Adrian Loveridge: Tourist VAT rate reduction an excellent move… but what about LIAT’s poor management?

Credit where credit is due.

Adrian Loveridge, small hotel owner - now selling!

Adrian Loveridge, small hotel owner – now selling!

I commend the Government for lowering the rate of VAT on ‘hotel accommodation’ and especially extending the same 7.5 per cent to the Direct Tourism Services.  This should relate to meaningful savings for our visitors and even, to a lesser degree, help encourage domestic tourism.

From the various social media sites it is already clear that regular repeat guests will be watching very carefully that all tourism partners benefiting from the reduced tax level will pass it on.

Restaurant dining, car rental, reduced attraction entrance fees, activities like catamaran cruises etc., will all be more affordable and hopefully the overall spend will not fall significantly across the board. The critical element now is to get this improved value for money into the market places, by every means possible.

Linking particular months with events, especially in the longer leaner periods, at first makes logical sense – but I think this concept has to be constantly analysed, to ensure any national ‘investment’ is proven to be cost effective.

This year with Crop Over is a classic example. Despite all the predictions and post event accolades, July 2013 recorded the lowest number of long stay visitor arrivals across the last 11 years in any same month.

Last week I touched on our tourism performance in September 2012, so today I wanted to cover land based arrivals for the same year in October and November. Both again, alarmingly recorded their lowest comparable monthly figures during the past decade.

November, which was already down 9 per cent or 4,233 persons less when compared with 2011, is especially concerning as substantial funding was ploughed into the Barbados Food Wine and Rum Festival.  You have to ask the question if projects like this do not substantially increase numbers, average spend and stay. You have to ask what are ‘we’ doing wrong?

While all these ‘concepts’ need time to reach potential, considering the festival at that time was in it’s third year ‘we’ appear to be light-years away from the prophecy that it could ‘be one of the biggest foreign exchange generators for Barbados’.

This year in addition to this event there is another Rihanna concert, which hopefully will make a positive difference. But if we are partially relying on regional visitors to guarantee its success, let us hope that LIAT has its huge challenges under control by then.

Taking an almost brand new aircraft with a book price of US$19 million, out of service for at least a week to replace an engine – while at the same time chartering the other ATR to the President of a country that your largest shareholder (Barbados) does not recognise, has to raise questions.

As a result leaving hundreds of taxpaying passengers who guaranteed the loans for the new planes, abandoned across the Caribbean.

Again, in the budget substantial further funds have been promised to the Barbados Tourism Authority over the next 18 months for debt repayment, marketing and promotion.

But with the touted loan not even in place yet, it’s clearly going to take some time to effectively implement, meaningful and responsive programmes which stand a chance of making a positive difference.

The result appears almost inevitable; that we are going to enter another winter with the prospect of declining arrivals and perhaps just as critically, reduced revenue, profitability and occupancy.

This is not painting a doomsday scenario, but an attempt to send a wake-up call to our policymakers and that we can no longer keep on doing things the same way and expect different results.

Adrian Loveridge

3 Comments

Filed under Aviation, Barbados, Barbados Tourism

3 responses to “Adrian Loveridge: Tourist VAT rate reduction an excellent move… but what about LIAT’s poor management?

  1. Wily Coyote

    Barbados taxpayers will continue to foot LIAT’s bills and incompetence, that is until Barbados is BANKRUPT, which is just around the corner.

  2. Anonymous

    Lets be positive you have a beautiful island we will come visit Things will get better

  3. FearPlay

    After having this post up for six days and getting only two responses, one would have thought that BFP could be more current with national events by now. Nothing on the minister of education’s latest rant, nothing on the tax impositions, nothing on job losses, nothing on …… and the list goes on and on!
    BFP, have you deserted us… or are you averse to encouraging comments on your party of choice?