Since this survey was the first of its kind to be executed by DEPR, there are no previous information or survey results to compare growth, trends, and developments. However, these results will serve as future reference to ascertain the above-mentioned findings.

The survey covers information about businesses in general as well as a distinction between N.V.’s and Sole Proprietors (SPs). In this report, we focused on key factors affecting businesses to assess the various elements of businesses operating in the economy. The major factors we concentrated on were limited to the following:

1) The Type of Business (i.e. N.V. or Sole Proprietor)
2) The Location of the Business
3) The Main Activity
4) The Target Market
5) Their Performance
6) Cost Factors
7) Labor Issues

We have given cross analysis to ascertain correlation between certain variables to arrive at specific points of concern as well as to strengthen certain findings.

The findings suggest in general that 27% of the businesses experienced an increase in sales in 2000, compared to 1999, 24% experienced no change in sales in 2000, compared to 1999, and a whopping 44% experienced a decrease in sales during the same period, with only 5% giving no answer.

The primary reasons given for the businesses that experienced an increase were mainly limited to having a good product, increase in tourist arrivals, good location and increase in local consumption.

The primary reasons given for the businesses that experienced a decreased were concentrated around four major issues namely, worse economy, too much competition, decrease in tourists arrivals, decrease in local consumption. Ironically, these are relatively the same arguments that those businesses that experienced an increase in sales used to justify their performance. This illustrates that the market has reached its maturity point and there is merely a shifting of consumption and economic activity from one business to the next.

This finding is strengthened by the fact the businesses who have experienced an increase are newly emerging or entering businesses in the market. There are very few businesses that have been in the market for over 20-25 years that did experience an increase in sales. Most businesses have been in the market since 1980, which is relatively consistent with the commencement of the economic development of St. Maarten. However, businesses starting or being established in later years (from 1990’s to present) amounted to 62% and of these businesses 55% experienced growth in sales in 2000, compared to 1999.

When we consider developments in the labor market these also seem to suggest and agree with this theory as most businesses on average laid-off 2.1 persons, and on average hired an additional 3.1 persons. This has a net effect of an average additional employment of at least one person, which is supported by the unemployment rate decrease during the corresponding period. Generally, 11% of businesses laid-off employees, while 75% suggested that they did not have any lay-offs. The shifting of business and the level of competition makes the competitive business environment conducive to minimum wage employment. This was evident as there is a heavy concentration of wages around the minimum wage (both above it and below minimum wage).

From an economic development perspective this poses significant challenges for individuals and families to progress in society and to acquire an improvement in their standard of living. On the other hand, these practices maintain wages at a moderate level, keeps the cost of doing business lower, inflation depressed, and our competitive position (i.e. export price) at a competitive level.

This seems to imply that the newer businesses are considered to offer a “better” product and subsequently, consumers have been patronizing those establishment and the businesses that do not offer a better product (which could also possibly be considered a “newer” product). This serves as an indicator to businesses that reinvestment into the upgrading of their businesses as well as landlords to upgrade their buildings to increase the sales and volumes or in the case of landlords, maintaining your tenants and rental income. Additionally, the key business factor of location has also proven to be a valuable instrument and advantage for businesses to succeed in this market.

The above-mentioned finding is consistent when we look at the type of businesses, target market, and location. All these variables illustrate the same pattern of businesses performing good and bad are in the same line of business, irrespective to who these businesses target and where they are located. When we consider the target market we looked at whether the business targeted locals, stay-over tourists, cruise tourists, and/or regional tourists. Similarly, the locations where primarily concentrated in Philipsburg, Cole Bay/Cay Bay, Simpson Bay/Airport, Cul-deSac, St. Peters, Illidge Road, Zagersgut and the other residential areas to lesser extent, depending on the type of business (i.e N.V.’s or Sole Proprietor).

The report gives a further detailed breakdown and analysis of business activity in St. Maarten, which gives a more comprehensive knowledge of the positives and negatives. This report offers insight to, both the private person and/or business, as well as to government in particular to strengthen their policy on the issuance of business licenses.
The individual or business could utilize this information to strengthen their strengths and correct some of their weaknesses, if they exist.

In conclusion, it is evident that the market is shrinking as the number of businesses are on the rise, while the demand or consumption is not growing at the same rate. This results in the market share of each business becoming smaller (i.e. the slice of the pie becoming smaller) for all aspects of the community, businesses, taxi’s, buses, etc. For example, some businesses have indicated the reason for their increase or decrease in sales has to do with the tourism increasing or decreasing, respectively.

However, the stay-over tourism figures during this period has a shown slight decrease of 2.8%, however cruise tourism jumped up by a whopping 41% in 2000, compared to 1999. A possible explanation to this seemingly contradiction is in the “quality” of tourist that might be visiting our shores/island. Their spending power and disposable income might not be from the middle to upper income, subsequently, this may have lead to many visits but this has not been translated into higher sales for businesses.

An alternative but a less plausible explanation could be that businesses may be offering products and/or services that this market might not desire. However, indications from tourism surveys have always indicated that the visitors generally like St. Maarten and what is has to offer. A final opinion on this issue will be the basis of the Tourism Master Plan that will be written in the future, hopefully near future.

In addition, to St. Maarten’s economy reaching its maturity level, it should not be forgotten that the economy is considered stagnant as a result of the numerous external shocks, both natural and unnatural. From the various hurricanes prior to 1999, then Lenny in 1999, lost of tourists season in 2000 (Jan.-March) and then the tragic events of September 11, 2001. These events have resulted in St. Maarten’s economy not being able to fully recover as the recovery period is not sufficient or long enough before some other form of external shock creates another set-back. This is further frustrated by the fact the private sector is not able to acquire the required reserves to take them through the off-season. However, the economy has always and continues to show resilience by regaining lost ground.