Underscoring The Need For Tourism Research

Adrian Loveridge - Hotel Owner

I frequently wonder whether we as a destination have become overly dependent on tour operators filling the rooms of our accommodation providers. Of course it’s a balance.

Large room allocations to tour companies that may also be vertically integrated with airlines and even travel agents help protect air lift. Have any detailed studies been undertaken to evaluate the net differential financial value that stays within Barbados, when comparing direct bookings and those generated through the travel trade? Should ‘we’ be looking more at taking full advantage of using social media and the internet to drive a higher percentage of published price business?

What prompted these thoughts at this time was an anonymous person, posting on one of the more popular ‘blogs.’ queried the overall contribution of our small hotel when compared to a much larger property of 227 rooms. Less than 5 per cent of our occupied room nights are sold below published rack rate and all the revenue is banked in Barbados. Proportionally, even with our small staff, we employ 65 per cent more persons per room than the quoted ‘around 200’ employed by the larger hotel.

In fairness, many other factors have to be brought into any other comparison. But if in anyway our establishment is typical of the 120 plus other registered hotels that are also classified as small, don’t you think our tourism planners would include them in their overall marketing and promotional activities?

So far it would seem the measures taken by Government to safeguard employment in tourism, has largely worked and jobs losses have been relatively limited. I can only think of one hotel which had 130 rooms that has closed over the last year, with well over one hundred people placed on the breadline, despite receiving monies from the Tourism Industry Relief Fund.

During the recent series of ‘town hall’ meetings convened to garner the thoughts and suggestions on a planned Ministry of Tourism white paper , the subject of better research was raised on at least two occasions. And it seems to me that at no time has this element become more critical to our planning in this industry, if we are going to minimise any ongoing detrimental effect to the economy and employment.

It also puzzles me that just about everyone from the President of the United States to the ‘financial experts’ not just here in Barbados but around the world, largely conclude that recovery will eventually come mostly as a result of small businesses expanding and each taking on one or two more staff.

Why then would our planners not think this also applies to tourism?

Perhaps they cannot take the necessary critical policy decisions simply because conclusive historic data doesn’t exist, due to a lack of past research. Are we continuing to second guess what is frequently referred to as our number one industry and would it not be better to stop and take a closer look at what exactly drives tourism?

0 thoughts on “Underscoring The Need For Tourism Research

  1. Hi Adrian,

    I have read on numerous times that you state the BTA does not support small hotels. But in reality do they support BIG hotels? Can you tell me how? As far as I have seen the BTA promotes Barbados as a whole destination. I have never seen otherwise.

    If anything you should form / join a group of small hotels and do your own advertising with them. I believe there is one such group in place already. So please explain why you think the class of hotel your is in should get preferential treatment. Help us understand exactly how you are being disadvantaged?

  2. Adrian,

    I think advertising and direct marketing by small hotels are the key to being able to get the rack rates in the main.

    Just look at the new property Ocean Reef suites, opened since last year, the place appears to be completely empty all the time.

  3. Quest,

    Good questions and I will try and explain.
    The majority of the marketing monies spent by the BTA is for tour operator driven business.
    As a former tour operator I know the difficulties they have working with small hotels (120 of the 160 on Barbados) due to not being able to secure meaningful (viable) room allocations.
    Millions were ploughed into the Best of Barbados programme which was bookable through tour operators/travel agents, so many of our small properties could not participate and benefit from an up to US$300 subsidy per visitor.
    So many of the larger hotels were heavily supported and subsidised.
    Small hotels like ours are also not featured in any FAM trips for travel agents or including in accommodating visiting travel writers and other media when many larger hotels are.
    Government has also ‘propped-up’ and subsidised Hotels & Resorts Ltd (GEMS) for nearly 16 years and allowed them to practice
    consistant predatory pricing (selling rooms below cost) with quoted losses of over BDS$247 million.
    I am not asking the BTA for any advantage for the small hotels over the larger hotels. Just equal treatment.
    The Chairman of the BTA recently publicly stated the important of offering value for money BUT as the ONLY hotel on Barbados awarded ‘one of the 11 Best Value for Money Hotels in the Caribbean this year by Fodors, not a single mention has (three weeks later)
    of this has been made by them.
    Its the third year we have received this award and two years by TripAdvisor for ‘Best Bargain’ in Caribbean, Mexico and Latin America. TripAdvisor has 40 million unique visitors per month.
    I really do not think it unreasonable that of the BDS$100 million annual BTA budget an amount of at least $500,000 is allocated to promoting our small hotels.
    Direct bookings, higher room rates means that Government collects increased taxation, so its more cost-effective to support us.

  4. Adrian, as we have seen from the recent pronouncements by the BTA, numbers are the game, not money spent. I still believe that fly/cruise passengers are included in those numbers until somebody official tells us otherwise. No doubt there has been more money spent by visitors this year than last, as borne out by anecdotal evidence from retailers, but it is critical that we have better figures on money spent, and less emphasis on umbers.

  5. peltdownman,

    Totally agree. The truth is that we do not know where many of our visitors stay as there
    is a huge grey area of unregistered/unlicensed
    Policymakers seem to have realised that the villa/condominium market appears to be doing better but has anyone analysed why?
    Does it come back to value for money and if so,
    how can we improve this aspect of our product?

  6. @peltdownman

    To play devil’s advocate on the matter of reporting, if the government is using the same reporting methods as all previous government then there is consistency, it can be assumed spend would be down given the slow down.

  7. http://www.barstats.gov.bb/files/documents/December_2009_and_2010_compared.pdf

    The number report is the stay over visitor number. While this would not normally include cruise passengers if the using barbados as home port via air charters. The ones that decided to continue vacation here or stuck via cancelled flight would be included in the stay over numbers.

    going to year end comparison we see some year end growth by the stay overs and normal cruise arrivals. the landed passenger however take steep fall. We can only assume that the stay over visitors and normal cruise passenger have done a generous increase in spending to realise the gdp growth in last year.

  8. Hi Adrian,

    Thanks for the reply.

    A few more questions / observations:

    1. Do you have any idea / breakdown of how much money is spent on the advertising (which is geared towards Barbados as a whole) as compared to Best of Barbados (BOB) program.

    I could see your concerns about the BOB not offering your direct booked clients any benefit – if they did not book through an agent or operator. But I think the Gov panicked and put it in place to make sure that numbers to the island just did not drop dismally affecting many industries? I believe Jamaica did something similar too but paid it directly to the airlines – and backed it up with Advertising.

    Did it work? Retrospectively, one could say that it did help us keep numbers to the island where we may have seen a bigger drop off over the years – maybe. On the other hand I believe that more should have been used to improve the islands infrastructure (for tourist) (as we are looking a little tired now) and made ourselves more marketable.

    2. About not being supported in FAM trips – I am sure you would be more than aware that it appears the members on the board of tourism who have / manage hotels seem to get all the preferential treatment here – quite unfairly – yes …. if you are involved you will and should have some advantage for your contribution but abuse and all / most being at your hotel or home is unfair – especially if you are the Chairman. I think this is where your problem lies. This is not a BTA issue to fix – it is a political issue. But yes I agree that every “good” hotel should get some of the “show time”.

    3. GEMS – I need not say anymore – It’s just a bad idea for Government to get into any business. I think we as Barbadians need to start thinking smaller Government.

    4. Congrats on the award – I am sure your placement gets you more business than the BTA can on Trip Advisor that is. But does the BTA really have the mechanism (other than staff talking at shows / maybe in their website / in brochures if they are aware etc) to do this. They don’t and could not give you the credits on an add on TV or Newspaper for Barbados – I believe their mandate is to advertise the island – I am sure their budget does not actually cover various individual properties. Most hotels around the world have to toot their own horn and place accolades on their own ads – as you have done on your website – great job. But have you written the BTA offices at this point or put anything in the local press or foreign press – Press release etc? – to let all know?

    Finally back on to issue regarding the 500 grand for marketing the “small hotels”. I just really don’t agree with you that they should put aside money for any particular hotel grouping. Their focus should always be on the island and everything we have to offer. Within their advertising (various media where space and time permits – paper / web / brochures – as TV is too short) they should highlight every type of hotel accommodation – which they do.

    One more thing – don’t think for one minute that I believe they are spending all the money wisely.. but thats a whole other issue ;-). But on the “special advertising” for small hotels I just can’t agree with you on that one. They need to advertise Barbados first.

    Are you a member of the Small Hotels of Barbados? Do they have an advertisng budget?


  9. Quest,

    1) Sadly I do not have a breakdown but a great deal goes to administration. 130 plus employed staff. My own thoughts is a more lean and mean MARKETING machine but politically
    perhaps this will never happen.
    During the brief time I was a director of the BTA, I repeatedly asked for the financial justification of the Best of Barbados programme. It was never forthcoming.

    2) This is a tricky one. 3 or 4 hotels (difficult to tell from the accounts) loosing BDS$20.4 million in a year does not scream success but some may respond by saying that they employ a lot of people.
    The other aspect to look at the overall guest satisfaction and do ‘we’ as a destination want to use this as an example, where over 30 per cent of the guests that contribute to the world’s largest travel reference website, would NOT recommend the hotel to friend.

    3) The BTA CEO was quoted recently that Governemnt cannot prop-up tourism business, but that is exactlty what they have done with GEMS for nearly 16 years to the detriment of the private sector.

    4) Thank you .
    My point there is that the BTA sponsors at least two pages per week in the local papers, a magazine called Trident and a weekly email NEWS letter. Thats all we want a ‘ mention’
    especially as their Chairman is using the media
    to emphasis the importance of providing value for money.
    The $500,000 is to give the properties that do not (or cannot) participate in discount programmes like Best of Barbados. If proportionally we get a higher room rate, employ more people and achieve a higher occupancy, it makes sense for Government to support them.
    Surely its better to encourage those that are actually successful and generate taxes rather than subsidise them as an example with over $840,000 in TIRF monies only to close and lay off over 120 people weeks later.

    For many years we were NOT allowed to join Intimate Hotels of Barbados because it was the ONLY trade association on Barbados that excluded Permanent Residents.
    I would have to study their accounts and see how effective the organisation is before we considered membership of a second trade association.
    I sincerely believe that ANY trade associatiion that receives taxpayer funding should be compelled to publish their accounts annually.

    I hope I have answered your questions satisfactorily.

  10. Walk around any major city in North America and tell me how many times you see an Ad for Barbados on a Billboard,Poster or in the window of a Travel Agency.

    When last has anyone seen an AD for Barbados on TV in North America. They are virtually non existant.
    But people over 40 still watch TV.

    Currently there is an AD every night in Prime time for the CHUM FM Breakfast in Barbados promotion.

    Time for the BTA to get back to the basics. TV and Ads in Travel Agencies and yes Newspapers.

    if they want to go with the flow, how about “live blogging”. One of my client’s have been using live blogging for 2 years now with proven success and they do $1billion in sales per year.

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