Adrian Loveridge: Chase higher revenue independent tourists, not cheapo all-inclusive mass tourism

Tourism MATTERS

by Adrian Loveridge

Two headlines quoted from the recently held Caribbean Tourism Organisation’s Leadership Strategy Conference leapt out and grabbed my attention. The first ‘You have to chase money not arrivals’, attributed to David Redekop of the Conference Board of Canada. The second from an unnamed ‘specialist’ who advised ‘the region should therefore focus shift marketing from the all-inclusive traveller to the higher revenue independent traveller’.

Both in my humble opinion make absolute sense from a Barbadian tourism perspective.

Just over ten years ago, I sat on a Ministry of Tourism convened committee made up of private and public sector persons looking at ways that the small hotel sector on Barbados could be improved.

During that time one of the ideas I conceptualised, was a project entitled 10/10.

We then had around 120 registered small properties. We use the Caribbean Hotel and Tourism Association definition of a small hotel as being 75 rooms or less.

But from a Barbadian perspective, if you add the total room stock of this sub sector and then divide by the number of properties, the typical size is just 22 rooms.

A plan to boost revenues and occupancy rates

Our hotels generally achieve an average overall annual occupancy rate of around 50 per percent. The plan behind 10/10 was to increase that to 60 per cent and to raise every occupied room rate by US$10 per night.

Adrian Loveridge - Small hotel owner

This would be have been achieved by the use of creative marketing together with systematic reduction of bookings generated by tour operators and to a lesser extent, travel agents.

This would not been a dramatic change, because typically small hotels are not a high priority for these travel distribution channels, for all sorts of reasons.

If the objective was met, it would increase, across the board, every participating property’s yearly turnover by 32 per cent and clearly impact on profitability, allowing at least some of those hotels to upgrade and re-position.

Even based on an average room rate of US$100 the US$10 increase would generate another BDS$30 million annually into the economy and BDS$2.25 million in VAT for Government.

That’s of course, that’s just the accommodation revenue. Based on a average 7 night stay it would also produce another 27,000 plus long stay visitors each year with all the spending that would bring to our restaurants, car rental agencies, attractions, activities and shopping.

Bear in mind that this concept was conceived prior to the explosion in the use of social media, so if anything, the plan now has a greater probability of success.

Sadly, the 10/10 plan was never adopted or implemented nationally.

Our little hotel did apply the concept, enabling us to achieve way beyond the projected occupancy level for ten consecutive years.

Not only that, but the additional revenue generated has allowed us to plough proportionately significant sums annually into improving the quality of the plant even during the worst global recession in eighty years. (Editor’s note: Adrian’s hotel is Peach and Quiet. That’s the beautiful view and pool at the top of the article)

Barbados Government neglects small hotels

Currently, no proportion of the Barbados Tourism Authority budget is dedicated to marketing the majority of our small hotels. The Intimate group, which does receive a Government grant, represents slightly less than half of all our registered smaller properties.

The remainder are left to flounder or succeed, almost entirely from their own efforts.

7 Comments

Filed under Barbados, Barbados Tourism, Business & Banking

7 responses to “Adrian Loveridge: Chase higher revenue independent tourists, not cheapo all-inclusive mass tourism

  1. Peltdownman

    Adrian
    How do you get over the high airfare for individual travellers as against the all-inclusive?

  2. Adrian Loveridge

    Peltdownman,

    Most of our guests go through a consolidator like Newmont Travel or Caribbean Reunion Club (CRC) and they are currently paying about UK Pounds 500 including ALL taxes out of Gatwick or Manchester.

    We cannot calculate exactly, but about 20% of our total guests use MILES.

    The use of miles concept is something I have been trying to get the BTA to embrace for years. Sadly without much success, but
    the London office did try it for a short time with reduced miles and I understand it filled about 5,000 seats. They recently offered a 50% reduction in MILES needed with Virgin.

  3. Rumboy

    The way to go Mr Loveridge, you are correct.

  4. Environmental Planner

    Thanks for this article Adrian. For years now tourism studies show that the eco and heritage tourism markets are expanding and the sun, sea and sand tourism market is contracting. Eco and heritage tourists also spend more money per vacation than sun, sea and sand tourism especially all inclusives who spend the least and flock in droves.

    If we are going to be serious about protecting our environment and the precious resources that we have why not consider this option!?

  5. Green Monkey

    The sky-high flight tax: Families face rises of up to 55% in levy on holidays from UK airports

    Airport tax will leap by up to 55 per cent from Monday, adding hundreds of pounds to the cost of family holidays abroad.

    The increases in Air Passenger Duty (APD) for all flights out of UK airports, which come into force next week, will push up the tax on a family of four’s trip to the Far East or Australia by £240 to £680. Those in economy face an increase of £120 to £340.

    Sir Richard Branson’s Virgin Atlantic airline yesterday warned that the rises will make family holidays ‘unaffordable for many’.

    British Airways chief executive Willie Walsh has branded APD a ‘disgrace’, while organisations from Ryanair to package holiday firms to the Association of British Travel Agents have lined up to condemn it. APD was initially introduced as a ‘green tax’ on the basis it would discourage people from flying and cut carbon emissions.

    However, it has become a cash cow for the last government and the Coalition, with annual revenue set to rise from £2.3billion to £3.8billion by 2015.

    Read more: http://www.dailymail.co.uk/news/article-1324685/Families-face-rises-55-levy-holidays-UK-airports.html#ixzz13koDo3fe

  6. Green Monkey

    Here’s another good reason to market Barbados to the wealthier travelers. The rich folks can come by private jet, and therefore they presumably won’t have to put up with passing through the new irradiating, nudy picture machines or suffer through unwelcome, intimate feelups and gropings of private parts by the TSA security officials as is now happening at airline passenger terminals across the USA. As a consequence of these more “intimate” and intrusive pre-boarding search procedures, increasing numbers of the unwashed masses and peon class are turning against air travel in the US and refusing to fly by commercial airlines unless it is an absolute necessity. And if you think this is just a US thing, just you wait a while would be my only advice.

    Excerpt from a letter by a Hawaii resident to the Honolulu Star Advertiser:

    Reuter’s just ran a poll asking people if the new intrusive security screenings at airports might affect their decision to fly.

    As of this writing, 97% of respondents replied that they would indeed change travel plans to avoid terahertz scanners (now known to damage skin DNA and increase the risk of cancer) and the highly intrusive body searches.

    I had a caller into my talk radio show yesterday who used to work in Berlin before the fall of the USSR and she reported that crossing Check Point Charlie into East Berlin was nowhere near the hassle of getting through a US airport, and that the Russian soldiers were quite polite and respectful compared to TSA workers. You know your nation has hit rock bottom in the dictatorship department when the Soviet guards look better than TSA!

    It is time to face facts. Hawaii’s present economic disaster is directly attributable to the destruction of tourism caused by the TSA. I grieve that none of our state leaders have the moral courage to stand up and denounce this charade that is strangling our state’s tourism economy. Although the papers may proclaim that all is well, my wife and I took a stroll in Waikiki recently, where newspaper platitudes cannot conceal the numerous commercial vacancies and sparse crowds. Compared to Hawaii as it was when my wife and I first moved here thirteen years ago, Waikiki is a ghost town.

    And TSA is to blame.

    Continued at:
    http://whatreallyhappened.com/content/are-new-security-screenings-affecting-your-decision-fly

  7. Green Monkey

    More on the rising tide of anger among air travelers in the US at the “new and improved” TSA security procedures at US airports. (A video followed by viewer comments.)

    http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385×524892#525095