The Adrian Loveridge Column – Increase Tourist Spend Required
While there has been enormous negative feedback mostly through the social media by repeat and first time visitors to Barbados concerning the imposition of several new taxes, it may not all be bad news.
The decision to ‘blend’ the former Barbados Tourism Product Authority into the Ministry of Tourism could enable additional resources to once and for all systematically identify and licence all accommodation offerings to ensure they meet every essential requirement for health, safety and liability.
As the vast majority of visitors arrive by air, it will also mean that in many cases those visitors who choose the Airbnb type of accommodation will be directly contributing towards the marketing of the destination through the second airline departure tax or airline travel and tourism development fee, collected in the price of the airline ticket.
In June last year the Prime Minister announced ‘it is anticipated that this measure in a full fiscal year will realize $95 million. $75 million of this amount will go to the Barbados Tourism Marketing Inc., and Barbados Tourism Product Authority and the remaining $20 million will go towards regulation of tourism, civil aviation and our shareholder responsibilities to LIAT’.
In addition to the second departure tax, there will be a shared accommodation levy which is expected to raise $8 million, a room rate levy of $47 million and a Direct Tourism Service (DTD) levy of $3.9 million.
Hopefully the quoted $8 million Shared Accommodation Levy will go a long way to finally regulate and identify every individual lodging provider and ensure they meaningfully contribute to all the other taxes currently paid by the more traditional accommodation sector.
It must also be apparent to our policymakers that increased arrival numbers do not necessarily equate to higher overall tourism revenue. Reduced average stay, trading down accommodation choices, lower currency exchange values and higher on-island prices being charged across the industry all adversely impact on the overall contribution to the economy.
And if anyone thinks for a second, that this is fanciful speculation, then log onto sites like Barbados TripAdvisor Barbados Forum and read the feedback from repeat visitors, which will give a graphically better understanding.
It is obvious, that many cherished returnees, increasingly feel that we are rapidly losing perceived or actual value-for-money and that they can obtain far more for their Dollar or Pound elsewhere. A family of four they will be paying somewhere upwards of US$400 or GB pounds 320 more this year for an identical holiday they experienced last year and this is before you even take into account any increases in the flight segment cost or checked bag charges on airfares.
Perhaps, there is less price hike resistance in the peak winter months, but as soon as Easter passes, many of our hotels and other lodging options will collectively have hundreds of empty rooms. The worst case scenario is to have another extended hot summer in our main source markets this year to dampen demand.
Improved value-for-money is not a fanciful concept, It should be an absolute prerequisite objective goal to use as a powerful marketing tool during 2019, if we have any hope of increasing, not just arrivals, but average spend.