BTA’s plan is too little, too late to impact the rest of the tourist high season

Price slashing a poisoned quick fix?

by Adrian Loveridge, small hotel owner

Under the banner headline ‘BTA working on tourism plan, says Elcock’ and carried in 4th November edition of the Sunday Sun, the chairman of that organisation was quoted as saying ‘that plans are in the works to boost tourism numbers for the remainder of the year’.

If the quotation is accurate, it begs the question: What on earth could you possibly do at this late stage to dramatically improve 2012 arrivals, even if ‘plans’ were already in place?

The article also mentioned that the Minister of Tourism and BTA Chairman was part of a delegation attending the WTM (World Travel Market) in London last week. The United Kingdom, despite the fall-off in visitor arrivals, is still hanging on as our single largest source market, but numbers are just part of the equation. You also have to evaluate exactly how that business is generated and it remains predominately tour operator driven.

Before moving to Barbados, I owned and ran a tour operator business in England for twelve years, so have some intimate knowledge of how they function there. Planning is done way in advance, for pretty obvious reasons. Even a small aircraft like a B737 can cost US$89 million and that’s before considering all the additional costs including maintenance, crewing, fuel, airport charges etc.  So it’s simply not feasible to have it sitting around on the tarmac.

The larger operators own or lease their own aircraft but the smaller ones buy blocks of seats on scheduled or charter airlines. Accommodation has to be contracted with a lead time sufficient enough to market the package, either through High Street travel agents or online.

So if a destination can have any meaningful impact on ensuring those committed seats and beds are filled, it has limited ways of achieving this.

Raising the profile of the destination can help, but if the more traditional ways are used (for instance by advertising in various media options) this can be incredibly expensive even if the national marketing agency has the funds available. Another way is to stimulate demand by pricing – or put another way, discounting the product offering.

As late as 26th April, the Governor of the Central Bank of Barbados was predicting growth in tourism for this year. Included in the three pillars that would make this happen, (and mentioned several times) were the developments at Port Ferdinand, Four Seasons and Merricks Resort. We now realise of course that two out of three of these projects are not going to make any meaningful contribution whatsover, at least for 2012.

After a ‘lacklustre’ summer, any possible recovery seems almost totally dependent on a profitable, but short, four month winter season. Even in normal circumstances it’s a huge gamble – but the situation is anything but ‘normal’ with many tourism businesses economically hanging on by their fingernails.

While several industry players have been outspoken, citing eroded margins caused by unbudgeted increases in operational costs, their cries have largely been ignored by the policymakers.

What this winter offers for many of these enterprises is the bare possibility of survival, so discounting cannot be the solution. Without wanting to sound too dramatic, if tourism enterprises are forced to take this path of price cutting, it could be the recipe for disaster.

The predicament is that the ‘planners’ have left it so late that there may be no practical alternative if a business wants to survive to fight another year.

31 Comments

Filed under Barbados, Barbados Tourism

31 responses to “BTA’s plan is too little, too late to impact the rest of the tourist high season

  1. Why don’t some of these same hoteliers who have benefitted so handsomely over the years not come together and find funding for their own benefit and stop sucking the milk of the taxpayer through government corruption. Run ur own show, the majority don’t and will not benefit from this scam

  2. Well Another View

    Well well, look around at the majority of hoteliers in the island. Most have had to sell their properties to land developers over the past years or close their doors. If they were doing so great do you think they would have sold their profitable business’? The fact is that the hotels have not given the returns that would have let them reinvest back into properties and upgraded the “Barbados” product to the level we are competing with internationally. Another reason is the high cost of doing business in our island – the hotels (and by extension the guest who are the finals ones who really pay) are very heavily taxed (Water / Electricity / Land Tax / VAT etc – ask any hotelier what their electricity bill is and how much of that is VAT and Fuel surcharge) by our government to pay for all the social programs we the people enjoy – so their is a direct benefit to you and every one of us.

    We presently have a tiered hotel / tourism product and have no vision in sight as to where we want to be in the next 10 years as a country and how to get there. No one is going to continue to invest more money into a sinking industry if there is no end in sight. And that includes cleaning up the crime problems that are so obvious – look at St. Lawrence Gap in point / beach harassment is at an all time high.

    Finally, this government has allowed the BTA to fall into a state of confusion so nothing is happening there – pretty much like everything else in this island. And this whole Rihanna “push” that the minister of tourism talked about on CBC Monday night (when he embarrassed himself by announcing how great this tourism push would be with one of the reasons being that “Rihanna has a million followers on Instagram but I don’t not even know what that is”) will be very interesting to see how it unfolds. So far on Rihannas Facebook page (the prominent area of the tourism push with 63 million followers as stated by the minister) has these ads that link to another facebook page that really has nothing that would make me want to travel to this island or any way to make a booking – the top photo is a fishing boat on land filling the whole picture – take a look for yourself. Also, I wonder if they have really studied Rihanna’s demographics as to who her followers are – if we are marketing to the worlds teenagers who don’t have any money to spend then what are we doing? And look at all the comments under these various threads on Facebook – no one talks about Barbados. I just don’t have the confidence anyone in the BTA (from top down thinks of these things seeing how they manage right now). We will have to see how that goes only time will tell.

  3. Adrian Loveridge

    Well Another View,

    Thank you for such an objective and informed post.

  4. yatiniteasy

    Its sad to say but Four Seasons and Merricks will not have any impact on Tourism in 2012, or 2013, and probably not in 2014 either…they have not even started to build (really) and we know how slowly construction takes, even with well funded projects.

  5. Nanny Whine

    @ Adrian

    YOU ARE FIRED!!!!

    Have the BTA split the board into two segments, did they ever get back to you to join either? NO, YOU WERE FIRED.

    I HEAR YOU USED BEHAVE LIKE A RIGHT ASSHOLE AT BTA MEETINGS WHEN YOU WERE A BOARD MEMBER, WHY? DON’T YOU KNOW KNOW THAT YOU CANNOT BEING LIVING IN A GLASS HOUSE AND THEN WHEN IT SUITS YOU GO OUTSIDE AN THROW STONES AT THE SAME VERY GLASS HOUSE?

    YOU ARE FIRED!!!

  6. Adrian Loveridge

    Nanny,

    REVOKED is the word you are looking for along with eight other BTA Directors, who were also not put on the mythical product board as promised by the MOT. If you mean that I asked questions when on the BTA board, then I plead guilty. I understand there is something called DUE DILLIGENCE and that Directors have a duty and responsibility to ensure decisions made, are in the best interest of the organisation and taxpayers.

  7. Adrian Loveridge

    Nanny,

    Barbados Advocate 3/18/2009 ‘Changes at the BTA’

    ‘Speaking during the tourism media briefing at LESC, Sealy said the former directors had not been disgarded as they had ALL received invitations to be part of the new tourism product development company’.

    You see, the invitation is in the post.

  8. sith

    The problem of lack of tourist arrivals has a mostly to do with how expensive Barbados is in relation to international standards. At the moment, Barbados simply can not compete with other destinations. A lot of this has to do with a overvalued currency and government deficit spending. Without a long term fix to these two issues it is difficult to see how investment can be made to improve the Barbados product and bring it up to the level of its competitors.
    If nothing is done arrivals will continue to decline resulting in depletion of foregin exchange reserves, higher unemployment, and a reduction in the standard of living for all of us.

  9. 225

    I’ll say it again…Elcock is a dork who is more concerned with feeding at the public’s pig trough of money and remains unconcerned at the absolute absence of marketing ideas for Barbados in his pinhead.

  10. Nanny White

    @ Adrian

    Fired, revoked, the effect is the same. The Cabinet decided they didn’t want you around the peoples place anymore because you were a humbug and nothing constructive was originating from you. It was Adrian Elcock and Michael Greenidge who wanted your ass gone and when the Minister cross reference those complaints with management and staff of BTA he was advised that you were totally incompetent and useless.

  11. Adrian Loveridge

    Nanny,

    It shows ill- informed you are. When was Adrian Elcock appointed Chairman and who is Michael Greenidge?

    And WHY were the other eight Directors revoked/fired?

  12. eleemosynary

    These blogs sometimes become quite brutal. “Well well” writes an interesting article representing what he has seen over the years as a citizen of Barbados. “Well Well” is honest with his remarks. His remaks make hotel owners uncomfortable. “Well another view” is representative of the Hotel industry where greed is probably the obsession. “Well another view” is conidered to be highly accurate in his/her remarks by Adrian. No one wants to listen to the opposing view.
    I just stumbled unto an abstract written in 1992 and the writer asked two questions about the Barbados tourist industry. ?1, Has hotel expansion been too rapid in the attempt by these countries to earn foreign exchange? ?2 What is optimal capacity in the hotel industry for these economies? And finally a statement, “It is clear that travel abroad cannot continue to grow indefinitely and that eventually there will be a slowdown in tourism growth”.
    There was a 20 year period in Barbados when arrivals grew by about 600%. If you were myopic enough to think that this growth would continue into the next century, then you deserve an empty hotel. Numerous hotel destinations have slowly deteriorated and have been replaced by more modern locations where there is value for the dollar. In many hotel destinations you see the boarded-up windows. Barbados is too expensive and decisions on travel destinations is made based on price. Stop being a hotel owner for one day and try to place yourself as a visitor to Barbados. You bury your heads in the sand as it is easier to blame the Government. You will ultimately destroy the industry.
    I also wonder what Barbados would be like if there were no taxes – vat or whatever. Would the hotel owners be complaining about the old airport or the quality of utility services to their hotels or the condition of the roads. I have a feeling Adrian would be bringing these issues to our attention and belittling the Government for its poor performance.

  13. Greg

    I wonder why many people choose to blame Adrian instead of trying to face the issues? It’s the old case of shooting the messenger, especially if he’s a white foreigner.

  14. colour neutral

    @ greg

    think the white foreingner pretty much sums it all up…he never gonna be right

    fuuny ole world racism seems like will never go away…yet we all the same and breathe the same air.

  15. 173

    Nanny White you are SUCH a rawsole.

  16. TWWIFOS

    “think the white foreingner pretty much sums it all up…he never gonna be right”

    Exactly. Shame that we all have to suffer because of it. :-{

  17. Well Another View

    Hi eleemosynary, thanks for your assessment.

    Well wells remarks are very myopic as he tends to look at things from his own side but not recognising that tourism is our major foreign currency owner / tax earner & employees the majority of people in this island either directly or indirectly. Why should any business man invest into something that there is no support from every one in the “community” that is going to benefit from the investment – are you that naive?

    My point however was that just look around and ask yourself – why is it that we cannot attract major hotel chains (and don’t name the Hilton because we all know that is really a Government Hotel and Hilton has a guaranteed management contract / money tied up there) or that most of the hotels around this island are gone or not up to international standards. How would you fix that? What would you do? Who needs to do it?

    I also do agree with you on lets look at it from the visitors point of view. So what are your ideas here too on how to get the industry going again? What and who has to take action? In my above post I outlined some of the difficulties that need to be remedied – what do you think the problems and solutions are?

    And please don’t tell me the hotel industry should take things into their own hands – for your information they are doing their own bit right now as no one else is. Bearing in mind they are paying heavy in taxes for the same marketing support they should be getting from their government. Maybe that money should go back to them so they can market themselves. I am sure the money would get spent better than what is happening right now.

  18. Well Another View

    Oh and regarding Nanny Whine,

    Barbadians need to start standing up in boardrooms in this island and asking the difficult questions. Then we probably would not have another CLICO scenario or in this case a BTA scenario. We need people like Adrian that will stand up and ask questions and make managers / chairmen etc answerable for their actions and feel uncomfortable in their chair so they know they are being watched and are answerable for their actions – this is what we are missing because we don’t want to offend anyone. Keep at it Adrian!!!

    Right now we have a government that disassembled the Barbados Tourism Authority to a point where it is falling apart. Adrian was not fired, he was just a casualty of a poorly executed plan that was not thought through by our government. Oh and don’t take my word about the BTA falling apart, just ask any one in tourism or a major airline or tour operator outside of Barbados what is happening at the BTA.

    We as Barbadians should be really angry!

  19. I remember in the 70s and 80s wen millionaires were made from tourism wen the taxpayers did not have to pay. ITS OVER, WHY IS THAT SO HARD TO UNDERSTAND. Some of these hoteliers need to go out there and find real jobs instead of waiting for good taxpAyers dollars to be thrown after the bad already wasted. I plan to go on vacation in a few and it will not be bim because its now TOO EXPENSIVE, I will go where I can get more bang for my buck.

  20. Well Another View

    Thanks for making my point.

  21. eleemosynary

    I wish people would leave race out of the discussions. I know Adrian is white because his picture is posted and I must say kudos to him for being strong enough to discuss issues and in some cases to pester. Comments however from people who do not self identify through race and just use their time to muddle the discussion through race is a sign of cowardice. Shame on you.

  22. repeat visitor

    I work in a multi-cultural, multi-ethnic place, and grew up in a mixed race environment (not in Barbados), which is maybe why I sometimes have trouble appreciating all the longstanding racial issues which appear to be surfacing even here on this forum which is supposed…supposed to be about issues. As a visitor to Barbados, for the past 20 years, I can say your lovely island is missing the boat. One million Canadians visited Cuba last year and only about .5 per cent of that number (50,000?) came to Barbados, if I recall. That means something is wrong because having been to Cuba, I can say the the beaches, food, everything is subpar—but cheap. Same with Mexico, Jamaica, etc. Here’s how I see it: Barbados has been foolish in allowing the condo-ization of the island, there’s little appreciation of how to develop or keep visitors and now, despite the island’s beauty and that of its residents, it will be crying out for visitors.

  23. Wen u think bim is the last island on earth and tourist have nowhere else to go, refuse to stop expensive imports or use brain power to reinvent and capitalize that is wat u get. Years of refusing to change how business is done, just sit on hands waiting. Good luck

  24. International Tourism up for 2012?

    Meanwhile back on the rock, the BTA fiddles while the rest of the world gets on with the business of tourism!

    http://dtxtq4w60xqpw.cloudfront.net/sites/all/files/pdf/unwto_barom12_06_nov_excerpt.pdf

  25. Adrian Loveridge

    There has been a lot of speculation about this particular column, so I just want to re-state the facts.

    During the 4 years (2008/2009/2010 and 2011) Barbados averaged 546,533 long stay visitors per year.
    During the 4 years (2007/2006/2005 and 2004) the average was 558,632.

    A fall of 48,396 over the previous 4 year periods.

    Comments have been made that the average stay has been increased but to offset this you also have to include average spend to be objective.

    For instance, according to the Central Bank of Barbados ‘tourism value-added January-September 2012 declined by 3.7 per cent’.
    Also the CBB is now referring to average stay in terms of days rather than
    previously reporting number of nights. This of course, could make a substantial difference.

    Again, to me its not about partisan politics but who is best able to successfully manage our tourism industry.

    I know the first comments will be, but there is a global recession. If this has had such a worldwide negative effect then it would be more widespread among our competitors, including those (our neighbours) in the Caribbean.

    It is sad once again, race is brought into the equation, and its difficult to understand why educated people continually seize on the messenger, rather than the message.

  26. eleemosynary

    I don’t know the exact number of hotels in Barbados but let’s just say for discussion 115 hotels. With the loss of 48,396 visitors over 4 years, one can guesstimate that each hotel is loosing about 0.29 visitors per day. If there are more hotels, then this factor is decreased. Without looking at what other hotels are doing or what the goverment should be doing, I think each hotel understands that .29 represents a large revenue loss and should focus and formulate plans on how these .29 visitors per day can be recaptured.
    Price, Service and using the concept of “word of mouth advertising” would be my starting point. Each person who comes to your hotel should have such a great experience that there is a willingness to return and also to tell friends about their experience.
    Hotels have to also seriously look at price. In the context of room rates, there are usually four factors that impact the price customers pay. Competition, the cost of building the room, Occupancy and Management. Usually competition and occupancy are the factors that push the room rates up without consideration of value. What is happening in Barbados is hotel rates are high but there is no value for the price. It is like paying a luxury rate for a Days Inn accomodation.
    Service is easy. 20 minutes every day have a service moment. Research have shown that most employees do not know what good service is and must be constantly trained in this area of business.

  27. Training being the key word in the above comment. There is a serious lack of training and retraining across the board in the caribbean and bim in particular. Don’t know wat goes through the money grubbing minds of these hotliers but they may not have to complain so much if they would train their hotel employees to respect guests regardless of skin tone and don’t act as one skin tone is entitled to better service than the other, u will find more visitors appreciating and wanting to return, that attitude and displAy of ignorance is a real turn off even for the targeted ‘entitled’ visitor. Get ur acts together and stop with the plantation mentality. The world is moving on and leaving all that idiocy behind, so everyone can benefit financially. Don’t complain wen no one wants to come to bim because u stubbornly want to continue the 16th century experience. I think I wrote everything in english now to get it through those hard*ss heads.

  28. The dreamer

    Dear “repeat visitor”

    I am a dark bajan living abroad…let me tell you the truth.

    Barbados is a strange place with strange people. The island is deeply divided in two: the ones that realize how important is to have foreign currency coming in the Island and they cooperate with visitors and foreign investors.
    The other side, instead, hate whoever is not a bajan and/or black. These people like the money but don’t like who is bringing the money. Most of them are barely “tollerant” on visitors or fereign investors/workers.

    You probably would say that this second group of barbadians are shortminded or idiots…I just say they have a nasty attitude, fully emerging in their workplace. It is a very dangerous mentality that should be fought by any serious Government because, if prevale, would reduce the beautiful Bimshire in a “banana republic”, abandoned by any investor.

  29. There needs to be training across the board starting with the hotel owners and managers, trickling down to hotel employees, once they stop seeing the money of paying guests as having skintones, that is one hurdle jumped. The laid back nationalistic laZy attitude will present a challenge since its now seems to be part of the DNA make up. Who will start working on these things since everyone is in their comfort zones and think these problems will fix themselves. The hotel owners now think the taxpayers who don’t make millions from tourism should be the one keeping their doors open, broken down so that the haughty and arrogant can understand, it is the end of the road for the leeches.

  30. Adrian Loveridge

    well well,

    I am intrigued, do you include myself and wife as leeches?

  31. Of course, am sure u made money over the years, cause if one year passed without profits u would be crazy to stay open, no business person in their right mind does that. Now its not working anymore for u wat with high costs and whatever, a true business person would quickly diversify, not wait on government which equates to waiting on taxpayers money. I think u get the picture. Tourism as it was known before in bim is dead, the taxpayers back has been broken over the years, there is nothing left to suck, move on. I blame the governments over the years through thei own laziness allowing the minority hotel owners to become totally reliant on taxpayers money. This is sounding worse and worsean it has to end.