Submitted by Adrian Loveridge
28 February 2008
The Barbados Tourism Authority has brought back the Best of Barbados programme for summer 2008, which will run from 1st May until 15th July and then again from 1st September until 30th November. For periods other than September the incentive to purchase the package is a US$200 air credit per person, one nights free accommodation, daily complimentary breakfast and a US$25 voucher towards Oistins Fish Fry.
During September that air credit increases to US$300 and two night’s accommodation is ‘free’. Our small hotel is experiencing its best ever winter season with an occupancy rate averaging around 99 per cent. Our average room rate is US$99 per night plus VAT (7.5%). In two months we go into the eight long summer months season and are always left with the same challenging decision, should we stay open and hopefully generate enough business to be viable or should we close?
If we stay open we have to compete with the Best of Barbados programme. We have not joined other hotels in the promotion because we feel it is against the overall national economic interest of the country. Time and time again, discount driven promotions have been proven to attract the least destination loyal visitors. Generally they will book whatever is cheap this year and do exactly the same, next.
So let us do the maths based on an average room rate of US$99 plus VAT. Remember that Barbados is largely a tour operator business driven destination, so rates paid by the leading operators are often up to 40% below published rack rates.
Example ONE
Clients booking Peach and Quiet directly:
7 nights room at US$99 plus VAT divided by two (half twin)
7 breakfasts at US$12 plus VAT
Total US$469.84
Example TWO
Clients booking Best of Barbados package for months other than September.
6 nights room (one free) at US$99 plus VAT divided by two (half twin)
Daily free breakfast and Oistins voucher
Total US$319.27
LESS air credit US$200 and half Oistins voucher
Total net Revenue US$106.77
Example THREE
Clients booking Best of Barbados package in September.
5 nights room (two free) at US$99 plus VAT divided by two (half twin)
Daily Free Breakfast and Oistins voucher
Total US$266.06
Less US$300 air credit and half Oistins voucher
Total net LOSS for each BOB visitor – US$46.44
Arguments can be made that clients purchasing the BOB packages will spend other monies when on Barbados. BUT ancillary services and attractions are also heavily discounted and the evidence does NOT exist to demonstrate that persons purchasing budget packages are among the higher spenders. Many of us understood the logic of implementing a discount promotion after 911, but seven long years on, its time we moved on with a more creative and rewarding national marketing strategy.
If ‘out of the box’ thinking in tourism is going to become a reality, then it has to start somewhere!
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