Tourism In Crisis

Adrian Loveridge – Owner of Peach & Quiet Hotel

Of course its the easy option. To continue burying our heads in the sand and pretend that we really don’t have a serious problem with our tourism industry. The alternative is to address the fundamental issues and shape solutions to the overtly obvious challenges. Everyone in the private sector is acutely aware of the current situation because they work it and live it everyday. Yet in other, circles there seems to be a climate of malaise and denial.

Earlier this year a number of publications carried a statement attributed to the current chairman of the Barbados Tourism Authority during a press conference at the Hilton, quoting as saying ‘that the BTA had spent over BDS$250,000 promoting the annual Crop Over Festival which he said has been a major success’. As ‘has’ is in the past tense, after studying the long stay visitor arrival figures for July and August, this heady prediction appears woefully optimistic and grossly inaccurate.

Based on the provisional figures issued by the Barbados Statistical Service, July shows a decline of 18.1 per cent from the USA, 8.3 per cent Canada, 5.5 per cent UK, 10.2 per cent Trinidad and a staggering 20.0 per cent from Other Caricom. Overall a 12 per cent fall over the same period in 2011. August got even worse. USA down 12.8 per cent, Canada 2.4 per cent, UK 17.8 per cent, Other Caricom 16.0 per cent. While Trinidad and Tobago showed a growth of 4 per cent, across all markets there was a decline of 13.6 per cent when compared with last year.

When eventually released, it is difficult to imagine the figures for September are going to fare any better, with October and November traditionally being two of the most challenging months of the year. There also appears to be no news of the promised ‘fully integrated advertising campaign’ in ‘which Rihanna will be doing for her country that will be spread across social media and new media’ and scheduled ‘to be launched in September’. It is almost incomprehensible why this major investment of taxpayer monies has been held such a secret and not shared with the industry that generates the cash to fund it. Hopefully it will create a greater return on investment than the quarter of million dollars put into promoting Crop Over this year.

As we approach a general election, its difficult not to look back at the current Government’s 2008 manifesto and particularly the pledges made in respect to tourism. Not a single one of the eight stated objectives have been successfully implemented, including producing a tourism masterplan, re-structuring of the BTA or targeting the Caricom market more effectively. While the opposition talks about turning Barbados into a ‘5 star destination’, it doesn’t explain how and even if that policy decision was made tomorrow, how long does any rational or informed person think this would take?

In a globally competitive market, we are already so far behind many other destinations, with only a single truly five star hotel comprising of just 112 rooms. Sadly, the eroded viability of the industry, compounded by falling arrival numbers, average spend and rampant unbudgeted increases in operational costs have resulted in a lack of profitability. As a consequence many properties are unable to maintain their plant to a high standard, let alone upgrade.

The writing has been on the wall for a long time, and while some may be reticent to use the word ‘crisis’, I am not sure there is a more accurate description.

0 thoughts on “Tourism In Crisis

  1. A little off the topic here is news about the Port Ferdinand developer:
    Developer expands into Barbados
    Published: Sunday, October 14, 2012
    Staff Report
    Villages developer H. Gary Morse not only is building what is considered the fastest growing retirement community in the nation, but also has a hand in $750 million marina project under way on the Caribbean island of Barbados.
    Morse is a shareholder along with four others in the 15-acre Port Ferdinand marina project in St. Peter that will provide 300 jobs when completed. Ground was broken in 2009 and the first phase of the five-year project is expected to be finished by December. The first of the project’s 96 resort condominium units went on sale earlier this year.
    “Gary is no stranger to the Caribbean, having done developments in the Bahamas, Montserrat and Jamaica, and has been coming here to Barbados for the last 13 years,” said shareholder Bjorn Bjerkham, who is also chairman of Port Ferdinand SRL. “It is very heartening that a successful businessman like Gary Morse has the confidence in Barbados and in this project. The investment of Gary’s talents, resources and vast experience will help make this development a success.”
    Cracker Bay, the yacht owned by Gary Morse, the Port Ferdinand developer.

  2. @ Ac:

    You have OSA’s (aka a RT.ON) permission to go ahead and claim Port Ferdinand as a DLP project and success. After all that Port is not part of Barbados but Portugal or Spain and will not be considered part of Barbados right Hants?

    PS: especially to Hants. Would it be OK if the 36 hotels and tourism related properties that closed over the last 2 years or so were bought by Trinidadians would you and ac object to the sale by claiming that it is selling out Barbados to foreigners, especially Trinidadians?

  3. A Good morning to you Miller… are making me chuckle this early morn and it not only AC and Hants who have that mindset. Don’t you remember a fart called Vex wrote that Adrian and myself are crying down Barbados and that hotels are not closing BUT opening up especially in the Gap?

    This coming winter season will sink the ship if hotels do not give value for money and clean up around them. I had the pleasure of attending a wedding at Gaylords Palms in Orlando this year and I am sorry to say that those hotels here who like to think they are 4 stars to think again. The grounds and gardens were spectacular, the lobby areas were spectacular and the service was spectacular. Even the woman cleaning the toilets (a Guyanese) was extremely friendly,when when she heard that we were from Barbados she was even happier. I would like Hotels here to pay attention to their grounds and surroundings, that is the first thing guest sees when they arrive and it says everything about that hotel.

  4. @ islandgal246 | October 15, 2012 at 6:40 AM |
    “I would like Hotels here to pay attention to their grounds and surroundings, that is the first thing guest sees when they arrive and it says everything about that hotel.”

    Totally agree! Such housekeeping and maintenance are certainly within our abilities and do not require massive infrastructural investment and any easing of disappearance of any international recession.

    Similar housekeeping and sprucing need to done to the island in general. Barbados is looking real shabby and worn and in dire need of a facelift. Just like job interviews first impressions count!
    We need to act quickly and stop blaming the international recession for our own shortcomings and problems within our capacity to resolve. Bajans must stop this international recession bogeyman talk. It is 5 years now this dubious recession has been blamed for everything under Sun. It cannot be a recession any longer but merely a correction to the excesses and corruption and lies (financial and otherwise) Western economies have been indulging in over the last 15-20 years. And it will take a similar period or even longer to even out.
    It’s time Bajans get on their bikes and start working. The world does not owe us a living.

  5. Mr. Loveridge: Your concerns about tourism are sincere, I have no doubt. However, after reading your comments for some time, I note a kind of whining about what governments should or should not do. The truth is that most hoteliers in Barbados seem clueless to the reality that a product lagging at least twenty years behind modern day marketing models simply cannot succeed. The hoteliers have outpriced themselves. The majority of Barbadian hotel workers who go overseas do extremely well; our local chefs are doing very well. The problem is that the industry lacks good managers, , marketing professionals and is sadly lacking in most cases even at the basic level of property maintenance. They are not up to scratch. It is time that the people of Barbados pressure BLP/DLP governments to stop subsidizng the hoteliers and let them get up and get like everybody else. This corporate con game that the hoteliers are playing is the identical one played by the plantation owners in regards to sugar production and agriculture in general: BLP/DLP governments propped up the sugar industry while the owners invested their monies elsewhere..Today those same cry babies have: marinas , golf courses , retirement villages and upscale housing developments, condos and so on while the BLP/DLP were left with the corpse known as the sugar industry. This corporate con game played by the rich, affluent business class must come to an end in the interest of the entire society. Again I ask you one simple question that I posited less than a week ago: Why should we subsidise an industry that cannot even develop a proper website?

  6. Mr. Skinner, I appreciate your views, but I really don’t think you can paint all the hoteliers with the same brush. We deal with businesses of many kinds on Barbados almost everyday and frankly many of them do not deserve to be in business. The level of customer service is terrible, but there are exceptions. Also I think you are probaly right that we lack good managers in many cases.
    The BTA was allocated $92 million in the last fiscal year. Its an enormous amount of money and many are far from convinced that it is being spent in a cost effective way.

  7. Mr. Loveridge: Thanks for your prompt response. I urge you to continue sharing your views with the public and enlightening us. Too often in these
    small Caribbean countries, we have industry/corporate leaders, who do not exchange ideas , views or suggestions with ordinary folk. I agree that the $92 million is an enormous amount of money.and I join those who think it is not well utilised. Continued good luck with your personal ventures. From all reports, what you tried to do at Peach and Quiet was quite admirable..

  8. Mr. Skinner, Thank You. Almost 25 years ago, we bought what had become a derelict hotel for several years and the journey began. Its been a learning experience and we do not have many regrets. We are truly blessed to live on one of the most spectacular spots on earth.

  9. Adrian. Do tell us where the Min of Tourism gets his stats on the Tourist Industry from? Coming from his mouth, we keep hearing our tourism is leaping upwards but in the final analysis the country is in a decline and our Caricom brothers and sisters are doing a lot better. Just fooling us when a wine or liquor glass in your hand is not the answer.

  10. We need to always bear in mind that a great part of our problem is staffing vital tourism offices with party lackies/hacks. They have no idea and have never marketed or sold anything. When the governments/party change the revolving door is there for the next batch of arrogant yardfowls. I have gone to functions hosted by such agencies where I had to remind myself that they were actually attempting to market Barbados. We seriously need citizens to expose this level of cronyism that is the style of both BLP and DLP.

  11. Their is an interseting thing in tourism called leakage rate that has been too long on the backburner and and not focussed on enough in tourism discussions …I believe when it comes to the fore it would have us looking at tourism in a totally new light

  12. Tell me Why,

    I believe they are compiled by the Barbados Statistical Service from data collected on airport landing cards and cruise ship manifests.
    You will notice that the MOT has been very, very quite since the figures for July and August have been released.

  13. Do we still have a Minister of Tourism or has the PM taken over that ministry? Have heard NOTHING from Minister Sealy of late.

  14. @ Adrian Loveridge | October 15, 2012 at 3:01 PM |

    Do you know if the visitors out of the UK to join cruise ships for Caribbean tours are treated as part of the Island’s tourist arrivals and included in the “on-island” stay figures?

    BTW is your Peach & Quiet establishment the former Arawak Inn from the 70’s? Nice location, I must say! If only that southerly exotic beach front property could be twined with a renovated and upgraded establishment in the Cattle Wash area St. Joseph currently closed we could have a niche product that many visitors from Europe are looking for.

  15. USVI reports fewer visitors and more empty hotels rooms

    Published on October 16, 2012

    BASSETERRE, St Kitts (CUOPM) — The US Virgin Islands (USVI) Commissioner of Tourism, Beverly Nicholson-Doty, who was elected the new CTO chairperson last Wednesday night at the CTO’s Annual General Meeting in St Kitts, is taking over the regional organization at a time when the USVI had fewer visitors and more empty hotel rooms during the first six months of 2012 than in 2011.

    According to data released last week by the VI Bureau of Economic Research, which tracks airline and cruise ship passenger arrivals, as well as hotel occupancy rates, on a monthly basis, the figures for April, May and June of this year were released last week after delays caused by conflicting data and untimely reporting by some hotels.

  16. Hotel revenues hit as visitor numbers drop

    Business and leisure visitor numbers were down in the second quarter of 2012, resulting in a negative knock-on effect in the hospitality and retail sector.

    According to Government’s Quarterly Bulletin of Statistics, air arrivals during the second quarter of 2012 fell by 6.6 percent when compared to the same quarter of 2011.

    A total of 75,186 visitors flew to the Island, down from the 80,462 that visited by air in 2011. This decrease was attributed to a 12 percent decline in business travellers and a 13 percent decline in leisure travellers. Arrivals from the United States, Bermuda’s largest tourist market, decreased 7.8 percent when compared to the second quarter of 2011.

    The decline in air arrivals resulted in a 6.6 percent drop in bookings at tourist accommodations.

    Guest houses registered the biggest decrease, falling 32.3 percent.

    Occupancy at resort hotels fell by 10.1 percent while visitors staying at housekeeping accommodations also declined, by nine percent. Sales revenue for resort hotels dipped $6.8 million or by nearly ten percent.

  17. Miller,

    Yes! What is now P&Q opened as the Arawak Inn in 1973.
    As I understand, a long stay visitor can only be counted if that person spends a minimum of ONE night on Barbados. There has always been some doubt exactly how cruise ship arrivals by air and then transfered to a cruise ship are counted and shown in the statistics.
    Cruise ship numbers are counted by manifest number, so are not accurate as a substantial proportion (some say up to 25 per cent) do not leave the ship while in port.


    If you are going to spend time discussing Bermuda and the USVI, then lets also talk about St. Lucia, Jamaica, Aruba et, etc.


    • The Barbados Tourism Authority owes $42 million, according to the shadow Minister of Tourism.
      Does this include the $30 million Carnival Destiny loan?

      source: Adrian Loveridge

  19. @ David | October 17, 2012 at 6:55 PM |
    Doubt very much. The $42 million is possibly for current expenditure not loans backed by the government.
    With the hospital owing millions to creditors, NIS and Inland Revenue this country is in serious financial and fiscal free fall. And to think that only 2 weeks or so ago the MoF denied the government was having any serious cash flow problems.
    Not an election to be won in November by any party!

  20. My defintion of leakage rate is the rate of percentage of money leaked out of the country from tourism earnings. A leakage rate of 73% (the estimate for Barbados implies that 73 cents of every dollar that the country earns in tourism goes back out of the country. The money can go back out via imported inputs like food, equipment, personel and services (tour operators, airlines, foreign investors etc…). It is said that at this type of leakage rate the industry is not financially sustainable and has to be supported by government via either borrowing or using other money that came in via other industries. A leakage rate of 40% is the desirable rate for small open economies and this can be achieved by more local input into the industry were the money remains in the island for reinvestment as well as maintainence of the industry.

  21. Roverb,

    An excellent point and rarely considered by our policymakers.
    That is why we must reduce our dependency on tour operator driven business and increase DIRECT full rack bookings by using create marketing and images. I am also convinced that there is a far lower leakage rate with our 120 small hotels, where a higher percentage of the revenue remains here. That is why, at least in my eyes, that it is suprising that there is no part of the BTA budget dedicated to marketing our small hotels.

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