Hotelier Paints Bleak Outlook

Adrian Loveridge – Owner of Peach & Quiet Hotel

There is a very fine line, when writing a column like this. The risk of being branded as a pessimist is high. I only hope that readers will focus on the message that is trying to be conveyed and perhaps apply some of the content objectively to look at issues in a broader more holistic way.

When I heard the Minister of Tourism recently predict that he anticipated long stay visitor arrivals in 2013 should reach the same levels as last year, frankly I was surprised. Look at our largest single market, the United Kingdom has already experienced a decline of 15,631 visitors in 2012, when compared with 2011.

In the first week of May, Virgin Atlantic brought forward from October 27 their planned change of aircraft on the Gatwick/Barbados route by substituting the larger B747 aircraft with smaller A330 equipment on each day of the week, except for Thursdays. This immediately cuts up to 1,134 seats weekly and by the end of December this year I estimate to be almost 40,000 seats lost. Put another way, we will lose airline capacity for nearly 23 per cent or around one in four of all our British land based arrivals annually, which in 2012 totalled 173,519 persons. It is also not unreasonable to conclude that at least 50 per cent of those lost seats could have been used by the largest tour operator into Barbados, Virgin Holidays.

Smart Partnerships the Way to Go

Adrian Loveridge – Owner of Peach & Quiet Hotel

Short of a miracle and/or a radical change in the way we do business, it appears we have headed into one of the most challenging tourism summers’ in recent history, hot on the heels of a poor winter. With still no game changing strategies, other than one or two tinkering offerings on the horizon, is there more ‘we’ can do to avoid further widespread lay-offs and closures?

The answer has to be YES! And I think we can start by looking at further opportunities on our doorstep.

For ages, I have admired the work of the Barbados Association of Retired Persons. My wife and I have been members for a number of years and I cannot even begin to think of the savings it has brought us during that period, far outweighing any annual subscription fees. For a number of reasons, I only purchased my first public company shares just over half a decade ago, on the recommendation of our accountants. If we are lucky, our small capital investment will return to the level that we initially put into fund, by the end of 2013.

Working TOGETHER, You , You and Percy!

Adrian Loveridge – Owner of Peach & Quiet Hotel

Recently published online by Caribbean News Now, hotelier, Rob Barrett, the CEO and operator of three hotels on Antigua, St. James Club, Galley Bay and Verandah Resort and Spa, announced some very encouraging news.

‘The first quarter of 2013, January through March, has been the best quarter in terms of financial results I have experienced since coming to Antigua over 20 years ago, despite lingering and significant global economic challenges in both North America and the UK’.

Attributing some of the growth to, in his words’, ‘I believe some of the recent strength is the result of positive changes happening on island which affect visitors’ perceptions from their welcome with improved customs and immigration processing to the more efficient taxi operations. These together provide an overall better arrival experience for visitors’.

It Was a Poor Winter, What Next?

Adrian Loveridge – Owner of Peach & Quiet Hotel

Sometimes so many statistics and figures are bandied about in the tourism industry, it is easy to be distracted from any cause and effect that these may have. Take the recently announced long stay visitor arrival figures for January and February 2013 for instance. A 9 per cent fall for each month. While that may not appear devastating in numbers alone, you have to look past the percentage decline. These are two of our critical four peak winter months. Add the fall in arrivals during December 2012 and already the heady predictions of a strong winter are completely out the window. In January 2012 , we welcomed 52,619 stay-over visitors and in February 2012, some 54,162.

Many hoteliers rely on the winter for not only a high room occupancy level, but also the premium rates charged over this period. December 2012 welcomed 52,174 persons, which naturally includes what is probably the busiest time of the year, Christmas and New Year, for most properties. Compare arrivals with summer months and you can get a feel of the importance of winter volume and revenue. As examples, August 2012, which could have the benefit of Crop Over and visiting friends and relatives, 43,191 and June 2012, 36,656.

Lifting the Veil

Adrian Loveridge – Owner of Peach & Quiet Hotel

I would like this week to stay on the subject of transparency and communication in the tourism industry, and the underlying speculation, misunderstanding and consequential harm that can result by not ensuring these virtues are carried out successfully. In both major newspapers last Sunday was the announcement of an auction, set to take place the following Saturday, of many ‘goods and chattels’ owned by Almond Beach Village which closed its doors two weeks short of a year ago.

Yet in another arm of the media, a few weeks ago, under the banner headline ‘Buying back’ we were told that of the four options on the table, ‘Prime Minister Freundel Stuart will sit with his Cabinet to agree to buy back Almond Beach Village and its brand for almost $110 million’. The article went on, ‘The plan, being piloted by Minister of Tourism Richard Sealy, calls for a US$10 million refurbishment project, after which the sprawling 400-room facility will be turned over to former staff, who have submitted a plan to operate it’.

The purported logic behind choosing this fourth option was justified based on the time the property would be out of service, citing the other three alternatives as taking too long to implement. Other verbatim quotes include ‘In view of the urgency of this need, it is now proposed that Government seek to immediately acquire Almond Beach Village’ and ‘with a view of reopening in an effort to supplement room stock for 2013 and beyond’.

Attractive Hamburg Route Offers Possibilities

Adrian Loveridge – Owner of Peach & Quiet Hotel

According to recent media releases, European travel giant TUI will operate direct charter flights fortnightly from Hamburg, Germany’s second city and the sixth largest in the European Union commencing November 2013. This will give Barbados two routes from the most travelled per capita population in the world, adding northern Germany to the current Frankfurt flight.

The UNWTO World Tourism Barometer estimated that Germans spent US$80.8 billion outside their own country in 2009. The great circle distance of 4,661 miles will mean a flying time of just over 9 hours and the flights will be operated by a B767-300 of a TUI Dutch affiliate ARKEfly, with 265 seats in two classes. Hamburg, is currently the fifth largest airport in Germany, handling nearly 14 million passengers a year, served by 60 airlines to 115 domestic and international destinations.

Justifying, the move which includes other destinations in the region, Christian Clemens, CEO of TUI Deutschland Gmbh., stated ‘our choice of Hamburg as a departure airport was very deliberate. We have a unique selling proposition here, because there are, to date, no non-stop long haul flights from Hamburg to the Caribbean or Mexico’. Recent research by the company, revealed that one in four Germans wanted to undertake long-haul travel and market leader TUI is presently experiencing record 30 per cent booking growth in this segment for winter 2013/14. TUI is already Germany’s largest tour operator, with a market share of around 20 per cent.

Reconciling the Tourism Numbers in Fiscal 2013

Adrian Loveridge – Owner of Peach & Quiet Hotel

Government’s budget setting out the Estimates of Expenditure and Revenue for the financial year 2013/2014, lists that ‘a subvention of $101.7 million has been provided to the Barbados Tourism Authority to facilitate marketing and promotion’. At first, it seems, a simple enough stated intent, but what does it really mean?

‘Marketing and promotion’, what will ultimately be spent on these two critical functions after all other expenses are taken out? Salaries, per diem allowances, the much vaunted restructuring costs possibly including an allowance for severance, consultancy fees, lease payments on luxury SUV vehicles, recent office moving expenses, outstanding debts, overseas offices, depreciation, interest. The list goes on and on.

Perhaps even more pertinent, will the budgeted amount even actually be available to the organisation? Or will they become cash starved again, before the end of the next financial year contributing to another near devastating fall in arrival numbers. Bearing in mind the fragile state of the industry, wouldn’t it also be wise to ensure that the private sector is fully informed of any recovery plans to ensure limited available resources from them is not squandered by duplicating efforts.

A Pressing Need to Reengineer Our Tourism Structure

Adrian Loveridge – Owner of Peach & Quiet Hotel

Perhaps like many other people involved in the sector, I have wondered for a very long time exactly how financial data is collected and used to shape national tourism policy. As part of the arduous lead up to prepare all the required paperwork for the eventual sale of our small hotel, we have had to obtain many official documents. This includes a Certificate of Good Standing from the Corporate Affairs and Intellectual Property Office to state they have in their possession our last twenty something years of certified accounts.

Don’t get me wrong, I have absolutely no objection to them having every intimate detail of our financial trading over the previous two decades. But I just wonder, if any part of the information we voluntarily supply is passed on to Ministries, including tourism, or other institutions like the Central Bank so that it can be used to define policymaking.

What prompted these thoughts was looking through a real estate description of one of the many hotels that is on the market for sale and trying to fully understand all of the reasons, why such a large percentage of our accommodation providers desperately need to be upgraded. The hotel in question has 150 rooms, located on a 525 feet wide prime beachfront site. spread over about 5 acres on the south coast. According to the agent, the hotel has ‘generated significant annual gross revenue averaging more than BDS$10 million over the last four years’. At first, it looks an attractive acquisition prospect, but then consider this.

How Do We Invigorate Our Tourism Product?

Adrian Loveridge – Owner of Peach & Quiet Hotel

I suppose you can put it down to my naivety, so long in coming, so many great expectations and then in hindsight, the reality of the situation. Almost 40 percent of the eligible electorate chose not to vote, the status quo re-elected for a second term by a precariously small majority and just microscopic adjustments made to the governance of an industry in crisis. At least, that seems to be the scenario, so far.

Clearly there are plus points. Senator Irene Sandiford-Garner, appointed as a Parliamentary Secretary in the reconfigured Ministry and Tourism and International Transport, when many of us years later are still puzzled why the two bodies were ever separated in the first place. The Senator brings her abilities in marketing to the table at a time when this discipline is needed more than ever.

Shadowing the Ministry is Member of Parliamant Santia Bradshaw and while I don’t want to diminish her abundant legal qualifications, I am far from convinced we need or want any more lawyers involved in tourism policymaking. But she is also an entrepreneur and after looking at her website, I was personally impressed with the high level of presentation. Hopefully she can add value and youthful objectivity to the sector from a constructive opposition stance.

Now is the time for solutions.

A New Normal Expected By Tourism Players

Adrian Loveridge – Owner of Peach & Quiet Hotel

Having sat on the board of the Barbados Hotel and Tourism Association (BHTA) briefly, you get some idea of what a complex and challenging task it is for any Executive Vice President and the juggling act, he or she has to perform on a daily basis. Keeping everybody happy, in my view, is a near impossible task.

On reflection, I believe the body and its members have been extremely lucky, with very few exceptions, to have attracted the calibre of people who have held the position of EVP. When Sue Springer was recently interviewed by one of the other media outlets, you could sense the passion and genuine unease in her quoted words, even the journalist prefixed her title with ‘frustrated’. I don’t believe that anyone should view her comments as alarmist, as she is reflecting the obvious concerns of the members.

The article was headed “layoffs looming’ and pointed out that ‘the sector may have to brace for problems if the current state of the industry did not improve this summer’. Ms. Springer warned that the first quarter of this year was already looking bleak and this was clearly illustrated in the 8.2 per cent fall in long stay visitors in the peak month of January. Recently, one of our returning guests to the UK reported that the ten rows of seats behind them were all empty and that one flight arrived with 24 people in economy. As loyal regulars to Barbados, I have no reason to doubt them.

Toronto Breakfast in Barbados Promotion, Who Pays?

Submitted by Check-this-Out (CTO)

St. Lucia Westjet Ad

Both DLP and BLP manifestos included grand statements about what changes they will make to be more efficient and to stimulate tourism.

On February 18 BU family member Hants commented:

“Honourable mention. Every night for the past two weeks or so the BREAKFAST IN BARBADOS ad has been on prime time 6.30pm in Toronto. Nuff respect to the BTA.”

CTO has seen and heard the the TV and radio ads, and visited the 104.5 CHUM FM website. Same info is at Totally Barbados – The daily grand prize is return airfare for two to Barbados from Air Canada Vacations, One week at the gorgeous Tamarind by Elegant Hotels and $1,500 CDN spending money from CIBC Aerogold VISA Infinite.

Like Hants, CTO’s initial reaction was kudos to BTA – finally some Barbados promotion; particularly given the absence of BTA advertising in the Toronto media over the past several months. It is interesting to read the 2011 Totally Barbados article which includes the following

Opportunities Still to Boost Visitor Arrivals

Adrian Loveridge – Owner of Peach & Quiet Hotel

‘The region as a whole has regained ground lost in the heat of the global economic depression’.

‘The Caribbean also saw its largest number of stayover visitors in five years, with the region’s overall hotel occupancy increasing by more than seven per cent and room revenues up by nearly nine percent’.

‘About 25 million tourists visited the Caribbean last year, a more than 5 per cent increase from 2011. Its a growth rate that outpaced the rest of the world’.

These and other equally encouraging statements were recently uttered by Beverly-Nicholson-Doty, Chairwoman of the Caribbean Tourism Organisation. To the majority of the Ministers of Tourism within the Caribbean, it must be like hearing pleasurable music in their ears.

Sadly, not to Barbados, where instead of recording an almost 6 per cent growth in 2012, we experienced a 5.5 per cent fall in long stay visitor arrivals. A near 11 per cent differential. Any newly elected Government must consider the reasons behind this dismal performance as an imperative, before more hotels close, further lay-offs occur and remaining airlift is further eroded

Winter Season Performance Lagging

Adrian Loveridge – Owner of Peach & Quiet Hotel

As we have now crossed the halfway stage of the winter tourism season, it is looking increasingly doubtful that any predictions of a strong performance in this sector will become a reality. The January long stay visitor arrivals figures are especially alarming. An overall fall of 8.2 per cent across all markets, but significantly of concern are the numbers from Canada, which saw a 18.4 per cent fall when compared with the same month in 2012. The USA was down 11.1 per cent, the UK down 2.4 per cent and Trinidad down a staggering 40.6 per cent.

Whoever, assumes the office of Government later this week will finally have to take a long and hard look at current marketing strategies, and even if this is deemed an imperative, there is very little likelihood that any measures implemented at this late stage will make an iota of difference before April 15. So the next challenge is the eight long softer summer months.

After five years in power the outgoing administration had seemingly abandoned any attempt to fulfil their previously stated 2008 manifesto objective, to restructure the Barbados Tourism Authority. This despite an overwhelming mandate to effect change, yet surprisingly, its popped up again in the 2013 manifesto.