A Neglected Sector – The Contribution Of Small Hotels To The Tourism Product

Adrian Loveridge - Hotel Owner

Operating a small hotel, clearly I have to declare a bias towards this sub-sector. But from a national point of view in terms of revenue and employment generation, have we ever analysed which type of our diverse lodging offerings proportionally delivers the highest net income to the country year after year?

What type of accommodation provides the most jobs per occupied room night and highest percentage turnover that remains in Barbados?

And this should not include just the bed nights, but secondary spending in restaurants, attractions activities, car rental, shopping etc. We should then ask which sub-sector consistently achieves the closest to published rack room rates, without having to dramatically discount to attract tour operators.

Then question which properties solicit the highest levels of guest satisfaction and repeat guests. If the world’s largest travel website, TripAdvisor, can be used as a barometer does the fact that every one of the top ten rated hotels in Barbados are small have any significance?

This really goes back to ensuring our national marketing organisation, advertising agency and public relations company, all fully understand the product.

Perhaps many persons reading this column would be surprised to learn that there is no portion of the annual budget of the Barbados Tourism Authority dedicated to this niche. Nor is there a small hotels committee or product club and that the only trade body dedicated to this sub-sector, Intimate Hotels, has had it’s Government grant either severely pruned or eliminated altogether. Add to this, that out of our total of almost 160 registered hotels, nearly 120 are defined as small.

Most people, whether inside the industry or not, understand that government is under severe fiscal pressure, therefore previously approved budgets have not been able to be implemented to allow the full allocated funds to be used.

I recently attended a general marketing meeting. Members were asked to put forward suggestions to combat, what at this time appear to be imminent softening flight loadings over the next couple of months. Call it naivety if you wish, but I believe there is always something that can be done, even if the overall effect might not redress the total problem. The stumbling block was, if solutions were proffered, the monies to implement the ideas were not necessarily available, at least not from the public sector.

It’s a catch 22 situation for government. If you don’t fill the rooms, you cannot collect the VAT payable, not only on the accommodation, but all the secondary spending. Add up all the other taxes the administration collects, like departure and income tax, NIS contributions and the benefits resulting from the redistribution of employee earnings into the economy. Without these, it makes it even more difficult for government to pay the bills.

Almost reconfirming the concerns about air lift, as this column was going to press, Virgin Atlantic launched a new Rewards offer for it’s Flying Club members called Two for One. For travel up to 31 May, two people can travel from Manchester or Gatwick to Barbados for 47,500 miles return. While taxes are still payable, it literally halves the normal cost of a ticket and I hope that our tourism planners make full use of this opportunity.

10 thoughts on “A Neglected Sector – The Contribution Of Small Hotels To The Tourism Product

  1. WHY is Reundel Stuart still Prime Minister ?
    WHY is the eager 11 not saying anuthing
    WHAT is phase 2 of the Alexandra School Plan ?
    WHO get tricked in the fiasco
    IS Mary Redman a joker ?
    WHAT is Adrian Loveridge’s agenda ?
    WHO de ^%&#@# is Adrian Loveridge anyhow ?
    WHERE is Chris Sinckler ?
    DOES he know that he is the man for the people and not Freundel ??
    DO you know that if Chris Sinckler is not PM going into the elections, I am not voting for the Dems ???
    SO why does Adrian Loveridge get a column and not me JUST ASKING ???
    WHO does Adrian Loveridge think he is ??

  2. Clean comfortable rooms,clean linen, Clean lawns and gardens. Pleasant polite staff and good food and drinks.

    Big or small this should be the minimum standard for hotels. If you can’t meet those standards close the hotel.

    @BTA when are you going to put the same number of Advertisements on Toronto TV as Jamaica or Sandals does?
    I love to hear “one love” but I would like to hear Alison singing, “Come to Barbados” with a typical clean Beach and turquoise sea in the background.

    Barbados is still a great tourist destination but you have to let the world know and remind them often.

  3. DONT you know that it is Reundel Stuart for real ?
    DONT you know that he has ruined eveything for the DLP ???


  4. JUST ASKING wrote “WHO does Adrian Loveridge think he is ??”

    Since this is a free blog I will answer. As far as I know, he owns a hotel that employs Bajans.

    and JUST ASKING , if you are willing, I will bet that David will print your column as long as you do not write anything actionable.

    So I anxiously await your column.

  5. Thought our tourism stakeholders might find this interesting. What struck me was the implicit suggestion that a lack of finance for hotel construction in the current scenario means that places/brands with inventory to sell would be better off than those affected by a shortage of room stock when the recovery comes. Perhaps the Four Seasons naysayers might wish to consider this.

    Also worthy of note is that this article was pre the Greece deal, making a faster recovery in Europe more likely than predicted here.

    February 14, 2012 6:21 pm Financial Times
    InterContinental: rooms with a view

    After a tiring recent journey, InterContinental Hotels looks comfortably checked-in and wearing the fluffiest of white bathrobes. The group’s 2011 results on Tuesday showed that earnings per share, adjusted for one-offs, had risen by a third. Investors, however, knew the good news was coming, pushing the shares up by almost half since last August. That leaves IHG trading at 18 times forward earnings, and its shares near an all-time high. Is the minibar half full or half empty?
    There are still plenty of reasons to be bullish. Revenue per available room, the key hotel industry indicator, jumped 6 per cent last year. This built on similarly strong growth in 2010. Supporting this is a lack of finance for new construction that has caused a contraction in hotel supply. That should boost revpar even further, especially in the US, which generates two-thirds of the group’s operating profits.
    Moreover, the US market could end up growing more quickly than investors expect. If spending continues to recover, albeit slowly, then IHG should take a slice of travellers moving from economy hotels to its midscale Holiday Inns and upscale Crowne Plaza brand. By contrast, Europe remains a problem area. Lower occupancy across the region, which accounts for one-sixth of operating profits, meant revpar was stagnant in the fourth quarter compared with a year earlier.
    But IHG’s push into the high-growth Chinese market may provide a hedge to flagging Europe. Last year, operating profits in China, which contributed a 10th of the total, picked up by a quarter. Plans to launch a local hotel brand as well as IHG’s focus on directly managed top-notch hotels in the region should also help the bottom line. IHG’s share price may be close to an all-time high, but it may not be worth stealing the bathrobes and checking out just yet.

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