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Andrea Ortega

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  • Three keys for supporting Caribbean tourism after natural disasters

    Three keys for supporting Caribbean tourism after natural disasters

    Over a period of two weeks, the Caribbean was stricken by two devastating Category 5 hurricanes. Tidal surges ravaged pristine beaches, leaving only remnants of what had been homes, luxury hotels, and businesses. For the tourism sector, the second most important source of employment in the region, there will be a period of inactivity estimated to last between three to four months. This could reduce the sector’s revenue by as much as 50%, according to the World Travel and Tourism Council. Tourism is one of the main economic drivers in the Caribbean. It represents almost 18% of the gross domestic product (GDP) in the region, and in countries like the Bahamas and Antigua and Barbuda, it accounts for as much as 29%. Unfortunately, it is an industry frequently affected by climate change. For example, in early September, Hurricane Irma generated losses amounting to 1.2 billion euros in islands like St. Barts, and affected 95% of the buildings in St. Maarten. Today, after Hurricane Maria, there are still no estimates of the total damages, but it is well known that the level of destruction has been enormous to islands, like Puerto Rico. In response to these problems, Rogerio Basso, principal investment officer and head of Tourism at IDB Invest (formerly known as Inter-American Investment Corporation) highlights three keys for reactivating the sector after these natural disasters: 1.     Sustainable infrastructure When the El Niño flooding lashed northern Peru in March 2017, the country decided to take a new approach to rebuilding. The Caribbean now has a similar opportunity. Incorporating sustainable buildings will allow the sector to become more resilient and to be better adapted to the effects of climate change and natural disasters going forward. “We have the opportunity to develop projects that feature more robust structures, to reevaluate hotel design practices and consider the appropriate placement of more vulnerable outdoor amenities such as pools, restaurants and bars, and assess the use of the right materials and finishes that best protect the hotel structure and make them safer,” says Basso. This is nothing new. Many hotels in Miami are fitted with hurricane proof windows, since they are commonly affected by these natural disasters. Similarly, there were several hotel properties in the Dominican Republic that thanks to the strength of their construction experienced limited damage following the passage of Hurricanes Irma and Maria. 2.     Resources for rebuilding and improving For many Caribbean countries, the goal is to rebuild before the high season which starts at the end of the year and ends on the first quarter of 2018. Unfortunately, not all properties feature the appropriate insurance coverage or have plentiful capex reserves for reconstruction efforts. At last count, it is estimated that the impact of Hurricane Irma alone could generate losses between US$5 and US$15 billion, according to AIR Worldwide. Those that have insurance for natural disasters could recover a large portion of their investment to renovate their facilities. Additionally, there are hotels that feature business interruption policies that would allow them to mitigate somewhat the impact of temporary closures due to renovations. For Basso, insurance proceeds could also allow hotel owners to rebuild with greater resilience, and further support sustainable development practices. The IDB Invest expert says that “this may be a great opportunity for hotels to address deferred maintenance issues, refurbish their facilities to higher standards and emerge with a more competitive lodging product, thereby enhancing the overall destination.” 3.     Incentives from the public sector Another ingredient for reactivating Caribbean tourism is to have public sector support to improve and rebuild necessary tourism infrastructure like highways, airports and signage that may have been affected or destroyed. In Chile, for example, the 2010 earthquake resulted in economic losses amounting to US$32 billion (approximately 15.1% of GDP), and 75% of the costs to rebuild were assumed by the government, making it possible to reduce somewhat the private sector’s financial burden. Creating programs to temporarily reduce tariffs related to reconstruction efforts or providing some form of tax relief can support the Caribbean sector’s resurgence, states Basso. This has been done in areas affected by natural disasters, as in the United States following Hurricane Harvey, where the Internal Revenue Service (IRS) gave a tax relief to victims of some eligible parts of Texas. Experts anticipate that climate change will continue to strike the Caribbean, but no one can predict the magnitude of the upcoming damages in the future, even though there are areas where tourism has been able to revive and even improve its income following natural disasters. For this reason, the only thing to do is to be prepared with resilient and sustainable buildings, and tools to support the resurgence of tourism in the region. Subscribe to receive more content like this! [mc4wp_form]

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  • Three ways banks can attract millennials

    Three ways banks can attract millennials

    71% of the millennials in the United States would rather go to the dentist than listen to what banks are saying, according to the Millennial Disruption Index, while 35% of the banks in Latin America feel they are not meeting the needs of this generation, and 71% admit they are unable to rapidly adapt to technological advances, according to a study done by the GMix program of Stanford University and Technisys. However, in upcoming years this age group will be the main source of consumers and labor. Millennials represent close to 30% of the population in Latin America and the Caribbean. For more than half of them, only innovative companies will be successful. In effect, four out of every ten believe that the private sector is the true driver of innovation, according to a survey conducted by Deloitte. For this reason, banks in the region are looking for new formulas to attract them: 1.     Chile: Collaborative spaces The millennials are the “BRICs” of the age groups: due to their size, they can disrupt the economy, particularly the banking industry, according to Scratch. In Chile, banks are betting on collaborative spaces to approach this generation. Thus, was born Work/Café, a space open to the general public for working, holding meetings, and using free Wi-Fi and that already has six locations in the country. The Santander Group’s wager includes a cafeteria with discounts for clients, executives specializing in financial advice, and ATMs for cashing checks, making deposits, and transferring funds. Another characteristic sought by millennials is flexibility. Thus, these branches add four hours to traditional banking hours in Chile, remaining open for 18 hours, Monday through Thursday. Work/Café also gives talks in order to keep capturing clients constantly. [clickToTweet tweet="35% of the banks in #Latam feel they are not meeting the needs of the millennials" quote="35% of the banks in Latin America feel they are not meeting the needs of the millennials" theme="style1"] 2.     Brazil: 100% virtual In Latin America and the Caribbean, 55% of the population buys products via the Internet and 90% of millennials are digital banking clients. For this reason, a Brazilian bank made the decision to be the first 100% digital bank. Banco Original developed a website, applications for mobile telephones, tablets, and even Smart TVs to reach its public on line and close its branches. To avoid in-person visits, this Brazilian bank developed a site with services for personal, commercial, and agribusiness banking. In addition, it developed Bot Original, a service enabling interactions via Messenger and even on Facebook, with a robotic system of instantaneous responses for clients. 3.     Mexico: On-line support for SMEs One of the region’s largest financing gaps is experienced by small and medium enterprises (SMEs); this gap is estimated at between $210 billion and $250 billion. However, for more than half of the region’s millennials, a venture is one of the most important achievements. Thus, the banking system is seeking ways to facilitate access to financing for SMEs given that applications for financing for companies of this type still require in-person visits in many countries. Bankaool, Mexico’s first 100% on-line bank, developed financing tools for SMEs. Clients can apply for and receive financing for their businesses in a more streamlined and expeditious way. This has also allowed the bank to carve out a niche within the financial industry based on its work generating inclusive businesses. Innovative wagers continue to flourish in the region and in the rest of the world, from applications for different financial operations and the use of biometric profiles, to the development of products for women’s banking. They all seek a positive effect on returns, efficiency, and the consumer’s experience. It is thus essential to continue looking for strategies that make attracting millennials possible since, as John D. Wright once said, “Business is like riding a bicycle. Either you keep moving or you fall down.” Now we need to see what the banking sector’s next move will be in the region. Subscribe to receive more content like this! [mc4wp_form]

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  • Six key steps to become an energy efficiency expert

    Six key steps to become an energy efficiency expert

    Energy efficiency is a key part of cutting costs at any business or in any household. That said, do you know how to perform an energy audit or where you can learn how to do so?

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  • The issues that marked the private sector in 2017

    The issues that marked the private sector in 2017

    For the private sector, 2017 was a year marked by major changes and a call to prepare for the future. From the damages done by natural phenomena to the adoption of new technologies, several factors made this the year of adaptation, for both businesses and people. In this context, many Latin American and Caribbean countries began to explore new ways to grow, invest and even generate energy. Here we share the most discussed issues in 2017: 1.     Solar energy took off In 2017, the constant increase in oil prices and the reduced cost of photovoltaic panels helped to spur notable growth in solar power, both in the developed markets and in Latin America and the Caribbean. The growth of this industry has gone hand in hand with the public and private sectors in the region, which have worked on procurement policies and programs to incentivize the use of clean energies, to transform the energy matrix and stimulate private investment. Review once again which countries are leading in solar energy in the region. 2.     Natural disasters demand sustainable buildings Hurricanes and floods produced millions in losses, in Latin America and the Caribbean and the rest of the world during 2017. Hurricane Irma devastated the Caribbean, while other phenomena also left their mark in various countries of the region. For all of them, the lesson was clear: sustainable buildings are required. In all sectors, climate change is expected to continue causing havoc, and for this reason infrastructure must be increasingly more resilient. After the storm, many have already made the decision to adapt. We leave you with the case of Peru and its model of Reconstruction with Changes following the floods that swept through the north of the country. 3.     Bitcoin whets investors’ appetite Bitcoin was another main issue in 2017. The cryptocurrency achieved fame when it entered the market, with prices above US$17,000, awakening crowds’ appetite. Although there are still many experts who warn about the risks of investing in digital currency, the imminent bubble it can cause in the markets, and the lack of regulation, it quickly became widespread. For many, investing in Bitcoin is a new way to diversify funds and even offset inflation in their countries. Also for this reason, every day there are more who seek to dabble in digital mining. Here we share the opportunities and dangers of Bitcoin mining in our region. 2017 was a year for adapting to new forms of construction, new ways to generate energy and even new ways to save and invest. For companies in Latin America and the Caribbean, this capacity will be key to continuing to have an impact on development and growing sustainably. As Peter Druker says: “the entrepreneur always searches for change, responds to it and exploits it as an opportunity.” What changes do you think will occur in 2018? Discover the rest of most searched terms during the year in Google Year in Search 2017.

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  • Why do some SMEs suffer from Peter Pan syndrome?

    Why do some SMEs suffer from Peter Pan syndrome?

    In 1983, Dan Kiley revolutionized psychology with his book The Peter Pan Syndrome, a condition characterized by a fear of growing up and assuming responsibilities. But today, individuals aren't the only ones who suffer from this syndrome: businesses do as well.

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  • Three reasons why sustainability supports SME growth

    Three reasons why sustainability supports SME growth

    Doing business these days is about more than just profitability. It’s also about sustainability, even for small and medium-sized enterprises (SMEs). Despite this, lots of SMEs are standing on the sidelines, hesitant to make investments in sustainability that don't guarantee an immediate return. So let's look at these three reasons to invest in SME sustainability initiatives:

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