Commentary: Tourism Matters: Our competition has become relentless

Commentary: Tourism Matters: Our competition has become relentless

By Adrian Loveridge

As this could well be one of the last Tourism Matters columns before the announced and seemingly imminent budget, even if it’s my humble and probably futile attempt to influence government policy, I would join in with those who are far better informed, and make a passionate plea that no additional or higher taxes are imposed on tourism.

Adrian Loveridge has spent 46 years in the tourism industry across 67 countries, as a travel agent, tour director, tour operator and for the last 24 years as a small hotel owner on Barbados. He served as a director of the Barbados Hotel and Tourism Association, and as chairman of the Marketing Committee. He also served as a director of the Barbados Tourism Authority and is a frequent writer on tourism

In fact, I remain convinced that a lowering of the VAT (value added tax) to 7.5 percent across all tourism offerings would not only attract more visitors, but encourage larger numbers of locals to frequent our restaurants and hotels, which in itself will help increase overall spending and, critically, higher foreign exchange earnings across the entire sector.

Without a single exception this has worked across every other destination that has adopted and implemented the concept. From all early indications with reduced hotel occupancy for the first three months of this year, we are in serious danger of becoming a perceived, or in actuality, an over-priced holiday destination.

In three decades, frankly I cannot recall the subject of value-for-money being raised so often in the public domain by potential and repeat visitors through various social media outlets.

Of course, any concerted effort to reinforce that we can truly offer an affordable product for our targeted markets does not rest with government alone. While we have collectively built an enviable reputation for our gastronomic offerings, regionally and some would argue across the world, many of those cherished customers simply cannot understand how a $6 piece of fish becomes a $60 main course in many of our restaurants.

And our competition has become relentless.

Take Groupon, which has an incredible following and usage in most of our source markets, as a simple example.

Many tourism businesses have learnt how to use it effectively, to stimulate early booking tables at restaurants and fill lower accommodation occupancy periods in hotels and villas.

There is nothing rocket science or complicated about its usage, just a basic understanding about controlling your revenue.

As an example, if each of the current 25 re-DISCOVER partners accept a booking under the terms offered, serving just ten diners per night, six nights a week and 50 weeks of the year, it generates an additional BDS$300,000 in turnover annually. The ‘doubting Thomases’ will of course argue that this revenue would not constitute its most profitable overall contribution and they would be right.

But, they would then have missed the point.

That extra $6,000 per week created by a joint promotion does not cost the individual partner restaurant a single cent in marketing costs, but could well pay the land taxes, rent, insurance, water, electricity and other fixed operational costs, therefore increasing the percentage of profit on other business attracted.

Participation in joint initiatives like re-DISCOVER also strengthen the length and breadth of the tools our national marketing agency has to work within our main visitor originating sources, especially when at least two of these (United Kingdom and Canada) are currently experiencing significant currency challenges when compared to US$ pegged destinations.