Target high end!
BARBADOS NEEDS MORE HOTEL ROOMS but low-end properties simply will not do, says Andrew Mallalieu, managing director of the Terra Caribbean group of companies.
Noting that the island had lost more than 1 000 hotel rooms over the past ten years, he said owners have had to invest in their properties to keep them at a standard in keeping with Barbados’ brand.
“The Barbados brand is a high-end destination, and low-end hotels will not do well in Barbados – that’s the reality,” he told BARBADOS BUSINESS AUTHORITY last week following the launch of his group’s new holiday-rental brand Blue Sky Luxury.
During the event at Bajan Services Limited’s Battaleys, St Peter office, he said hotels had dominated Barbados’ holiday market from the early 1960s to the late 1990s but in subsequent years, owners had not been able to invest.
“Other than a select few . . . starting with Sandy Lane and probably two or three others, all the investment that has gone into the holiday market in Barbados has gone into villas,” he said.
“In my opinion, Almond at the end of the day is not a failure because we didn’t need the hotel rooms – it is a failure because they failed to invest and keep the product at a level [where] they could get the rate that was necessary for the Barbados destination,” he later added.
Mallalieu noted that Barbados had become the leading villa market in the Caribbean and there were more “great villas” in Barbados than any other country in the region.
Asked whether Barbados had the correct mix of hotels and villas, he said the island needed more of both.
“The mix, I don’t know what the answer is, but Barbados does need some volume and we do not have enough hotel rooms today to give us that volume and a lot of the hotel rooms that we have today are not right for the brand that we have,” he said.
Mallalieu said any brand-name hotels coming to the island also had to be the right fit.
“Certainly the Four Seasons would be a great addition to Barbados . . . the Ritz Carlton, those types of brands . . . . They have their own marketing arm. It’s not just the Barbados Tourism Authority that has to market it. They have their own distribution channels.
“All of that is great for us but there are lots of other brands that I’m not sure would actually be matched with the Barbados brand,” he said.
Responding to the suggestion that it was difficult to finance the construction of a hotel in Barbados, Mallelieu said he was “yet to find a good business model that does not get financing”.
“I find a lot of bad people with bad business models can’t get financing but it’s highly unusual that a good business model can’t get financing whether it be equity or debt . . . .
“The reality is that the economics of the hotel business in Barbados are marginal and that’s where the difficulty comes with financing. Can it in fact make money?” he said. (NB)