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THE ISSUE: Efforts to keep tourism afloat

by Stacia Browne

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Tourism is this island’s highest performing sector but it is also one of the most vulnerable sectors in the Barbados economy. Dr Delisle Worrell, Governor of the Central Bank of Barbados, pointing out the performance of the tourism sector in his first-quarter review of 2010, said, “Long-stay tourist arrivals were up about two per cent in January and February, compared with the first two months of last year. Numbers were noticeably higher from the United States and Canada, but arrivals from the United Kingdom, which remains Barbados’ largest tourism market, were down. Estimated average expenditure per tourist was lower, and the average visitor stayed fewer days. As a result, receipts from tourism were insufficient to provide the usual first-quarter surge in foreign exchange reserves.”His comments bear evidence of the vulnerability of the sector, particularly in the midst of an economic downturn.Tourism executives have had to adjust their strategies, rates and services all in an effort to continue to attract visitors to these shores. In February 2009, Cabinet approved a $15 million stimulus package called the Tourism Industry Relief Product to assist any failing properties and maintain employment in the tourism sector. At the time, Prime Minister David Thompson said the money was for the current financial year and there was the possibility of a further sum in the next.“We looked at options available and we found that a programme of that sort, in addition to the $20 million – $10 million supplementary . . . and $10 million last year – that was already made available to the Barbados Tourism Authority (BTA), as well as other initiatives, we think would positively impact on the tourism sector, so that we can mitigate the worst aspects of the current economic crisis,” he said.Meanwhile, hotelier Adrian Loveridge told the Press at the recent opening of the 2010 re-Discover the Caribbean exhibition on April 23 and 24 that Government should consider the possibility of lowering taxes on airfares. Loveridge said that airfares in the region have become a major challenge for Caribbean destinations, as airlift through the Caribbean continues to be inefficient. As a projected tough summer season approaches for the tourism industry, the local hotelier advised that Government consider lowering taxes on airfares. “Airfares in the region are an enormous challenge.” While Government is looking to increase its revenue, this suggestion is at least worth researching, given the importance of the sector. The Barbados Hotel and Tourism Association (BHTA) submitted a number of recommendations to Government in 2009 to assist tourism-based businesses during the economic downturn. Among those recommendations was lowering taxes and licensing fees that affect businesses such as car rentals and restaurants.At the BHTA’s 2009 annual general meeting, president Wayne Capaldi said his organisation was still awaiting Government word on suggestions they made regarding the reduction of duties on a basket of food items that attract anywhere between 190 per cent and 200 per cent import duty.     Additionally, the BHTA called on the State for rebates on the increases in 2008 land taxes and to provide a hedge against future oil price spikes. Capaldi noted that such actions would have given the sector a better basis for a reduction in the overall cost inputs to the industry and a better opportunity to retain employment at pre-crisis levels.    On the side of the small hotels, in February 2010, Intimate Hotels Group chairman Dennis Tull told BARBADOS BUSINESS AUTHORITY that the small hotel sector should be taken into account in the initial stages of planning this new era in marketing Barbados. His comments came just weeks after Minister of Tourism Richard Sealy announced that changes would be coming to the BTA by mid-year. Small hotels in Barbados are hoping that  they would be included from the planning  stages of this new dispensation.Moreover, Loveridge also weighed in on the  topic in the May 3 BARBADOS BUSINESS AUTHORITY when he commented that a national marketing policy wass needed for small hotels. The BHTA’S Staycation initiative, which was introduced in 2009 and continued in 2010, gives Barbadians and CARICOM nationals  significantly discounted rates to take  vacations at Barbados’ hotels. This was a  significant programme that became very  successful. The special offer brings a cross-section of accommodation properties to the market at attractive rates.