So entirely contrary to all the heady rhetoric that the introduction of Sandals brand will drive additional airlift, from their closure on 1st April for major renovations, in fact the exact opposite will happen. At least until the re-opening slated for December 2014. Quoting their own projected occupancy of an average of 85 per cent with a typical stay of 7 nights and two persons per room, that’s almost 500 lost airline seats per week or a mind boggling 16,000 plus by the end of this year.
Will this further destabilise the remaining carriers that continue to service Barbados and lead to yet more airlines cutting routes or reducing capacity?
Tour operators, already unable to match demand with the high cost of doing business here are considering switching flights to other destinations where they can glean a profit. Once again citizens are left speculating whether our Government was aware and factored in the almost nine months closure with hundreds of hospitality employees being thrown on the unemployment pile, before granting unilateral extraordinary concessions to the group.
Perhaps, they calculated the NIS and income tax contributions collected from local construction workers hired for refurbishment would more than make up for this. Clearly the state is not going to collect other taxes like VAT and import duties from Sandals, as they have all been waived. Most materials used will also be imported, so a substantial percentage of the estimated US$65 million project will simply re-export foreign exchange (FX).
Several other issues also have to be considered. The lost revenue to our Direct Tourism Services with included package components like golf green fees, catamaran, diving etc. There is secondary spending on submarine excursions, taxis, car rental attractions, activities, shopping, the list goes on, that 16,000 plus extra visitors would have generated. Over $1 million will not be collected in airport departure taxes alone.
And of course, it does not end there. Sandals are now switch- selling clients who booked for Barbados to other resort locations, including our neighbours St. Lucia and Grenada, helping to reinforce and increase their airlift, to the detriment of ours. The Chairman’s comments and various travel trade press or general media releases that I have read, did not offer the option of transferring to another hotel on Barbados. But if a full refund is in fact being offered, then this may partially mitigate some of the damage.
From studying the TripAdvisor Barbados Forum comments it is also clear there is a risk that once switched we stand the chance that at least some may not consider us as a destination in the future.
In the real world there are always consequences equated with decisions and policies, but in this case it is difficult to comprehend that any Government would, at a stroke, create chaos in their single largest FX earning sector, without invoking a plan B. I am sure ultimately Barbados will end up with a substantially improved hotel at the former Casuarina/Couples. But at what cost to the entire tourism industry along the way?
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