Tag Archives: Barbados Economy

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

Barbados Solid Waste Tax

Adrian Loveridge - tourism expert, hotel owner

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.  Continue reading

5 Comments

Filed under Barbados, Barbados Tourism, Economy

Barbados government should lower taxes on tourist rental cars

coconut car rentals barbados

“I am pleading with the Minister of Finance to reconsider lowering the rate of VAT on car rental for at least our overseas visitors. Car rental is a critical component part of our export tourism offerings.”

Hired cars unreasonably expensive in Barbados

Adrian Loveridge - tourism expert, hotel owner

Adrian Loveridge – tourism expert, hotel owner

Whether travelling on business or pleasure, I usually hire a car, because for me it adds a huge extra dimension to the experience and dramatically increases the options available.

With an imminent budget on the horizon, I would implore the Minister of Finance to look again at our car rental sector, if we are going to maintain the recent increase in visitor arrival numbers.

Personally I do not think this segment of our tourism offerings gets the attention it deserves and that is probably partially due to the lack of knowledge and understanding of the enormous contribution it makes.

Just one of our larger vehicle rental operators has a fleet of almost 130 cars. If you average a rental period at 7 days, with a driver and at least one passenger, that amounts to over 13,000 persons each year. Of course the fleet size varies enormously, but from recently writing to over 30 Barbados based entities offering car rental, it gives you some idea of the importance in economic terms they play overall.

Rarely do I pay more than US$150 for a week’s rental in North America or GB Pounds 100 in the United Kingdom for a compact car, so for many of our visitors it can be quite a shock to pay what are considered ‘normal’ rates on Barbados. But it’s easy to see why, because of the taxes on purchasing cars here is staggeringly different to those where our major source markets emanate from.

Also surprising is the sad and difficult to understand logic behind the decision not to lower the rate of value-added-tax (VAT) on vehicle rental when the adjustments were recently made to hotels and some restaurants.

Perhaps it is because our tourism planners and policy makers do not fully understand the secondary benefits and economic importance that the flexibility of having a rental vehicle brings. It enables our visitors to sample more restaurants for lunch and dinner, patronise our attractions, activities, increases shopping options and generates fuel purchases among others. Continue reading

30 Comments

Filed under Barbados, Barbados Tourism, Barbados Transportation, Economy

Barbados luxury tourism image becoming a long-term liability?

Typical roadside wildlife: The not so rare Genus "plasticus baggis trashisus"

Typical roadside wildlife: The not so rare Genus “plasticus baggis trashisus”

“Barbados an upscale tourism destination? Really?

Open your eyes and your nostrils! Clean up the garbage strewn throughout this island.

Until we do that, the demographics of our tourism business won’t matter.”

Aging demographic of British tourists prompts questions about the next generation, but we have a more immediate problem…

submitted by Passin Thru

Barbados has never been, and will never be, a mass-tourism destination. We’re too far away from our main European markets, the farthest Caribbean destination from the North American markets, and not different enough from the closer South American markets to ever sustain mass-tourism at competitive rates. Nevermind considerations about the small size of the island, the need to import most supplies for tourists and the overpopulation of the south around the Bridgetown corridor – it is the higher transportation costs and longer time necessary to the destination that ensures we can never be competitive on a mass basis.

And that’s good on the cultural / lifestyle side of the coin, but bad on the economic side.

Barbados has always had to offer something other than mass tourism, and what we chose to offer was the image of luxury and upscale destination where the upper-middle class could run shoulders with the super rich and famous (or at least enjoy the same air and views.)

That choice worked in the past, but there are problems now that the younger generation of Brits (our main market) doesn’t have the money that their parents did.

Blame it on the weak UK / European economies, blame it on out of control EU socialism and mass unsustainable immigration into the UK from Third-World African, Middle East and near-Asian countries. Blame it on whatever you like, but it is obvious that younger Brits don’t have the disposable incomes that their parents once did.

So our largest group of tourists – the Brits – continue to age, while the next generation is either going elsewhere or can’t afford Barbados like they used to.

This is not a good trend for Bim.

What’s to be done about this demographic trend of aging Brit tourists and retirees?

I’m no expert, but obviously from the lack of ideas, plans and strategies emanating from government and the tourism organisations, I’m not the only one without a clue about what to do.

I do have one suggestion though…

Barbados is an upscale tourism destination? Really?

Open your eyes and your nostrils! Clean up the garbage strewn throughout this island.

Until we do that, the demographics of our tourism business won’t matter and we will continue to lose our image of an upscale destination.

Passin Thru

 

12 Comments

Filed under Barbados, Barbados Tourism, Economy

Barbados Government’s unrealistic taxes & inability to pay tax refunds is causing dumping, ruining the environment and our tourism economy

“Clearly the commercial banks will not extend interest free overdrafts to companies like ours to allow for Government’s inability to meet their obligations, so the financial challenges are further compounded as time goes by.”

“Many businesses have been forced to wait more than two years for submitted VAT refunds without any interest being paid.”

Indiscriminate garbage dumping linked to unrealistic tax structure

Adrian Loveridge - tourism expert, hotel owner

Adrian Loveridge – tourism expert, hotel owner

While at first this week’s column may seem to stray from the subject ‘matter’ and purpose, the consequence of certain actions has a direct negative effect on our tourism performance.

As a business we get absolutely no ‘free’ state collection of garbage.

We sort and separate everything we can with the wonderful assistance of B’s Recycling and virtually everything else we pay private contractors to collect and dispose of at a considerable cost.

Therefore when the Municipal Solid Waste Tax was imposed, almost without warning, the additional (in our case) $8,000 a year in further unbudgeted taxation was especially irksome as we have been asked to pay for something we do not in any way benefit from directly.

Compounding this already unfair situation is the announced tipping fee which the waste disposal companies will be forced to pass on to their customers like us.

This at a time when we are among many businesses who have been forced to wait more than two years for submitted VAT refunds without any interest being paid.

Clearly the commercial banks will not extend interest free overdrafts to companies like ours to allow for Government’s inability to meet their obligations, so the financial challenges are further compounded as time goes by.

From a tourism perspective, I also really also wonder if our policymakers have truly thought this through. While you cannot condemn any Government for indiscriminate dumping, clearly there has been a marked increase in this unfortunate practice, especially in some of our outstanding natural beauty spots.  Does anyone think for a single second that our visitors do not notice these blights on our amazing landscape?  Continue reading

4 Comments

Filed under Barbados, Barbados Tourism, Economy, Environment

Bargain airfares offer hope for Barbados Tourism – but only if we act!

American-Airlines-Dallas-Barbados

“If anyone realistically thinks… that lower prices do not drive additional business, then think again.”

Atlanta to Barbados – Return from US$227!!!

Adrian Loveridge - tourism expert, hotel owner

Adrian Loveridge – tourism expert, hotel owner

I subscribe to a website called airfarewatchdog.com which for those of you are unfamiliar with, monitors airfares across the world.

When Delta Airlines resumed their flights from Atlanta to Barbados, I placed an alert which several times daily, automatically scans all available options on that route whether direct flights or through connecting cities. Last week a series of alerts advised that for certain days and months, subject to advance booking, return air fares were available as low as US$227 with the amalgamated American Airlines and US Air.

Delta flights are of course direct and non-stop twice a week on Thursdays and Saturdays, while flying with the other carriers would involve a change in Charlotte or Miami, obviously resulting in a longer overall travel time.

But look at the fare, and if anyone realistically thinks for at least part of our target markets, that lower prices do not drive additional business, then think again.

I also monitor the very popular Trip Advisor Barbados Forum site and could not help notice that a lady had also spotted the bargain fares and had no hesitation in booking her family of five to Barbados, due to the lower cost travel opportunity.

How can we as a tourism driven country better take full advantage of these chances, especially as they cost us absolutely nothing in terms of marketing dollars?

Maybe by following other examples, both in terms of the tourism industry, but also other sectors, by including a ‘last minute’ portal on the national website with links. It could even be branded as a distinctive by separate product with catchy name like ‘spontaneous’.  Continue reading

4 Comments

Filed under Barbados, Barbados Tourism, Economy

If each small business in Barbados could hire just one more employee…

got the job barbados web

Adrian Loveridge - tourism expert, hotel owner

Adrian Loveridge – tourism expert, hotel owner

As a small business person for most of my life, trying to make miniscule budgets become larger profitable realities goes with the territory. As a general rule we adopted a very simple psychology – that any marketing dollars spent had to produce a tenfold return, or return on investment ROI of 1:10.

For instance if you took a quarter page on a peak circulation day in the sister publication of Business Authority, the ‘ad’ space would cost around $900 per insertion.

Very few smaller businesses could reasonably expect that a single ‘ad’ would generate an additional $9,000 in turnover, so the only plausible alternative could be to partner with 8 other entities each contributing $100 and then ask the question again.

Could an individual participant in a collective ‘ad’ expect to drive another $900 in new business?

An example might be a standalone restaurant ‘ad’ at $900 would probably need to drive another 60 customers a week to justify, but a shared cost of $100 would require just six or seven more patrons per establishment.

More historically traditional mediums like newspapers have been driven into looking for far more creative ways of retaining advertising revenue to compete with internet and other competition, but at the risk of the editor sacking me, they have to do a lot more to retain viability. (Editor’s note: Not around here, Adrian. Our advert ratesheet is very reasonable!)

One of the simplest ways this could be achieved would be to run a dedicated weekly restaurant and/or staycation/attractions page. Break the cost down to a level where individual ‘partners’ could afford to participate and justify the expense. Perhaps even build-in a discount voucher which is exclusive to the publication.

The recent revamping of the Nation and its various supplements may provide a new opportunity with one or more sales staff dedicated to following through with this concept.

There is also the possibility of sponsorship by other businesses that ultimately stand an equal opportunity of adding turnover or brand awareness. A local branded credit card issuer would be a natural partner who would benefit by users selecting a preferred method of payment.

The remodeled Easy Sunday insert just might be one of the best mediums for such a regular feature, as it appears to be targeted towards a particular lifestyle and perhaps would be easier to manage in terms of size and content.

As we rapidly approach the more challenging long tourism softer summer months the launch timing also seems to be perfect.

Personally, I am absolutely convinced it is going to primarily our small businesses that will be largely responsible for aiding economic recovery. Just imagine if by encouraging co-operative marketing initiatives each small business is able to employee just one more person. What a difference that could make to reducing unemployment levels and increasing disposable income into the system.

So I have thrown out the gauntlet to this publisher and those enterprises who think they can work together collectively to make a positive difference.

6 Comments

Filed under Barbados, Barbados Tourism, Business

Time for Barbados businesses to move into the Internet age – better late than never!

barbados-beach

Adrian Loveridge - tourism expert, hotel owner

Adrian Loveridge – tourism expert, hotel owner

Anyone who has used the internet to shop in Britain, North America and Continental Europe cannot fail to be impressed with the variety available, level of service and delivery options.

And I wonder with the recent change of ownership, branding and appointment of new management in some of our distribution and supermarket outlets has not presented an incredible opportunity to better serve up to 500,000 long stay visitors that we attract each year. Especially for first time visitors staying at our vast choice of villas, condominiums and apartments and who are unsure of what is available and pricing on certain consumables, at least prior to arrival.

What prompted these thoughts was the appointment of Judith Wilcox as the new Chief Executive Officer (CEO) of TriMart Inc. Her vast knowledge of the tourism industry gained with Virgin Atlantic and more recently, one of our largest villa rental agency, could provide a unique insight in developing better synergies between our suppliers and overseas visiting customers.

While there have been various local websites in the past, perhaps now is the time to take this marketing medium to a much higher level with the means to research product offerings prior to homeland departure, pay online with a credit card and delivery to coincide with the visitor’s arrival.

It is also potentially a great promotional vehicle to expose more locally made items and build better brand awareness to a much larger marketplace.

Does our reputation as a playground for the rich, work against Barbados?

While we are often depicted as an iconic destination for the rich and famous, let none of our tourism planners be lured into the illusion that the vast majority of our visitors are not increasingly demanding value-for-money. This will become even more critical as we transition from the peak winter season into the long eight months of summer, if the additional airlift attracted is going to be sustained.

From a business operation aspect in many cases we appear to be light years behind many developed countries in the area of e-commerce. By now we should be able to order and pay for so much more online, including electricity, water, all government taxes and licences, postage stamps etc.

There seems to be little alternative to queue in line for up to an hour to deposit cheques in most of our banks, but it should not, as it recently did take four hours to renew a vehicle tax disc, because the licensing authority had decided, without telling it’s ‘customers’, the rules had changed.

It seems the phrase ‘time is money’ isn’t understood by many of our service providers and this will have to change if we hope to emerge intact from the current financial challenges.

Of course there are notable exceptions. We can pay our phone/internet bills online and we can order a very limited choice of everyday supplies, but it’s far from the ‘norm’. Often it means hanging on a telephone while a check is made if the item is in stock, then writing a cheque for payment on delivery or at the end of the month.

All these transactions require time while this precious commodity could be spent far more productively, both from a consumer and suppliers perspective.

3 Comments

Filed under Barbados, Barbados Tourism, Economy