Tough Times among Uncertainty, Fear and Government Restrictions
Roatan’s tourism services and hotel sectors have been hit the hardest by the March shut down. While many hotels have fired most of their employees and shut down completely some have dug in and focused on renovations and expansion. Anthony’s Key Resort is building a new seafront restaurant for their future cruise ship guests and Meridian hotel in West Bay has focused on finishing construction of condominiums.
Edward and Laura Moulder, Meridian’s owners, take the lockdown as a time to do improvements, maintenance and construction. The Meridian is a hotel and condominium development that started in 2007. Meridian has dug into their rainy-day fund, but most of Roatan’s hotels don’t have that luxury. “I am shocked how few businesses have had reserves set up,” said Laura Moulder. “We are continuing to pay employees. We feel the island is going to get worse off if we don’t pay. (…) Important to maintain the impression that Roatan is safe and organized.”
Laura Moulder believes that the key for Roatan’s recovery lies in local businesses working together at presenting the island businesses join together and market Roatan as a safe place just like Cayman Islands or Belize have been doing. She feels that recovery from the shutdown will be different than after the 2008-2009 financial crisis and Micheletti political coup that caused the island economy to retract for over two years. “The turnaround should come quite quickly,” she says. “People have been putting their lives on hold. We will see a lot of urban money leaving. A lot of urbanites will make that move.”
That is as long as these “urban refugees” have funds to do so. With over 40 million Americans who filed for unemployment over the US shut down policy, fewer and fewer have the money to invest or travel.
There is a noticeable capital flight as Americans are ready to sell their homes in urban areas and look for safety in rural areas and the Caribbean. Turks and Caicos are benefiting from a luxury home boom as North Americans look for safe place to live, seek refuge or telecommute. This Caribbean country has cut duty and planning fees and waiving duties on construction materials. If it plays its cards right Roatan could also be in line to benefit.
Before the economic turnaround many businesses will go broke. Businesses that didn’t have a rainy-day fund aren’t doing that well. Casa Marmol, a stone finish store, closed its store at the Megaplaza Mall alongside several other businesses there.
RAS Express, an air shipping company that has been doing business since 2001 has called it quits. Gil Garcia, RAS Express’ owner, had to let go of six of his eight employees in Coxen Hole. With the airport being closed he can’t provide shipping services his business is based on. “I blame both municipalities. For the longest time Roatan was clear [of COVID-19]. They should have helped people that were stuck on the mainland instead they just came here illegally,” says Garcia. “I gave up on central government a long time ago.”
Garcia is one of the few people not afraid to criticize the almost five month long, chaotic and indiscriminate government policy of locking down healthy people and business. The isolation, fear and confusion has produced a chilling effect on the island. Many are fearful to criticize the local government officials, central government, or police.
Other than shipping dozens of COVID-19 positive police officers to the island the central government has been doing little to help Roatan handle the shutdown crisis. For one, the title registry office has been open only for two days in May, and that’s it. There is no way to proceed if someone wanted to buy or sell a property.
The next financial crisis on Roatan might come from the looming foreclosures on thousands of loans on properties and vehicles.
Some businesses are getting creative in trying to pay their staff dependent on tourists. West End’s Sundowners Bar has eight local staff and its owners resorted to doing a raffle to pay some of the staff’s $4,000 monthly salaries. “The island has been shut down for almost four months. No cruise ships, no flights, no tourists. (…) our local staff is hurting,” wrote on social media Aaron Etches about his iconic Roatan bar.
Some businesses are actually thriving. Island Shipping, cargo shipping between Roatan and the mainland, has taken over freight business that before the shutdown was handled by the Galaxy Wave ferry.
While Galaxy Wave had practically no business since mid-March but it has managed to update much of its on-land facilities and two of its ferries. “We took time to do the general maintenance. We painted the engine room, seats, we redid lifeboats, (…) we redid the sales counter,” said Jesus Reyes, Galaxy Wave manager, adding that the operations are aimed to return in mid-August. “We are quite ready to start operating. We are just waiting what the airlines and airport want to do.”
Some businesses have managed to opened new locations, or even expand their operations. Serrano Industrial hardware store opened a long planed second location in Coxen Hole. CARNIAGRO, an agricultural supplies store, moved to a new, bigger location in French Harbour. “Now we are selling many seeds and plant products,” said Greg Norman, owner of CARNIAGRO.
While hardware stores and agricultural supplies stores are not as dependent on tourism and keep the island economy afloat, they are struggling as well. “We are doing half the sales we did in January,” said Oscar Oseguera, Madeyso’s General Sales Manager who moved to Roatan form La Ceiba several weeks ago to help run the two Madeyso stores on Roatan.
The next financial crisis on Roatan might come from the looming foreclosures on thousands of loans on properties and vehicles. While Honduras Central government have imposed a moratorium on banks not to require payments from debtors for three months that expired in mid-June. On July 1 many struggled to renegotiate terms with their Honduran lending institutions.
Banco Atlántida, Honduras’ biggest lender, owns a big stake in Roatan’s defaulted properties. “[Banco] Atlántida is not very forgiving under normal circumstances,” said Laura Moulder. For over 20 years Banco Atlántida has amassed hundreds of acres of Roatan land and properties and it is likely to take over more properties in the months to come.