The United States Virgin Islands have been a US territory since 1917 becoming a very popular tourist attraction over the past century. The territory’s economy has become heavily reliant on this tourism and since the COVID-19 pandemic, has been struggling to bounce back. It has actually been reported that “since the 1960s tourism has at times been more than 50% of the gross domestic product and has generated more than 25% of the employment.” This further highlights the enormous impact that COVID-19 had on an archipelago like the US Virgin Islands.
The archipelago’s government has struggled to diversify its economy with the most prominent sectors being tourism, oil refinery, and rum production. The reliance on tourism for economic stability was only further displayed when the pandemic hit and unemployment rose by 1.08% reaching a record high of 13.55% in 2020. According to the USVI Bureau of Economic Research, Government and Leisure and Hospitality jobs make up 53% of all jobs in the archipelago making it incredibly difficult to find solid work during the pandemic when tourism was so low. Now that we are two years into the pandemic, governments have been working tirelessly to fix their economies using an array of different methods. Increased government spending has been an option used by the US Virgin Islands “with the local government approving a near $1 billion budget in fiscal 2022.” However, with a population that has declined by 18.1%, according to recent census data, it is proving to be a very difficult task as the number of people who can work has significantly decreased.
With the increase in tourism since restrictions have been lifted, the archipelago still struggles to reach its previous numbers as back in 2019 the number of tourists reached a total of 2,074,009 for the whole year. Recent data from the USVI Bureau of Economic Research from 2021 shows that the total number of tourists that visited last year only reached 1,047,816, cutting the number of tourists nearly in half. While decreased tourism is not the only reason the economy is suffering, a Moody’s Investors Service report ranked the economy as a Caa3 indicating that they are in poor standing and are subject to high credit risk likely because of a “small and highly concentrated economy.”