Financial Times: Cuban tourism boom to harm rest of Caribbean

What a surprise!

The sight of the Stars and Stripes being hoisted over the newly opened US embassy in Cuba last week, was one of the most visible signs yet of the diplomatic rapprochement between the long-term foes.

If President Barack Obama gets his way, the US Congress will soon go further still and lift its 55-year-old trade embargo on the island.

Such a move would be a major boon to the Cuban economy, not least by unleashing a torrent of big-spending American tourists on the island, which has largely been starved of such arrivals for more than half a century.

This, however, could prove disastrous for some of the small islands elsewhere in the Caribbean which are heavily dependent on tourism. They could see much of the US tourism trade they have come to reply on decamping to the large, and quite possibly cheaper, new competitor in their midst.

… continue reading the Financial Times Cuban thaw poses tourism threat to Caribbean neighbours

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? 

Dr. Karl Watson of Barbados National Trust “SHOCKED” by Sandals environmental damage

“In the short and medium run, tourism is really the only engine for our continued prosperity and economic growth. So, we welcome the Sandals development, however, I must say that having come down here this morning, I am a bit taken aback and shocked.

(snip)

Quite a number of mature trees have been felled and then I also see development on the way in the sea where a type of breakwater is being constructed, and I wonder whether the environmental impact assessment that aught to have been done for this project was really based soundly and on correct assessment, and whether the long term effects of both this type of deforestation, denuding of forest cover, exposure of the sandy layer, topsoil etc, or the creation of an artificial offshore reef; whether the future results of these developments have been thoroughly assessed.”

 

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.

Adrian Loveridge: No need for Barbados to be the world’s most expensive tourism destination

Lots of beaches, sand, surf, sky everywhere. Why should people pay most for Barbados? Maybe they should… but why?

“We have to either redress this reality or perception or risk losing more market share.”

Adrian Loveridge – tourism expert, hotel owner

With Sterling reaching an eight year high against the Euro, making most European countries dramatically less expensive as holiday destinations and the Canadian Dollar below 80 cents when compared with its southern neighbour, the pressure is on to making Barbados perceived as offering value-for money.

So when a Spanish based bank with a huge presence in the United Kingdom recently published the results of a survey entitled ‘Barbados Caribbean island is most expensive place to visit’ it should send a huge tidal wave of realism to our various tourism policymakers and planners that we have to either redress this reality or perception or risk losing more market share.

Santander UK currently serves more than 14 million active customers from 921 branches and 66 regional Corporate Business Centres in the United Kingdom. As of 31^st December 2014 it was the most switched-to-bank attracting 1 in 4 new retail accounts.

The survey, largely undertaken by Opinium Research/ONS Travel Trends 2014, stated ‘British people visiting Barbados will feel a particular nasty sting in their wallets this summer, having to fork out an average of GBPounds 109 a day in spending money – not including the cost of a hotel’.

Around the world Barbados was placed as No. 1 in a list of the ten most expensive countries for British people to visit based on average daily spend. Second was the United Arab Emirates.

Just as alarming, is that Santander concluded that the daily costs of visiting Barbados have risen from GBPounds 79 per day or nearly 38 per cent since 2010.

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. 

Tourism success is about perceived value – and Barbados is slipping

Adrian Loveridge – tourism expert, hotel owner

While not actually attending the Barbados Hotel and Tourism Association Annual General Meeting recently, if media reporting was accurate, the current Chairman is quoted as stating ‘that discounts were not the way to attract visitors to these shores’. I have enormous respect for Mr. Chatrani (despite his opting not to join the re-DISCOVER initiative) and in principal totally agree with this statement, but in reality we have a mountain to climb to change the current perception.

Sadly across many of our markets we are generally considered as not offering value-for-money in our tourism industry and until the sector becomes more competitive this simply will not change.

As a tour operator in Britain for 12 years, we learnt from the mistakes of others and did not discount a single holiday out of hundreds of thousands sold, other than for people booking and paying in full up to 18 months prior to departure.

The year our company was formed, 1976, interest rates peaked at 15 per cent per annum and so we used our customer’s monies to partially subsidise commercial bank lending charges to grow the company.

Every person who booked also knew that they were not going to get a cheaper holiday if they waited until the last minute, so to get the holiday they wanted, necessitated booking earlier and enabled us to plan better. It was a policy that we continued while operating our small hotel for 25 years.

If we are going to achieve Mr. Chatrani’s objective, we are going to have to fundamentally change the way we currently do business.  

Barbados government should lower taxes on tourist rental cars

“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

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.

Barbados luxury tourism image becoming a long-term liability?

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

 

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. 

Loveridge: After unprecedented government concessions to Sandals, the company pays only lip service to Bajan agricultural suppliers.

Sandals’ Butch Stewart doesn’t look like he’s starving, but little of what he and his resort guests eat is Bajan.

“What must be clear to Government, is that after granting the unprecedented unilateral concessions to Sandals (which almost two years later not a single other hotel on Barbados has been able to obtain), Sandals must do more than give lip service to supporting our agricultural sector.”

Adrian Loveridge – tourism expert, hotel owner

First let me declare my absolute and total support for those advocating the use and consumption of more locally produced items especially by our tourism industry.

When the head of the Barbados Agricultural Society recently boasted that Sandals Barbados were purchasing 1,000 lbs of local produce each week, no-one thought to question him as to what this actually means. In all fairness to James Paul, he stated that they were trying to increase this amount, but let’s look at the current figures.

If the hotel is full that is a capacity of 580 guests each night who have every meal and snack included in the cost. This equates to a volume of just 4 ounces per person per day.

And that is before any allowance is made for the quoted 600 staff and management taking meals on the property.

The United States is currently the largest market for Sandals and the average American, according to internet informed information, is 36.6 years of age, is 5 feet 9 inches tall and weighs 190 lbs if male, or 5 feet 4 inches and 164 lbs if female. Again based on averages each American consumes nearly 5.5 lbs of food per day or a short ton per annum.

Over a year this includes 29 lbs of French Fries, 23 lbs of pizza, 24 lbs of ice cream, 53 gallons of soda, 24 lbs of artificial sweetener and a staggering 2,736 lbs of sodium, which is 47 per cent above the recommended medical limit. All of which add up to 2,700 calories daily.

The question should also be asked, is the average Sandals guest likely to consume more or less than they do at home than on a fully all-inclusive vacation?

In reality then the 4 ounces of ‘local produce’ represents less than 4 per cent of consumables used daily, therefore a proverbial drop in the ocean. 

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: New JetBlue Barbados flight brings opportunity and hope

Adrian Loveridge – tourism expert, hotel owner

The double positive whammy for our tourism sector last week was the number of English cricket supporters who came for the Kensington staging of the test series and the announcement by JetBlue that it was introducing a once weekly, Saturday seasonal flight non-stop from Boston.

From the first flight commencing on 7^th November it could easily add another near 4,000 American arrival numbers until the service initially halts on 30^th April next year.

It also gives us another incredible gateway from a market that many know could witness significant increases over the next few years. While the 48 square miles that make up the actual city of Boston only boasts a population of around 646,000 inhabitants, within the area known as Greater Boston live some 4.5 million people, making it the country’s tenth largest metropolitan density.

At first, concern may be expressed about a single flight per week, but you should remember the Americans generally have shorter holidays and many of those are crammed between two weekends, so a Saturday departure is perfect. Often overlooked are also the physiological flight times, departing Boston at 7.45am with a scheduled arrival time of 1.30pm, allowing most visitors time to journey from the airport to accommodation, check-in, unpack and possibly sea bathe before dark.