I’m about half way through this video of SoCo Hotel owner Ralph Taylor talking to a BLP meeting last Sunday the 12th of January 2014.
Mr. Taylor tells it like it is, but so far his analysis is missing two factors:
1/ There’s no money left after 20 years of BLP and DLP larceny, neglect and stupidity.
2/ Investors aren’t staying away in droves just because of the numbers: they know that Barbados governments have burned many foreign investors through broken promises and non-payment.
Nonetheless, it’s worth listening to Mr. Taylor, who starts in with how bad things have been in Barbados in terms of declining hotel rooms (and thus declining investment) for the last 34 years…
Number of Hotel Rooms 1980 and 2014
Country 1980 2014 Average Growth Hotel Rooms
Jamaica 10,000 30,000 486% for Jamaica, Cuba, St. Lucia
Cuba 7,226 57,000
St. Lucia 1,245 4,900
Barbados 6,680 5,400 -20%
“We are still not getting new hotel development. We must ask ourselves, why are we not getting this new development?
The reality is that investors are looking firstly for adequate returns on capital, and then all other factors are considered.
When there was a big hue and cry over the concessions to Sandals, my contribution to that debate is that I have long advocated that tourism is an export industry, and therefore its input costs must be free of duty.
Tourism is a global business. That means that all of the hotels in the region have to compete on a global scale. If a hotel in Cuba, Dubai, can build a hotel room for eighty thousand US dollars and have the finest furniture and fixtures, and a similar hotel room in Barbados is going to cost three hundred thousand dollars, the following factors will unfold:
- The investor is more likely to choose that destination, whether it is Dubai or wherever it is.
- The hotel in Dubai can enter the market at a more competitive price than the one in Barbados.
- The returns on investment in the Dubai product is likely to be significantly better.
- The consumer will get a better bang for their buck, thereby guaranteeing a higher level of occupancy for the hotel and ultimately Barbados will be the loser.
The concessions offered to Sandals are what every hotel in the country should have. This should be immediately put in place for all hotels. It would have to make the industry profitable and deliver the levels of returns that would interest new investors to Barbados.”
… Tourism expert Ralph Taylor in the video above.
Quick listen: 6:40 to 10:40