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Hotels, try different financing options


GC

Hotels, try different financing options

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THE BARBADOS HOTEL INDUSTRY has been advised to make a paradigm shift in its approach to accessing long-term financing.

PricewaterhouseCoopers partner Oliver Jordan floated ideas such as share issues, strategic divestment and private equity funds as possible alternative options outside of the commercial banks, when he addressed the Barbados Hotel and Tourism Association last week during at luncheon at its annual general meeting.

“Having had the privilege of working at the highest levels of the Barbados tourism industry and the banking industry and now serving as advisor to public and private sector clients, provides me with a unique perspective on one of the most vexing challenges for the tourism industry,…access to long term financing,” Jordan told hoteliers and other industry personnel at the Lloyd Erskine Sandiford Centre.

He observed commercial banks seemed “less willing to work in a collaborative manner and to provide long term financing at attractive rates” since they were “already heavily exposed to a sector that is heavily dependent on unstable global economic performance”.

“In my view the solution lies in the industry developing and accessing attractive new sources for long term financing locally, regionally and internationally,” said the former banker.

While still advocating collaboration with the local banking industry, especially for short term fianancing needs, Jordan told the BHTA members, “I think that given their reticence for long term financing, the time has come for the industry to focus its efforts on alternative sources.”

His suggestion was a more diversified system with higher share of capital market and greater involvement in institutional investments and alternative financing. (GC)

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