Airline Partnership opportunities gained, lost and possible

Adrian Loveridge – tourism expert, hotel owner

With any number of uncertainties there can be very few other businesses like airlines which present a constant indeterminate challenge.

It only seems a twinkle ago since massive controversy hit the media over the sale of the valuable Heathrow slots by the now defunct BWIA for what many felt was an under-valued GB Pounds 5 million to British Airways in 2006.

In 2011 the current Trinidad and Tobago Prime Minister, Kamela Persad-Bissessar commissioned a forensic management audit which concluded that a fair market value for the slots then ranged from GB Pounds 23 million to GB Pounds 44 million in a report dated 8^th May 2012.

Then with a blaze of glory in 2012 it was announced the replacement Caribbean Airlines was going to return to London, but this time flying into Gatwick.

Last week according to AirwaysNews.com, Caribbean Airlines (CA) will return its Boeing 767 fleet to lessor ILFC (International Lease Finance Corporation) during the first quarter of 2016, axing the Gatwick route and these aircraft will join the Air Canada Rouge fleet soon after.

This year, the airline has already returned two Boeing 737-800 aircraft with two more that are set to go soon. This will reduce the fleet to twelve B737s while retaining all five ATR 72 equipment.

Since the re-birth of the carrier, it has been difficult to follow what if any substantial part they play in supplying airlift to Barbados, specifically for inbound tourism and I probably am not alone into thinking ‘we’ as a destination do not have the best of working relationships with them.

Can this be changed or improved on specific routes, perhaps with a Barbados/Fort Lauderdale service or would this further alienate the existing legacy and low cost airlines? 

Can Barbados successfully tap the exploding Chinese tourism market?

Chinese tourists at Cricket World Cup 2007

Adrian Loveridge – tourism expert, hotel owner

The name Wang Jianlin may not resonate with you, but according to the South China Morning Post he is the richest man in China and recently announced plans to build the world’s biggest tourism enterprise which will overtake the current giant, Disney.

The chairman of the Wanda Group stated that his holding company will achieve an annual revenue of 100 billion Yuan (one Yuan currently equals .16 US Cents), attain annual net profits of US$10 billion and handle 200 million visitors by as early as 2020.

At this stage he has not ruled out entry into the aviation segment after China lifted a five year restrictions on applications for new airlines in 2013 ‘spawning a wave of privately owned start-up carriers’.

To even try and understand the exponential growth, Wanda’s in house travel agency revenue is expected to reach 10 billion Yuan this year, 20 billion by 2017 and 40 billion by 2020.

Last month Wang together with Tencent Holdings and Citic Capital led a US$967 million acquisition of ticketing website, Ly.com, which is currently the country’s third largest online travel site in terms of revenue generated.

The Wanda Group includes the ownership and/or management of over 70 luxury hotels, the world’s largest cinema operation, 110 plazas, 22 million square metres of leasable property, film and television production, substantial print media interests, art investment with total assets exceeding US$85 billion and spanning across four continents.

Barbados needs Hotwiring

Adrian Loveridge – tourism expert, hotel owner

Last week I used a couple of web based hotel booking sites to reserve some accommodation in Charlotte and Kentucky for an upcoming trip.

One of them, Hotwire, offers a variety of star rated lodging where you do not actually know exactly which property you are staying at until pre-payment is made in full.

The advantage to the hotel is that they can hopefully dispose of unsold inventory, albeit at a lower than rack rate, a sales model known as ‘opaque’ and the guest benefits by getting a superior room at a discounted price.

As an exercise I used the same site to look at applying it to hotels on Barbados and was surprised to see a whole range of accommodation options from as little at US$64 including all taxes per night room only and as little as US$242 all-inclusive for two persons.

Hotwire makes their profit from a percentage, which I am told is between 20 and 25 per cent of the transaction amount.

It at least partially dispels the largely held myth that we are always an overly expensive destination, when comparing lodging choices. 

American Airlines and US Airways members a vast, untapped market of over-worked folks who need a Barbados holiday!

All work and no pay!

Adrian Loveridge – tourism expert, hotel owner

A recent survey released through the U.S. Travel Association (USTA) and conducted by Oxford Economics concluded that last year, American workers walked away from US$52.4 billion in unused vacation time, forfeiting a total of 169 million paid days off.

The amount of vacation time American’s take as a nation is currently at a 40-year low. USTA stated as recently as 2000, the average US worker took roughly 20 vacation days a year. By last year, that had fallen to 16 days adding ‘for most workers wages and income have stagnated since the recession’, which perhaps gives an insight why.

In a related TIME article, the findings of another survey, conducted by Harris Interactive for the job and salary site Glassdoor, says ‘we’ (Americans) only take about half the time off we’re entitled to, and 15 per cent of workers who get a vacation don’t take any of it.

But should we deduce that economics is the sole reason? Again quoting Glassdoor, absolutely not!

Questioning people who take vacations only to work through them (which about six in ten workers do), a third of respondents said they do so because nobody else can do their job and about 20 per cent said they do so in the hopes of getting promotion.

Does this belief have any credibility?  

Santander study names Barbados as most expensive destination for British tourists

Lots of beaches, sand, surf, sky everywhere. Why should Brits pay more for Barbados?

Wonderful. Just what we need ’bout this island.

BFP pundit Adrian Loveridge has been pounding this subject for years. Looks like nobody has been listening…

UAE and Barbados most expensive destinations for British holidaymakers

The UAE and Barbados have been ranked the most expensive destinations for British tourists in a new survey published by Santander.

According to the report, the two destinations cost Brits more than £100 per day in spending money. By comparison, Poland and India are the cheapest destinations, costing just £30 per day on average.

These figures do not include the cost of hotel accommodation or flights.

With a direct flight to Barbados costing an average of £3,136 – flying out on 27 July, the busiest week of the summer – a couple going away for two weeks could expect to pay around £12,900 for their summer holiday, once accommodation is included, the report stated.

… continue reading the full report at Travel Daily UK

Weak Canadian dollar brings challenges for Barbados tourism industry

Adrian Loveridge – tourism expert, hotel owner

It is already more than halfway through the year and this is a time perhaps that our tourism policy planners are focusing on what marketing strategies can be effectively put in place to build on the first quarter increase in visitor arrivals.

As always, it is almost impossible to accurately predict what is going to happen in our global marketplaces and how that could impact on numbers, average stay and spend.

Important issues include the fall in the value of the euro earlier this year and whether this will be further impacted with the eventual solution to the Greek crisis. What effect will the first Conservative British government budget since 1995 have on the disposable income of most Brits? And finally, there is increased speculation about an impending recession in Canada, just at a time we were experiencing improved arrivals and airlift.

Having lived in Canada for some time, I know there is a psychological threshold when the Canadian dollar falls below 80 cents compared to the United States dollar. Naturally, Canadians then start to question whether they are truly obtaining value for money at holiday destination choices. It becomes an imperative to clearly demonstrate that we can offer a competitive product by at least attempting to reinforce component parts of the tourism industry that are more affordable.

While we will never be able to compete with the mass tourism regional offerings like Mexico, Dominican Republic, Cuba and alike, Barbados still has a myriad of more affordable accommodation choices. Of course lodging is only part of the equation, so personally I think there is room for a re-DISCOVER-like promotion specifically aimed at the Canadian market that helps minimise the currency value differential, which include not just restaurants, but attractions, activities, car rental and shopping.  

Will Sir Richard Branson’s Virgin Cruises base at least one new cruise ship in Barbados?

Sir Richard Branson – lucky old bastard! *

Adrian Loveridge – tourism expert, hotel owner

While the concept was rolled out some time ago, the details were largely announced in a media conference which took place at the Museum Park in Miami last week.

Never shy of dominating the global limelight, Sir Richard Branson announced that Virgin Cruises should have three brand new Italian built ships in the water by 2020, each with a mid-size capacity of 2,800 passengers and around 110,000 gross tons. www.virgincruises.com

I will not insult readers to guess the planned colour of these new vessels and it perhaps sets new parameters for the cruising industry, opening it up to a whole new market with a brand that is among the strongest on the planet. The placard statement ‘let’s make waves’ emblazoned on the arrival helicopter carrying Sir Richard said it all.

Virgin will have a huge marketing advantage by having its own airline and through the joint holding it has with Delta Airlines, the United States second largest carrier.

The first ship will operate out of the Port of Miami, the cruise capital of the world, with a quoted throughput of 4.8 million multi-day passengers in 2014 operating 7 day Caribbean cruises.

But there is an incredible opportunity for Barbados – if we can make it happen. With the Delta flights servicing two of the largest airports in the USA, Atlanta and New York and Virgin Atlantic proving the only scheduled carrier to operating direct flights out of two major British hubs, Gatwick and Manchester, could the second or third ship, homeport from Barbados?

This would give travellers a myriad of holiday options. Fly from the UK to Barbados, cruise to another island and fly back to England from there. All with the same airline and cruise brand.

By enticing Virgin Cruises to Barbados, it could directly benefit us in so many ways. Stay and cruise options, provisioning and higher employment on the ships with more ‘locals’ are among the potential.

So what could persuade Virgin Cruises to position one ship here?

Of course there are historic precedents of subsidising selected tourism partners.  

Increased taxes and costs are killing tourism. Barbados government actions “simply defies rationale”

Adrian Loveridge – tourism expert, hotel owner

I had hoped to dedicate this week’s column to the new measures put in place announced in the 2015 budget to stimulate spending, especially in the tourism sector.

Unless I missed something while trawling through the 57 pages, not a single ‘incentive’ has been announced that would be likely to encourage increased domestic spending across the sector.

Conversely, many could fairly claim that the additional $200 million in taxation annually will further restrain people’s ability to take a ‘staycation’ or enjoy one of many excellent restaurants.

Government Broke: VAT refunds two years past due.

In fact private sector led initiatives like the re-DISCOVER dining promotion have been forced to scale down any paid promotion, due to the continued inability to reclaim due and payable VAT refunds, now overdue for more than two years. This in itself is ludicrous and short sighted as many of the participating restaurants do not qualify and are unable to apply the reduced rate of 7.5 per cent VAT, but obligated to pay the higher 17.5 per cent rate.

So Government could be easily losing up to $2 million a year in lost taxes. Add the duties and taxes lost in the included wine element and that figure could well be significantly more, let alone the employment this promotion generates.

Until we witness some real actual sustained recovery in tourism, it is very difficult to comprehend why any Government thinks that increasing taxation and operating costs will reduce the time it takes to attain that objective. 

Incentive Travel another opportunity for increasing Barbados tourism… but will we make it happen or just talk?

“When implemented successfully, incentive travel can be a powerful influence of productivity, profitability and loyalty.”

Adrian Loveridge – tourism expert, hotel owner

One of the first and largest groups I brought to Barbados was back in the Nineteen Seventies – 72 people in total which included salesmen, their partners, distributors and the company’s senior management. While the firm, Cavalier Caravans, was headquartered in Sweden, it had a substantial manufacturing plant in the Eastern English port town of Felixstowe, which was at that time growing into one of the largest container ports in the world.

The company found itself in a situation where both production and sales were concentrated into particular months and they desperately wanted to try and level the disparity, allowing better control of manufacturing unit costs.

It was easy to identify the month of September, for all sorts of reasons, as being the month that stood out as recording the least number of sales and smallest number of caravans actually being built. We sat down and devised a simple incentive scheme, that if each salesperson exceeded their annual sales target and which were invoiced in that month, they would ‘win’ a 10 day/9 night holiday, each for two persons to Barbados.

To say it was a resounding success is a huge understatement. I quickly learned that travel and experience was a far greater motivation than taxable pay.

When implemented successfully, incentive travel can be a powerful influence of productivity, profitability and loyalty. 

Talk, talk, talk. Does anybody really do anything with new economic and tourism ideas?

Adrian Loveridge – tourism expert, hotel owner

The Inter-American Development Bank (IDB) was kind enough to invite me and a large number of representatives from both the private and public sector to a half day discussion forum last week.

To quote their own documentation the objective was to ‘Maximise Bridgetown’s economic and cultural activity’ by leveraging ‘existing institutions (tangible and intangible) and infrastructure (historic buildings and public spaces)’ by garnering ‘support from the local business sector to diversity night-time (after 6 pm) economic and cultural activities’.

Creative suggestions from the attending group flowed like flood water but towards the end of the main session there was one sobering observation by a member of the assembly. He mentioned that he had not heard more than one new idea over the last twenty years.

And that is where the reality kicks in. As a country we do not lack the vision or identifying practical projects. Where we seem to fail dismally is the implementation.

The same person suggested that we needed a fulfillment ‘Czar’ and that comment is probably the one which will stay with me for the longest time out of the entire four hour duration. Whether any administration has the ‘intestinal fortitude’ to make this happen without giving the job to yet another political crony, I seriously doubt, but we can perhaps live in hope. 

Loveridge: A competitive world means businesses must perform or fail

Adrian Loveridge – tourism expert, hotel owner

From a tourism perspective and many other sectors, it is almost impossible to comprehend how so many businesses seem to think they can trade to an optimal degree without maintaining a fully functioning and up-to-date website and/or Facebook page.

Also surprising is the number of local companies who take to the air via radio or in print with ‘ads’ promoting new products, but have simply not thought through any potential consumer response, especially in terms of disseminating details like price, sizes, varieties and availability.

Do they realistically think that possible buyers are going waste time trying to extract the details in a protracted phone call and that’s assuming that the person on the other end actually knows anything about the item(s)?

Of course there are notable exceptions, but certainly in my experience, frequently emails are not either answered at all, or days go by without a timely response.

In case some have not noticed our world has become increasingly more competitive and many ‘buyers’ simply will not wait for prolonged periods, when often they have responsive alternatives a simple click away. 

AirBNB an unstoppable Genie out of the Bottle – Barbados had better deal with it somehow

Adrian Loveridge – tourism expert, hotel owner

Let me be among the first to congratulate a Minister of Tourism for embarking on a personal visit to all the hotels in his domain. He was quick to point out that this was not meant to be an inspection visit but rather a ‘familiarisation exercise’ to view ‘each and every tourism establishment first hand, to witness their successes and deficiencies and to meet with the hotel staff to find out about their challenges and working conditions’.

Personally I believe that this is absolutely critical if you are going to fully understand and guide an industry which dominates any country’s economy.

At this point I should make it clear that we are talking about the Seychelles, not Barbados.

Alain St. Ange, their Minister of Tourism was also accompanied by Anne Lafortune, the Principal Secretary for Tourism and Seychelles Tourism Board Chief Executive, Sherin Naiken and at the time of writing this column they had already visited 114 hotels. No mean achievement, when you think that the destination has various accommodation offerings spread across 16 of the 115 islands which make up the territory.

Over the last few months I have ‘discovered’ a whole range of tourism accommodation on Barbados that I never knew existed and am frankly pretty sure that many of our tourism planners are not aware of as well. 

How many tourists use Air Miles to travel to Barbados? We should know!

Adrian Loveridge – tourism expert, hotel owner

Way back in 2001 we registered a business name and established a website domain under the trading title of MILESCloser.

 The idea then, which still has not changed, was to target the hundreds of millions of frequent flyer members who largely use their accumulated miles on vacation or holiday travel.

One of the impediments to growing the United States market especially, has been the reality that because we are a little further away from key source market cities. Inevitably airfares are often more expensive, resulting in the overall cost of the ‘vacation’ making it more difficult when competing with other destinations.

This is especially true with non-gateway departure points. A good example is Minneapolis-St. Paul to Barbados where the current cheapest bookable fare online in October or early November is US$761 economy return. For the same dates the miles required are just 25,000 and US$60.60 in taxes.

So by getting rid of the perceived ‘high’ airfare, we then only have to compete on accommodation options.

Gone are the days when you only earned miles by flying. In fact it is now almost the entire opposite. Most miles are gained by non-airline purchases.

The first major airline loyalty programme, American AAdvantage now boasts over 1,000 partners who offer miles simply by selecting a method of payment.

Among these are financial institutions who offer huge mileage incentives to sign-up with particular brand name credit cards, which in many cases grant sufficient miles on application for the first flight, without any or a very limited level of purchasing.

By selectively using a miles earning credit card to pay every day bills, it is surprising just how quickly the numbers mount. Personally I have not bought an airline ticket for myself for some time, but have currently amassed nearly 600,000 miles. 

Fifty years of advice for Barbados Junior Minister of Tourism, Chloe Walker

Adrian Loveridge – tourism expert, hotel owner

While this column has never been about individuals, I celebrated a milestone birthday a couple of weeks ago and could not help but spend a little time reflecting on the fifty years that I have largely spent in the tourism industry.

Different people evaluate success or what the definition of it differently and there can be nothing wrong with that.

My introduction to the world of commerce at a very early age was driven not so much by any desire to become fabulously wealthy with all the associated trappings, but more by the basic need to fend financially for myself without the benefit of sustained further education, as a result of a prolonged illness.

Looking back, I learnt very quickly and by the age of 21, I had already become the majority shareholder and managing director of four companies which employed scores of people. This is not a boast, but a simple fact.

By the time I reached 24 years, I had been offered the position of executive chairman of a substantial British tour operator. After turning the job down, it is almost impossible and probably totally futile to speculate on what difference that move would have made to my life.

Not that long ago I experienced a public admonishment by someone that can only be described as successful and it got me thinking of what exactly was the attraction that has kept me in this industry virtually all of my adult life. On reflection it never was about the money, but the means to travel and experience a world of differing cultures, architecture and experiences.

Now having past retirement age who knows what opportunities lay ahead.

It seems that it takes almost a lifetime to acquire sufficient skills and knowledge to effectively make things happen. And when you hopefully reach that point, is there is still sufficient energy, drive and desire to use it productively for the greater good?

Decades ago, naively I thought I could change the world. Nowadays, my goals are somewhat more realistic and but perhaps stand a greater chance of ‘success’, whatever that really means.

One thing for sure, very few objectives can be attained without help and I will be eternally grateful to those who have looked beyond the petty partisan politics and purely focused on what positive differences can be achieved.

Junior Minister of Tourism, Chloe Walker

I would also like to congratulate our new Junior Minister of Tourism, Chloe Walker, and plea with our policymakers to give her more than just superficial exposure to decisions taken within the sector. One way, even if it’s just in an observer capacity, would be to let her attend the frequent Barbados Tourism Marketing, Product Authority and Hotel and Tourism Association board meetings.

With the stated intention of increasing our e-commerce and social media presence in all source markets, a bright young and fresh contribution could add meaningful value to any plans yet to be implemented.

So Chloe, if you read this column and I could proffer just one piece of advice…

If you make this industry your chosen career, remember that success is not always measured by the number of private jets and yachts you have. For many of us, just making people feel very special and appreciated, is more than enough reward.

Time to resurrect re-DISCOVER the Caribbean

Adrian Loveridge – tourism expert, hotel owner

One of the most difficult and painful decisions I have ever made was to cancel our last re-DISCOVER the Caribbean Show some years ago, which had become a highly successful annual event spanning over seven years.

As well as highlighting and driving new interest in Intra regional travel it was also used as a catalyst to build trade between the islands. It also brought almost around $1 million of foreign exchange into Barbados, filled scores of hotel rooms, generated significant car rental business and helped keep our multitude of restaurants busy, during a traditionally quieter off-season period.

If you were among the thousands of people who visited the show over the two days it took place each year, you would have met representatives from up to 22 participating territories, from Surinam in the south to Jamaica in the north and almost everywhere in between.

What finally prompted the final resolve to stop co-ordinating the show was the reduced funding by the then Barbados Tourism Authority, which even at its peak, represented less than 10 per cent of the actual cost…

Plus the sad realisation, that they could not find two or more of their staff to ‘man’ a stand for the duration, out of what were then over one hundred employees. 

Discover Card to partner with Barbados

Innovation pays off for re-Discover programme

Adrian Loveridge – tourism expert, hotel owner

I am frequently surprised and occasionally humbled by some of the people who read this column. Out of the blue a couple of weeks ago, I had a call from a senior executive of the Illinois based third largest credit card issuer in the United States, with a quoted 47 million card holders.

He had been following some of our tourism initiatives and wanted to see how we could ‘partner’ to help increase their brand awareness and acceptance on Barbados.

Of all our major markets the United States has, for the last decade, been one of the most challenging. Until the 2014 figures are published the industry at large can only speculate about any real recovery last year.

But what we do know though is that 2013 recorded the lowest number (120,584) of long stay American visitors over the past 11 years.

So clearly, there is work to be done and I am sure with the recent restructuring that has taken place, we will start to witness increased numbers in the not to distance future; especially if we wish to sustain any added airlift.

So what is finally being negotiated with DISCOVER is a win-win scenario that will hopefully achieve their objectives, while at the same time help to raise our destination visibility in US market, again at minimal cost.

With help from the Barbados Tourism Marketing Inc (BTMI) the new branded re-DISCOVER DISCOVER lunch and dinner voucher will be mainly distributed from the BTMI office in the arrivals hall of Grantley Adams International Airport. As we know, the vast majority of passengers have to pass this office after clearing immigration, baggage collection and before clearing customs. This will be critical in the possible success of the promotion.  

WestJet’s Valentine’s Day proposals a huge hit. Kudos to Barbados Tourism Marketing Inc.

Adrian Loveridge – tourism expert, hotel owner

Kudos to the recently revitalised national marketing organisation renamed the Barbados Tourism Marketing Inc., for facilitating the production of a series of videos where the airline WestJet partners with the chain store Michael Hill Jewellery and a number of Barbadian tourism interests to highlight two couples who become engaged on our island.

At the time of submitting this column already well over 1 million people had watched the three videos and this number will rise substantially over the next few days. Add the media coverage by print, television, radio and other shared social media and realistically millions of people will be exposed to Barbados as a desirable destination. Timing of course, can be everything, and the fact that WestJet posted the videos just before Valentine’s Day can be no coincidence.

To reinforce the positive effect the airline rolled out a supportive seat sale to Barbados which required booking by 14^th February, but for travel up to 24 June 2015.

When preparing for the filming, a few cleverly conceived twists were applied and to quote WestJet’s Manager of Communitity Investment, Sponsorship and Experiential Marketing (what an incredible job title), Corey Evans, revealed that ‘girls thought they were auditioning to appear on a new WestJet commercial that we were shooting in Barbados, and had no idea what was going to happen’.  

Connections: American tourists, Super Bowl advertising and QR codes on Barbados rum bottles

Adrian Loveridge – tourism expert, hotel owner

Ecuador recently went into history by becoming the first foreign country to take a thirty second television commercial which was aired during the recent Super Bowl at a quoted cost of US$3.8 million to reach an estimated 112 million television audience.

As first thought, any comparison between a country boasting a land mass of 109,484 square miles and a population of 15 million people with tiny Barbados seems almost totally illogical, but then look again.

Ecuador welcomed a record 1,500,241 overseas visitors last year up until 22^nd December according to the website of their own Ministerio de Tourismo. Of that number the second largest market, the United States, supplied 16.6 per cent of the overall number which was 14 per cent up on the previous year, amounting to 232,868.

Colombia, its northern neighbour, produced the single biggest number, 23.8 per cent or 333,197 persons.

Sadly while Barbados Statistical Service posts critical information so late, it was almost impossible to compare our 2014 Barbados arrival figures with that of Ecuador for the same year. Up until last Tuesday the most recent posting covered the month of September, with October and November only being added in the first week of February.

So let’s look at 2013, where Barbados welcomed 120,584 American long stay visitors which represented over 50 per cent of the US numbers who travelled to Ecuador. Despite the initial geological and demographic disparity, their tourism planners were able to persuade the Government of Ecuador to splash out a staggering BDS$7.6 million, apparently for a single shot 30 second ‘ad’…