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Commentary: Tourism Matters: Government will eventually have to decide what it wants
Published on April 28, 2014 Email To Friend    Print Version

By Adrian Loveridge

It is now a full six months since companies trading under the Sandals Resorts brand were granted unilateral extraordinary concessions never before seen in the long history of our tourism industry.

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Adrian Loveridge has spent 46 years in the tourism industry across 67 countries, as a travel agent, tour director, tour operator and for the last 24 years as a small hotel owner on Barbados. He served as a director of the Barbados Hotel and Tourism Association, and as chairman of the Marketing Committee. He also served as a director of the Barbados Tourism Authority and is a frequent writer on tourism issues
Despite repeated assurances given to the entire remaining sector, once again implementation is sadly lacking and, as we enter the long eight summer months, the industry is left floundering to second guess pricing and marketing strategies that will help it survive yet another year.

Criticism is again levelled at some hoteliers for not passively submitting to the prices dictated by tour operators, which ultimately has led to further airlift losses from a market that is especially attractive in terms of average duration of stay. But pray tell me, how can any government official expect a single accommodation provider to agree fixed contract rates up to eighteen months ahead of arrival date, when they have no overall idea on what those rates are based?

It really has to reflect the height of lunacy when the remarks are uttered by someone who holds the ultimate prerogative power together with his cabinet colleagues to return the industry to viability.

Until this is done, the chance of competing with many other Caribbean destinations at the same level remains a distant dream.

Surely, by now our policymakers understand the basics of how the travel business is structured and the timing required to put programmes in place. As pointed out many times before, Barbados is an incredibly tour operator-dependent destination with many of the larger players being vertically integrated. Regardless of whether aircraft are leased or purchased, ultimately the cost of acquisition and operation has to be factored into the retail holiday offering. Long haul planes like the Airbus 330 have a list price of between US$216-239 million, so the thought of not devising proper utilisation, months if not years ahead cannot be an overly speculative or vague option.

Therefore as one of the major component elements, if the operator cannot reduce the airline seat cost, they have to look for savings in other ways to offer a competitive package.

Government will eventually have to decide what it wants. Tax the industry out of existence or put in place the reforms discussed over decades that clearly have made a significant difference for a solitary player.

Or apply them uniformly to alleviate the current national imbalance.

If there is more deliberation and delay by the administration, with any yet to be evaluated fiscal benefits from a late Easter, hoteliers and other direct tourism services will go into a cost saving mode. This inevitably leads to further unemployment and all the consequences that brings.

Compound this likely scenario with the thousands of job losses in the public service and it is difficult to believe that more business failures over the next few months are avoidable.

The release of arrival figures to the public seem to get later and later each month and up until this column was submitted, some markets were still to be correlated. However all the indications are that March 2014 will be down over the same period last year, marking a decline in 22 of 23 consecutive months!
 
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