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.
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.