“If you were aware of such a massive cut in Virgin’s seat capacity, would you spend so much of the available Barbados tourism marketing budget on a heavily discounted programme?”
Was the Barbados Tourism Authority blindsided when launching the new tourist subsidy?
Sometimes timing can be everything and that has left me to question the recent launch of the Barbados Island Inclusive promotion.
On Saturday 20th April 2013, the Minister of Tourism held a local media conference to launch the initiative, which according to reports is expected to cost a staggering 11 per cent of the annual budget of the Barbados Tourism Authority. Without wanting to repeat information already in the public domain, the objective is to drive an ‘additional’ 15,000 long stay visitors this year, who are expected to spend $30 million.
The following week the Minister then traveled to the United Kingdom, where, I believe, he met with several British travel interests, including both Virgin Atlantic Airways and Virgin Holidays. On his return, the Minister appeared on a 45 minute long CBC News Extra programme, where he was the only speaker. While TV8 clearly had a full hour available, no time whatsover was allocated to attending journalists so they could pose any questions, they may have wished to ask.
Personally, I think this was a huge mistake. It gives the impression either that there is no accountability and/or, it is not important to keep the public (and industry) fully and accurately informed.
Then just days later, something truly dramatic happened, that appears to have caught many major private sector local tourism players completely by surprise.
Virgin Atlantic brought forward their previously announced plans to change the type of aircraft operated on the Gatwick/Barbados from October 27th to 3rd May. At a stroke, that decision could easily result in the loss of between 36,000 and 40,000 seating capacity out of London by the end of the year.
Surely at the meetings the Minister would have gleaned what plans Virgin were in fact actually going to implement, just a week or so later?
After Virgin’s recently announced losses of GBPounds 93 million (US$141 million) for the last financial year ending February, which followed an operating loss of GBPounds 80.2 million for the previous one it is blatantly clear that that some rationalisation of the carrier was inevitable. Especially when you bear in mind Delta’s acquisition of 49 per cent of the airline in 2012.
As that’s when I have to come back to the timing. If you were aware of such a massive cut, which could remove one in four of the previously available seats on the route servicing one of our largest source markets, would you spend so much of the available marketing budget on a heavily discounted programme?
Nick Parker, the Caribbean Regional Manager of Virgin Atlantic was recently quoted ‘that the smaller aircraft does not represent a declining market, but rather targeting the high-end niche that is a priority for an island like Barbados’.
Many might agree. But why then are our policymakers committing such a large proportion of the available national marketing budget to subsidise visitors to the tune of BDS$733 per person?
And that is of course if the programme achieves stated targets.
Would it not be more cost-effective to raise overall destination awareness, including attracting more holidaymakers that would help fill the additional Upper Class seats available on the A330-300’s? Again, as pointed out by Mr. Parker ‘the Upper Class market can more withstand the APD’.