Stemming the Tourism Leakage

Adrian Loveridge - Owner of Peach & Quiet Hotel

Adrian Loveridge – Owner of Peach & Quiet Hotel

One of the areas I think that we (Barbados) have not done as well as we could have, is getting across to our various markets that many of our tourism establishments do in fact offer value-for-money. Over the years ‘we’ have spent hundreds of millions of dollars developing this image that we are, in some eyes, an iconic and aspiration destination. For many, I am sure that rings true, but with most of our main sources of business under considerable economic pressure, with an ever higher percentage of regular travellers having to consider the cost of their annual holiday, is there more we can do?

Personally, I really think so.

Many eminent people and agencies have written on the subject of the tourism leakage effect, which varies greatly, but some estimate could be as high as 80 per cent in the Caribbean. In very simple terms, it is what visitors spend on goods and services and the proportion that is re-exported to, in many cases pay for what they are consuming here. According to a UNEP (United Nations Environment Programme) report, the highest overall leakage is with all-inclusive package tours, perhaps not surprisingly. The Tourism Concern organisation also concluded that all-inclusive properties employ fewer people per dollar of revenue and have a smaller trickle down effect on the local economy. Our high dependency of tour operator generated business further compounds the inequitable situation.

So when our policymakers brag about annual tourism revenues of anything approaching BDS$2.4 billion, this graphically highlights the problem.  A far better analysis has to take place to ascertain the amount which actually stays within the destination. If ‘we’ are simply generating revenue, only to spend the majority of it on items that ultimately have to be imported and paid for in foreign currency, what are we achieving? It clearly would be almost impossible to reduce this to zero, but certainly there is scope to reduce the current percentage. Producing more of what our visitors buy is the obvious solution, which gets us back again to value-for-money.

I don’t believe for a moment that our visitors expect to come to Barbados and be served, as an example, Aberdeen Angus steak, assume it will taste better and perhaps most relevant, for it to cost less than they pay at home. Is this ‘our’ perception of what visitors actually demand or would they be far more amenable to sampling locally available items, especially if they were far less expensive?

Smart linkages to other sectors are absolutely critical to our fiscal recovery, in the shortest time. While this seems such a blatantly obvious observation, I don’t always see it working to the very best effect. It is estimated that approximately one-third of all tourist spending is on food, so agriculture seems the clear target to work with, to reduce imported consumables. But while this topic has been discussed at length over many years, progress appears slow to address this issue, perhaps because the sector appears fragmented and disorganised.

Is this just the perspicuity of those of us in the industry or based on the reality of the situation?

0 thoughts on “Stemming the Tourism Leakage

  1. Is the MOT living in cloud cuckoo land?

    ‘we have see some pretty impressive increases in the Canadian and Caribbean performance’ – Barbados Advocate 10th December 2012

    Now the reality:

    Jan-Aug – Canada UP 0.9 per cent – across all markets DOWN 4.8 per cent.
    September – Canada DOWN 5 per cent
    Trinidad and Tobgao – DOWN 22.4 per cent
    Other Caricom – DOWN 5 per cent
    October – Canada – DOWN 4 per cent
    Trinidad and Tobago – DOWN 18.5 per cent
    Other Caricom – 5 per cent

    • Thanks Adrian:

      Silver lining


      THE tourism industry continues to face challenges, but the assurance has been given that creative initiatives are being implemented to ensure the sustainability of the sector.

      This assurance was made by Minister of Tourism, Richard Sealy, during a church service held yesterday at the United Church of America Mount Olive marking the official start of the 2012 Tourism Week of activities.
      Despite these challenges, however, Sealy told the congregation that all is not gloom and doom for the industry.

      “I think that there is a lot that we can draw encouragement from, because while we have seen some dips and declines, we have seen some pretty impressive increases in the Canadian and Caribbean performance, as we seek to do things differently in tourism,” he said

      In addition, he noted that there are a number of activities that are intended to improve the experience of visitors as they come to the island.

      “We are looking at new niches and trying to get sports tourism taken to another level; we are trying to develop the heritage cultural and tourism niche; we are trying to develop the culinary tourism niche. There is a lot happening on behalf of the people of Barbados to ensure that we can sustain this industry,” Sealy added.

      He reminded that tourism also provides a number of critical linkages for other forms of economic activity. These, he said, include agriculture, renewable energy, and the international business sector to name a few.
      Minister Sealy also used the opportunity to thank those persons that have contributed to the sector over the years.

      “All of those persons who have been at the forefront of dealing with the most difficult economic recession the world has seen for at least 60 to70 years, they need to be acknowledged and saluted for what they have done and I do so not only on behalf of the Government of Barbados, but all Barbadians, because tourism is critical to the overall economic well-being of his country.

      Yesterday’s service was attended by a wide cross-section of industry officials, as well as delegates from the Barbados Workers’ Union.

      The Minister acknowledged the presence of Chinese Ambassador Xu Hong who recently took up office in Barbados, whom according to him, is determined to see China becomes a source market for Barbados’ tourism industry.

      “I hope in the not too distant future that we will see China as a source market, further diversifying our opportunities and again strengthening the capacity of the sector to withstand what is happening internationally,” he said.

      A powerful sermon at yesterday’s service was delivered by Minister Seon McKend who focused on theme “Blessed Assurance”.

      According to McKend, “When we talk about blessings, many people begin, and even Christians, begin to talk about their jobs, the success of their jobs, their children, their business, and these are all blessings that we must be thankful for, but not many people are able to say that I have the blessed assurance of God,” he lamented.

  2. Being REALISTIC David, what exactly is it that we expect from tourism?
    …that in a global decline we will somehow see continued growth?

    Bushie is a bit lost with these types of ongoing criticisms of our tourism. These things were also exactly true when the numbers were up….so it is not that we EVER managed the industry any better, just that mediocre results In a tight economy is worse than mediocre results in a strong global economy.

    Besides, you know Bushie’s position on tourism…. There is a VERY THIN line between pure tourism and outright prostitution…a line we crossed long ago.

    A tourism destination is one which has attributes which makes it a “must visit” for those who appreciate and can afford the cost of enjoying such attributes.

    A place that has nothing really to be proud of, but which spends huge sums on PR to entice the gullible – strictly for a profit…..well that is what happens in Bush Hill.

    Rebuilding tourism would involve taking steps to restore PRIDE in Barbados FOR BAJANS first, and also for guests.
    – clean up the damn place
    – remove the ugly, selfish buildings blocking the ocean view
    – build a unique, green, sustainable society and stop copying…
    – establish high standards of governance and lock up the thieves
    – bringing common sense back to education, government, industry…

    ….stupseeeee… This will never happen, the damn dog dead!
    We could as well start digging the grave…..

  3. Wait Peter Simmons was hospitalised at the same time notorious old onion bag went missing. Simmons recounts his stint at the QEH in yesterdays’s Sunday Sun he even praise the QEH as the greatest health care facility. Take a bow Donville. Was the QEH on Owen’s 15 point plan to be privatised?
    The notorious onion is back writing shoite on BU and Simmons is disharged from QEH.
    How much of a coincidence is that.

  4. @ David
    “….it is all we got therefore it behoves us to manage it in as effective and efficient a manner as possible.”
    …or face reality and come up with a backup plan… how we can EAT and meet real basics WHILE WE MAY STILL HAVE SOME OPTIONS.

    What is not to understand about riding a dying horse….perhaps we should get off his back and start walking a bit….the damn horse may even survive with the lotta fat lazy so and so’s off its back….

  5. @BT
    Being REALISTIC David, what exactly is it that we expect from tourism?
    …that in a global decline we will somehow see continued growth?
    Careful you might distort some peoples’ perception of reality, as of today Japan is officially in a recession. Let the cry go forth “Bring back Arthur” says he with tongue planted firmly in cheek.

  6. @Bush Tea & Sergeant

    There is a reality which many on BU have accepted a long time ago. The reality is that Barbados and the other islands are committed to the existing model and we will have to live or die working with it. Significant diversification in the time frame required calls for turning on a dime and political will. It is not going to happen. Our appetites stretched by consumption will not support it.

  7. This was one of the biggest areas of concern for Mr. Arliegh Sobers former CTO person who was to take up the mantle of that organization before his untimely death. I am happy the topic is being raised as we have to get real with our tourism. We need to get the optimized benefits from tourism and that can only happen when we raise the vital topics and find viable solutions to these areas of concern.

  8. Roverp,
    Thank you. Yours is entirely the response I was hoping for. If we are seemingly incapable of growing tourism over the short to middle term, then WE should be looking at implementable ways of retaining a higher percentage of ‘our’ earnings and significantly reducing what is imported.
    This seems like a much better way to soak-up unemployment and put more money back into the local economy.
    Personally, I don’t think this is rocket science, but it needs an enabling environment.

  9. I know for a fact that the Barbados Manufacturers Association (BMA) have been working with the Barbados Hotel & Tourism Assoc (BHTA) to try and get linkages between local hotels and manufacurers and farmers. It has already been proven that some of the local furniture makers are capable of providing some of the furniture for even the largest hotels. The problem is the usual one of “taking the horse to water”. Some hoteliers will go to great lengths to make sure that they can import all they need. As a result, government has mandated that, in order to benefit frm concessions, hotels must approach local manufacturers at least 6 months in advance of purchasing goods. Even then, certain financial “consultants” working for some of the largest accounting firms, have set themselves up to advise hoteliers how to avoid buying local. What is “good for Barbados” doesn’t even enter the equation. On the other hand, the hotel and restaurants are turning more towards locally-produced foods – it offers great opportunity for entrepreneurs in agriculture, especially in the market gardening area.

  10. This whole thing about buying local is an absolute “no-brainer”, and would most probably mean higher exports, as manufacturers are able to take advantages of lower unit costs coming from higher output. Why, then, doesn’t it work? Could it be that Bajans love Barbados but don’t like each other? Could this be the reason why they don’t want to buy a product that would give a job or better pay to a relative, friend or neighbour? It’s hard to fathom, especially when Jamaicans and Trinis support their own wholeheartedly, even to the extent of their government agencies blocking goods from other Caricom countries. I confess that I am unable to figure this out.

  11. Pelt
    So you mean you did not believe Bushie when he explained awhile back, that the main reason that many Bajan businesses were sold to outsiders was to avoid LOCALS taking control when it became clear that those of ‘the chosen’ were incapable of managing them successfully?
    Despite the protestations of Moneybrain who may well have experienced one of the only exceptions to this rule (after all he is a BU man and Bushie chooses to believe him), this is clearly the case.

    Wunna must know that we have some outstanding managers and entrepreneurs in Barbados. Problem is that these fellows get sidelined, vilified, and set-up, out of jealousy and spite…..

    …some run off to Canada, some to Florida 🙂 , …and some cool out in the bush ’til the fullness of time…..

  12. Honestly Bushman, I wasn’t going down the same road as you. I am talking about everyday ordinary Bajans choosing to prefer the imports, regardless of how poor they are in quality.

  13. @Peltdownman | Bush Tea

    So true you enter struggling little shops and eating places across the island they dont carry local Pine Hill products in preference to juices and products from Trinidad and Jamaica of poorer taste and quality ditto with beer you notice low income workers with scores of empty Stag bottles on tables even as they order more but not a Banks beer in sight . The list goes on.

  14. Why buy local when some of the stuff is pure crap i.e Pine Hill Dairy sweet water and shoite milk. Many people are buying local juices from local vendors at farmers markets and on the roadside.

  15. The speech by the Minister of Tourism was captivating about the plans for the future. I would like to know, what is Barbados’ unique selling proposition?

  16. I have been coming to Barbados for over 30 yrs from Canada. It has always been a very expensive island for me till recently. In 2002 it cost me about 1.60 canadian for every us dollar for the last few years it has been better than par. In 2002 close to 47000 canadians visited barbados what is it now 65000 even though our dollar has risen better than 50% against the us currency. There seems to be more of a problem here than the recession because Barbados is a much better deal for me today than 10 years ago.

  17. Bush Tea

    “that the main reason that many Bajan businesses were sold to outsiders was to avoid LOCALS taking control when it became clear that those of ‘the chosen’ were incapable of managing them successfully?”

    I could not have said better myself.

    The idea is to keep the wealth out of BLACK hands. That is why I part company with all those who criticise Trinidadians for owning so many businesses in Barbados. The former owners of 99.9% of the businesses now Trini owned and operated in Barbados were White Bajans. The Trinidadians did not come to Barbados and put a gun to any one’s head and demand their business they were offered to them by their former Bajan owners who dont look like me. Trinidadians are consumate business people always on the lookout for new ventures. It is not their fault that they found no end of White willing Bajans who wanted to sell them their businesses.

  18. David.

    ‘but’ – you must have watched a different five seconds short of 17 minute video that I did, as I cannot recall a single solution to the current crisis in tourism that the MOT put forward.
    I am really not interested about transvestites, but more about solving the many problems we have in tourism today.
    Meanwhile, THREE WEEKS after the event (Barbados Food Wine and Rum) finished and a week after the CEO/Chairman of the BTA ‘ad’ agency
    promised he would take it off (the national website) ITS STILL THERE. And the Canadian office of the BTA still refuse to recognise Newfoundland as a potential market.
    Does this sound like ‘we’ are on the ball and are we also going to blame this on the recession?

    • It was a tongue in cheek remark. The MoT said that tourism is meshed with international business and agriculture, that a comprehensive tourism plan is coming etc etc. He is talking the right stuff but…

  19. To Mr Loveridge true to form he and his experience as the owner of too small property is once again trying to appear as the sole voice of knowledge and wisdom on all matters pertaining to tourism, surely
    Mr Loveridge with your vast and best knowledge of matters tourism why not stop advising and make your hotel the most successful hotel known to the universe and stop whining and wingeing and fooling the public that you have every answer, the truth is you have no answers for if you did your hotel would be shining like a beacon and you nor your hotel stand out in any form or fashion.

  20. Ye keep criticising Adrian when all that he has said is supported by the numbers, and we are talking comparative numbers.


    Back to your comment about the unwillingness of other sectors in Barbados to buy local. This is obviously where the government must play a leadership role ie. If it regards tourism as a strategic industry. Know you don’t agree but it is what it.

  21. @David
    I don’t know why you think that I don’t agree, because government’s role in this is important, and it has acted in the case of hotels re-furbishing. But we can’t make government responsible for everything – we need to think for ourselves. We can’t go on complaining about how hard things are, and about unemployment when part of the answer rests in our own hands. Take Islandgal for example. Her comments above smack of elitism, as if she is too good to buy Bajan. Of course some products are not up to scratch, but it is our job to hold the manufacturers’ feet to the fire and to help them improve. So called “sugar water” from Pine Hill is no different to “sugar water” from Trinidad, so if you’re going to buy “sugar water” why not buy Bajan? As for Stag, well I can’t think of a worse-tasting beer, but it’s imported, so we buy it. You won’t find this attitude in either Trinidad nor Jamaica.

  22. “Take Islandgal for example. Her comments above smack of elitism, as if she is too good to buy Bajan. Of course some products are not up to scratch, but it is our job to hold the manufacturers’ feet to the fire and to help them improve. So called “sugar water” from Pine Hill is no different to “sugar water” from Trinidad,”

    Peltdown manhole…..You obviously didn’t read my post you so want to pull the trigger on me. I buy local from the vendors on the side of the road selling golden apple juice, sorrel, fresh grapefruit juice instead of the piss poor shoite from Pine Hill. I buy juices from the farmers market from local vendors. I will not support any manufacturer whether local or international if I find that their product is not up to scratch. You musse an IDIOT to talk such crap!

  23. I have in my freezer bags of home grown passion fruit pulp, carambola and mango pulp to make my juices. You gotta be an IDIOT Peltdownass!

  24. I am only a visitor so what I am saying might be rubbish but.
    What if apts were taxed less if they didnt have a full kitchen this would encourage more people to go out and eat. And that extra space could be made into another bedroom making it more affordable per person to visit.I dont think grocery stores are suffering.
    I have rented a car many times and always thought at the counter this is the time someone should be giving me a discount booklet on main attractions they already know I will be out driving. If I dont use them it cost nothing.If I do its extra money coming in.
    At home if a building goes into disrepair it is not long before it has to be torn down, but year after year I see the same buildings just sitting there falling apart rip them down if nothing else it will give you more views of the sea.
    One of the best ideas I have seen in a while is the boardwalk at accra just love it people using it all day thats great thinking

  25. @Peltdownman

    The government’s role is there to intervene in a situation that requires it. Existing people taste and attitudes will not change on its on. Comfort positions will NOT change happenstance.

  26. @ Lawson
    The problem with your suggestions is that they make basic common sense. However, as a matter of national policy, we have decided to dispense with that old fashioned approach.

    In Barbados, we leave all such decisions and actions to a government which is comprised of the least competent among us (those who could not manage to hold down a normal paying job, and were thus available to endure the abuse, degradation and shame involved in our elective politics)

    These suddenly elected and powerful politicians become experts at everything while focussing on one goal – to accumulate enough money in their 5- year term to be set for life.

    Ideas such as yours are discussed, consultants are hired and paid, expensive plans are drawn up, and unbelievable contracts are signed…. Then elections come around and we start all over again.

    The solution to our problems will NOT come from your common sense and well articulated suggestions, but from changing the system of electing IDIOTS to implement these ideas.

  27. @ lawson | December 11, 2012 at 8:13 AM |

    Thanks for your valuable contributions.
    Sorry to tell you this but you are whistling in the wind as far as this present government is concerned about the environment. But like me, continue to whistle. Some day it might get to unblocked ears.

    Hope you enjoy your stay especially on the Boardwalk of which you speak so glowingly; and keep coming for our sake.

  28. Another Premier arrested on corruption charges

    The Cayman Islands has been thrown into political turmoil as officers from the Royal Cayman Islands Police Service (RCIPS) Financial Crimes Unit (FCU) swooped down on the home of Cayman Premier McKeeva Bush in the early hours of this morning to arrest him.
    According to the Cayman Islands News Service, Bush was arrested at around 7.00 am this morning (December 11) at his home in West Bay on suspicion of theft in connection with financial irregularities relating to the alleged misuse of a government credit card.

    This allegation adds to a list which includes breach of trust, abuse of office and conflict of interest, contrary to S13, S17 and S19 of the Anti-Corruption Law 2008 respectively.

    Allegations also include the importation of explosive substances without valid permits on or before February 2012.

    In April this year, a statement from the RCIPS revealed that the premier was the subject of three different police investigations.

    Two of those related to financial irregularities, one of which surrounds a letter sent by Bush to Texan developer Stan Thomas back in 2004 asking for $350,000 to settle a matter relating to a land deal and zoning.

    The third police probe, according to the police, was connected to an unlicensed shipment of dynamite that had arrived in Cayman.

    At that time members of the business community expressed growing concerns over the impact that alleged investigations into Bush’s actions could have on the reputation of the Cayman Islands as a international financial services centre.

    We in Barbados can only dream.

  29. Think on these Things | December 11, 2012 at 6:37 AM

    you hit the nail right on the head.

    why wont he go back to England and help up there where he came from. The english are struggling. someone as “brilliant” as he would be a real asset to England in its time of need.

    Why bother with us poor peasants down here in La La Land.

  30. OK….. I have read 10/20 comments and im a little “dizzy” now but in simple terms (and my humble opinion) you all need to take a long hard look in the mirror at what you doing to your main industry…… ask your self would I come to Barbados and spend $150 USD on a meal for 2, wine $30 USD a bottle and then get fleeced via the taxi to/from the venue to an already over priced and in need of repair hotel….. and then to be greeted by a bunch of unhappy staff…. i guess not!
    The solution is simple….
    CARICOM food traded between islands ZERO duty… why do bananas in Barbados cost three times the amount of what the UK pay for instance… yes ZERO duty… All food imports should be reviewed and if farmers want to bid to supply a “quota” at a fixed cost the government will buy and distribute to the stores (at sometimes a loss but heh) and then consumers get these products VAT free as CARICOM goods… all other food produce will be 10% Duty that is imported…. this will encourage Bajans to eat better, meaning a happier and healthier nation…. so less a strain on the Health Service and more energized to serve the needs of tourists… oh and food in restaurants will be cheaper!
    The Next Solution will be to abolish income tax in Barbados….. WHAT i hear you cry… the vast majority of small business don’t pay a cent of income tax and still expect the garbage to be collected, the police to protect and the hospitals to look after them and the present system is just not working….. but in order to make the short fall increase VAT… im not a figures man and I don’t have the resources to collect such information but how much extra $$ has been raised this year from the VAT increase as apposed to the amount collected in income tax?

  31. I must be honest that I really set out to buy bajan at every occasion that is possible but it becomes very frustrating with the quality.
    Take for example guava jelly. The Barbadian companies put in so much pectin in the jelly that it cannot be paste onto bread because it is like plastic jello. The Trinidad Jelly is a much higher quality and therefore I buy it because of an inferior bajan product..

  32. Can anyone on this blog point out where any Minister of Tourism linked tourism with agriculture after independence?
    Every Minister of Agriculture since independence has failed to get agriculture up to the point where it could provide local products to the hotel sector in a meaningful way.

    This Blog must get the discussion going on agriculture and its role in food security for Barbados. Stop saying how brilliant the present the Minister is and beg him to put his brilliance to work PLEASE.

  33. If I had to coose between believing ADRIAN LOVERIDGE and the Minister of Tourism, give me the Minister Of Tourism any day.

  34. Carson. Only in Barbados persons such as Mr Loveridge can engage on every subject in the area of Tourism, be critical of all and everything at times not engaging in investigations to support his mouthings.
    In competing destinations such as Bahamas, Jamaica and St Lucia he would not be so vocal. Let me add that he does have industry expereinec but I am convinced that he blows his own trumpet too much. A Bajan!

  35. It should be noted that the some of the suggestions about linkages and sustainable tourism were present by Andrew Lewis in the 1970’s. We take too long as a country to do important things as we are too caught up in being small minds discussing people.

Leave a comment, join the discussion.