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WHAT MATTERS MOST: Missteps over tourism arrivals

Dr Clyde Mascoll, mascoll_clyde

WHAT MATTERS MOST: Missteps over tourism arrivals

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SINCE IT HAS BEEN argued in this column that the tourism sector must lead our economic recovery, it was heartening to read that “local tourism expanded by 15.1 per cent during Q1 2015”.

But it was “the highest performance in any comparative period in 25 years” that raised my eyebrows. Correctly, the Government wanted to show how good the performance in the first quarter was by using percentage change.

However, the Government must know that the figure of 171 471 has been revised downwards to 166 778 for the first quarter of 2015. This is a significant revision, which should have prompted the tourism spokesmen to come back to the public.

Given the revised number, the percentage increase is 11.9 per cent.

The first-quarter performance in 2004 was equally as impressive and in 1994 and 1998 the percentage was higher.

So the politics of going back 25 years was not necessary.  

According to data from a study conducted on the tourism sector in 2013, during the first quarter 22 per cent of the tourists stayed with friends and about 15 per cent in villas. It is therefore estimated that of the 166 778 tourists in the first quarter of this year, 36 691 stayed with friends and 25 016 in the 3 000 villas.

The remaining 105 071 tourists stayed in the 6 100 hotel rooms. Given that on average two tourists stay in a room, there were nine couples per room during the first quarter of 2015 and each couple spent an average of ten days over the 60-day period. 

Using the same methodology, with two tourists per room for the villa accommodation, the average length of stay works out at just over three weeks for the first quarter of 2015. These numbers are very consistent with industry standards and compare with a 12-day average length of stay in 2010, when the hotel room stock was 6 570.

Once the length of stay declines, the tourist’s contribution to tourism output or the gross domestic product is less. Length of stay is extremely critical. This is why it is significant that almost 3 000 less British tourists accounted for the lower revised figure. 

The analysis above assumes that there was 100 per cent room occupancy which did not happen. The absolute tourist arrivals should have caused the authorities significant alarm and headache with respect to accommodation. The absence of such alarm raised my eyebrows since there was no mention of room occupancy in the recent Press release.

Ironically, in the same week that the arrivals were being splashed all over the media, the general secretary of the Barbados Workers’ Union was suggesting that Sandy Lane was the only hotel still not willing to honour an agreement with the Barbados Hotel and Tourism Association.

Sandy Lane is the top end of the luxury market and, in the midst of a poster winter season, was unwilling to give its workers a three per cent increase that the BWU negotiated with the BHTA. This raised my eyebrows.

Reducing staff levels

In the weeks following the winter season, hotels that received substantial concessions were reducing staff levels and putting the remaining staff

on a 35-hour work week. Even though the season was not quite what was being suggested, it was still an encouraging performance that needs to be put in its proper context.

The most important context is that the foreign reserves at the Central Bank of Barbados fell during the first quarter notwithstanding the increase in tourist arrivals. In addition, economic growth was estimated at only 0.6 per cent,

more in line with the forecast of the International Monetary Fund than that of the Government.

It is becoming increasingly more difficult to give the Government the benefit of the doubt on anything. Even

in its brightest hour, in relation to the economy in the last eight years, the winter season, in its wider economic context, was not what it was projected to be in the recent Press release. In light of the evidence presented in this column that cannot be refuted, the Government should have held another Press conference indicating that the tourist arrivals for the first quarter of 2015 have been revised substantially downwards.

There have been several instances with respect to figures for the country’s unemployment rate, the fiscal deficit, the national debt, the foreign reserves, economic growth, taxation measures and now tourist arrivals that the Government misstepped. The frequency and the nature of these missteps are, to say the least, worrying. But equally important, there is never a desire to admit to its wrongs.   

 Dr Clyde Mascoll is an economist and Opposition Barbados Labour Party adviser on the economy. Email [email protected].