TOURISM MATTERS: Upgrade to maximise room rates
HAVING?TRIED to follow and fully interpret any potentially detrimental effects of last week’s Budget, I increasingly wonder if both the Minister of Finance and Minister of Tourism are always given the very best advice concerning the workings and challenges of the industry.
No one can sensibly argue that many of our small hotels need to be upgraded, but let us understand the reasons and opportunities behind this goal.
Mr Sinckler’s presentation implied that our smaller hotels were “denying themselves lucrative business opportunities” and that “European tour operators, for example, expect a minimum of three-star product for their customers”.
Reading these two statements, you might draw the conclusion that many more of our accommodation providers could be featured in tour operator programmes simply by upgrading their properties.
As a tour operator of 12 years based in Britain, this simply is not the case.
Operators need allocations to ensure they match the number of rooms contracted with their flight requirement.
While the Caribbean definition of a small hotel is under 75 rooms, in reality the average in Barbados is just 22.
It is almost impossible for many of our smaller properties to offer a sufficiently large allocation that would make commercial sense for the tour company.
We tried it in the early days and contracted a total of 37 rooms to Air Tours, UniJet and Thomson.
Bearing in mind we only have 22 rooms, only once during several years did they ever totally utilise this number and usually rooms were handed back on short notice, unsold and more importantly not paid for.
This, together with having to discount our room rates dramatically, led us to the decision that it was not in our best business interests so we embarked on building our own market.
One of our destination strengths is that we can offer a wide range of accommodation options which, even during challenging financial periods, have some type of market.
I am probably just as proud that we can boast a Sandy Lane. But even if that hotel was full every single night of the year, it would only accommodate slightly less than 12 000 guests per year based on an average stay of seven nights and two persons per room.
Put another way, that just about fills one British Airways Boeing 777 once a week.
According to the Caribbean Tourism Organisation, Barbados recorded a total of 518 564 long-stay visitors in 2009, so Sandy Lane’s capacity could with 100 per cent occupancy represent around 2.2 per cent of that figure.
Of course, the argument that high-end hotels and villas contribute more financially to the national coffers is relevant, but even these luxury properties need the lower level accommodation providers to maintain existing and drive new airlift.
The overall objective should therefore be to upgrade almost every level of boarding options, not solely to attract tour operators but to ensure that we maximise room rates and that any increased income generated stays here in Barbados.
Again, I repeat my call to revisit the mandate of the Barbados Tourism Authority and ensure that there are professionals in place who fully understand the industry and can advise ministers of Government accordingly.