education activities; the collection of more MSME data; a reduction of administrative barriers; and the introduction of various financing options.
Some businesspeople who have opened new ventures in the past year and prior to Irma have praised the Trade Department for being helpful and accommodating, though others have lambasted the office for having unclear procedures and confusing red tape.
Unemployment
Meanwhile, though many residents have lost their jobs, it is unclear what current unemployment levels are: Just before Irma, the Central Statistics Office was preparing to conduct a labour force survey, and in the months afterwards CSO Director Raymond Phillips lobbied for the need to complete one — but government cash flow shortages prevented it.
“Doing it at that time might have been ideal because we know that the employment situation was impacted heavily as a result of the storm,” he said. The director added that he would still like to complete a survey but didn’t know exactly when his agency would have the opportunity.
His office, however, is working on initiating a “standard-of-living-conditions survey.”
“The storm passed and, for many people, things are still not back to normal, so we basically need to get an impression of the standard of living of the population,” Mr. Phillips explained. “The whole idea is for government to get a handle of what the situation on the ground is like. It ’s a household survey.”
That should also yield some labour force data as well, he added.