Guam is starting to feel the pain of a global travel slowdown brought on by fear over the coronavirus, COVID-19.
One local economist says there's no question we'll take a hit in the short term, but it's too early to predict the impact of a protracted drop in visitor arrivals.

The latest numbers from the Guam Visitors Bureau show there have been 15,139 cancellations and an estimated revenue loss of $9.1-million. Both GVB and the Guam Hotel and Restaurant Association acknowledge the pain that's coming, and the chamber predicts as much as a 33-percent drop in income for thousands of employees in the tourism and hospitality industry if arrivals continue to drop.

University of Guam Economics Prof. Dr. Roseann Jones said we can recover from a limited downturn, but an extended downturn could be a problem.

"Right now I think its too soon to tell, early read is that people have a wait and see and they're not necessarily canceling those longer-term plans, but they're keeping an eye on it," she said. "So from an economic point of view, we're keeping an eye on it with them."

She said it shows again just how fragile the tourism industry can be.

"We've known for some time that we need a third leg of our economy," Jones said. "And it's this case, and these times, that show us that's why we need this. Military and tourism are great, but we need something else. Some have talked about healthcare, some have looked at agriculture, but nothing seems to be as prosperous as our tourism market. And I think that's where the competition is and if we had a better third we would've have it by now, so we don't have an answer to that."

A much more immediate concern is how to soften the blow of a tourism downturn, and businesses will be looking to the government for help. The chamber has asked for a six-month delay of the March 1 minimum wage increase, and there have been previous calls for a rollback in the business privilege tax.

"Macroeconomic policy should be looking at this but to rollback anything right now is a little too soon to do that," Jones said. "Great ideas to have on the table should this become longer-term and more consequential. Good time to be running those models about what this would mean, but government is also losing revenue as well."

She said GovGuam should already be planning for possible cost-cutting measures. All this as budget hearings get underway on Friday, with the largest agency, the Guam Department of Education up first.

"There are going to be tough and hard questions," Jones said. "We're gonna feel that in our health system and our schools in lots of ways. But again, let's not get there too soon because you can also trigger a fear factor of people not wanting to spend and pulling back. And that only amplifies the problem."

Jones said we should know much better by the end of the second quarter in June, what the long term impact of the coronavirus will be.