HomeResourcesMr Rudy Grant- BHTA 1st Quarterly General Meeting - March

BHTA ADMINISTRATIVE REPORT DELIVERED BY CEO, MR. RUDY GRANT AT THE MARCH QUARTERLY GENERAL MEETING ON MARCH 8, 2017

The Barbados tourism industry exists in a dynamic globally competitive environment. Tourism is one of the fastest growing economic sectors in the world which has been occasioned by more countries, especially developing countries, focusing on Tourism as their main revenue earner. This has resulted in increased diversification and competitiveness amongst Tourism destinations. Barbados as a Tourism destination is competing with destinations across the globe. Our domestic environment therefore must be conducive to permitting our Tourism enterprises to effectively compete in the global tourism space.

The Tourism Development Amendment Act (TDAA) amended the Tourism Development Act to allow hotels to be granted exemption from duties and taxes payable on certain supplies. To date, alcoholic and non-alcoholic beverages along with proteins have been approved for these exemptions. This has certainly been beneficial for our members but it is fundamentally important that the other items identified be approved swiftly. The inability to add forty-nine (49) items which were submitted in November 2016 inhibits the further competitiveness of our hotels.

RENOVATIONS:

Tourism competitiveness can be evaluated in part by assessing the appeal of Barbados as a Tourism destination. Upgrades, refurbishments and renovations of our hotel plant enhances our competitiveness. These also assists in improving guest satisfaction, increasing room revenues and offering fashionable modern rooms. 

During 2017 the following hotels will facilitate upgrades, refurbishment and renovations works:

LITTLE ARCHES:   
Refurbishment:  Updating bedroom furnishings including headboards and vanity drawers, etc.   

SOUTH GAP / YELLOW BIRD HOTELS

Renovations: South Gap is closing for renovations from April 1 through July 31, 2017. 

COBBLERS COVE HOTEL: 

Refurbishment:  Continuing refurbishment at Cobblers Cove and will be closed from August 1st – October 16th. Sixteen suites to be completed in this time.

FAIRMONT ROYAL PAVILION 

RefurbishmentPlanning refurbishment of 72 rooms and lobby for 2017.

DISCOVERY BAY

Renovations:  Hotel will be carrying out small renovations to bathrooms and balconies during 2017-2018. Will also be upgrading the soft furnishing in rooms and public areas.

DIVI SOUTHWINDS

Refurbishment:  During spring and summer 2017 Divi Southwinds is seeking to upgrade rooms, which is expected to cost approximately US$3,000,000.00. 

THE CLUB BARBADOS: 

Extension:  An additional 55 rooms planned for a bathroom upgrade during the period in question.  Job-scope entails new wall and floor tiles, new tubs and shower stalls and fittings/mixers.

SUGAR CANE CLUB:

Upgrade: During the months of June through August, 2017 up-grades and enhancements to the property will include:

  • Building 2 additional suites carrying the total to 47 units
  • An extension to the La Salsa Restaurant

SEA BREEZE

Renovations:  Major renovation and expansion project at Sea Breeze taking the product from a 78 room 4-star all-inclusive property to a 122 room 4+* luxury boutique all inclusive.  The total investment is planned at around BD$14M and includes renovations of all 78 existing rooms and comprehensive upgrade of all restaurants.

BOUGANINVILLEA BEACH RESORT - Renovations:  Major renovation of Bougainvillea’s rooms and some public areas planned in 2017.  The majority of the work will take place Aug. 19 – Oct. 6th, when 100 of our 138 room will be closed.

ACCRA BEACH HOTEL & SPA

Refurbishment:  Ninety (90) rooms will be refurbished in the main building, starting from April until November 2017.

ELEGANT HOTELS GROUP

Total projected spend is approximately US$5.1M., for work at Tamarind Hotel, The House, Colony Club Hotel, Crystal Cove Hotel, Turtle Beach Resort, Waves Hotel and Spa and Daphne’s Restaurant. Work to include rooms, kitchen, IT and Gym upgrades.

BEACH VIEW

Beach View is adding 19 condos to their product situated on an adjoining 2 acre site. The condos will be in 3 buildings and will also include 2 pools, a large restaurant, a large reception area with a small gym & a small spa. They expect to begin construction on May 2, 2017 and open for business in October/November 2018.

The concessions provided through the Tourism Development Act (TDA) have given impetus to our member properties to engage in these upgrades, refurbishments and renovations. The TDA concessions allow the upgraded properties to be more globally competitive while also providing higher average daily rates. It is interesting to note that according to the STR (formerly Smith Travel Research) Report for December 2016, while occupancy for the hotels participating was down by 5.2 percent in December 2016 the average daily rate was up by 5 percent.

ARRIVALS AND PERFORMANCE:

The appeal of Barbados as a Tourism destination can be assessed by the number of visitors coming to our island. In addition, to properly evaluate our performance we need to also focus on performance indicators such as occupancy, Average Daily Rate (ADR) and RevPAR (Revenue Per Average Room). In reporting to you on performance for 2016 and specifically reviewing December 2016, January 2017 and projections for February and March 2017, consideration is taken of actual arrival numbers, STR Reports and BHTA member surveys.

In 2016 total stay over arrivals were 632,133, an increase of 6.7 percent over 2015. There was growth in our major source markets with the USA increasing by 14.2 percent, Canada increasing by 5.9 percent, the UK increasing by 2.1 percent, Trinidad & Tobago increasing by 14.6 percent and other Caribbean increasing by 10.5 percent.

With specific reference to stay over visitors in December 2016 there was an overall increase in tourist arrivals of 5.2 percent. Except for the UK which declined by 2.2 percent there was growth in all the major source markets. By comparison the STR report for December 2016 as stated previously reflected a 5.2 percent decline in occupancy for participating properties while ADR was up by 5 percent and RevPAR was flat at a decline of 0.5 percent. Further, the STR Report for 2016 provides a decline in occupancy of 1.5 percent, with the ADR and RevPAR being statistically flat with an increase of 0.6 percent and decline of 0.9 percent respectively.

Towards the end of January 2017 in a Press Statement I communicated the following “Our projections for the first four (4) months of 2017 anticipate a decline in overall accommodation with our member properties.” This was based on a BHTA survey.

At that time the projection information received informed of a 3 percent decline in occupancy for January. Actual visitor arrivals in January were flat with a 0.1 percent decline. Arrivals from the USA increased by 14.4 percent, Canada increased by 2.7 percent, Trinidad & Tobago by 1.8 percent, other Caribbean increased 5 percent while the UK decreased by 9 percent. The decline in the UK market may be attributed to the loss in value of the pound sterling which makes travel to Barbados more expensive. 

The STR January 2017 Report informed of a 4.5 percent decline in occupancy for participating properties with a 6 percent increase in ADR and a 1.3 percent increase in RevPAR. (STR REPORT)

One of our Online Travel Agent (OTA) partners informed that they achieved 7 percent growth in their numbers. This was occasioned by hotels responding to the market with better deals during the month and resulted in shorter stay, last minute bookings. Specific reference is made to this to alert that even though our BHTA survey projections inform of decline occupancy for the winter period from those properties reporting, hotel actions in the coming weeks can occasion a different result.

We as Tourism practitioners have to be conscious of the changing dynamics of our industry as well as travelers. There needs to be further analysis and discussions concerning the way business is generated and the characteristics of key players such as Tour Operators, Travel Agents and OTAs in stimulating business out of our major source markets.

Cruise passengers in 2016 increased by 14 percent. For the month of January and February 2017 the Barbados Port Authority (BPA) has communicated an 8 percent increase in cruise passengers. The BPA has also informed of continued efforts in collaborating with the Barbados Tourism Marketing Inc. (BTMI) in executing the Southern Caribbean Cruise Initiative which is focused on promoting cruise travel in the southern Caribbean during the summer months. This is expected to become a reality in 2019.

REGULATIONS FOR AIRBNB AND SIMILAR AGENCIES:

A topical matter in the news recently has been AirBnB. AirBnB as you are aware is an online agency which provides short term rentals in apartments, private homes and some hotels. It is important to note that AirBnB is only one of a number of similar online agencies such as Home Away, Flipkey and Couch Surfing. These online agencies provide visitors to Barbados the option to utilize unregistered accommodation. There are two (2) critical issues which have to be addressed.

The first relates to protecting “Brand Barbados”. Is it not prudent and good sense to ensure that all accommodation types providing accommodation to our visitors adhere to quality standards as instituted by the Barbados Tourism Product Authority (BTPA)? Failing to implement such a measure could impact negatively on “Brand Barbados” and hurt our Tourism industry.

All of us are aware of the instantaneous utilization of social media to convey visitor experiences. Every effort needs to be made to ensure that only positive messages are circulated about Barbados as a Tourism destination while also portraying positive visitor experiences in our destination. The BHTA has been given the opportunity to submit comments on proposed Regulations for unregistered accommodation.

The development and implementation of these Regulations is urgently needed to safeguard our accommodation sector. The issue of taxation is a matter which is also being given consideration by the BTPA as it relates to unregistered accommodation. The objective of the BHTA secretariat is to work closely with our Tourism partners in advocating for a “level playing field” in the accommodation sector.

As we encourage more persons to come to Barbados it is imperative for us to engage in actions to provide a very positive visitor experience. This requires that all Tourism players while not in any way compromising their job functions conduct their actions in a manner which portrays a positive image of Barbados.

GRANTLEY ADAMS INTERNATIONAL AIRPORT (GAIA):

The first experience that our stay over visitors have of Barbados is provided when they disembark their aircraft and are processed through the Grantley Adams International Airport (GAIA).

Excessively long delays, extremely long queues and an unwelcoming environment is not the first impression we should provide for our visitors. Through discussions with the Ministry of Tourism, GAIA Inc., BTMI, BTPA and Customs we have been assured of the following:

  1. Sixteen (16) Automated Passport Control Kiosks will be utilised in the Arrivals Terminal. Initially these Kiosks will be for the use of Caricom nationals only (including Barbadians)
  2. Removal of that portion of the wall in the Arrivals Terminal from the area of where the BTPA office is located to the end where the opening is for entry to the Customs officers.
  3. Introduction of scanners in the customs area in the Arrivals terminal
  4. Reintroduction of sniffer dogs in the Arrival Terminal and
  5. Removal of Immigration on Departure.

The government officials have informed that these measures are aimed at improving the visitors experience at the GAIA Inc. The realization of these measures would prove to be beneficial to both Barbadians and visitors.

AIRLIFT

The airlift coming into Barbados for the winter season out of our major source markets provides significant accessibility to our island. The present flight schedules inform that American continues to fly twice daily out of Miami and once weekly out of Charlotte. JetBlue is flying fifteen flights a week out of New York, a daily flight out of Fort Lauderdale and two flights a week out of Boston. Delta airlines is also providing twice a week service out of Atlanta. Air Canada has ten flights a week out of Toronto and four flights a week out of Montreal. In addition to Air Canada, WestJet is flying four times a week out of Toronto.

As it relates to airlift out of the UK and Europe British Airways provides twelve flights a week (with thirteen flights in the peak period) while Virgin Atlantic is providing seven flights a week out of London Gatwick and two flights a week out of Manchester. The BHTA welcomes the news of the twice weekly flight by Virgin Atlantic out of Heathrow. We are excited by this news especially at a time when we have observed declines in occupancy for our luxury properties. We are of the opinion that this new service out of Heathrow will provide an impetus for occupancy growth for our luxury properties which represents an important segment in the accommodation sector.

Thomas Cook provides three flights a week out of Manchester while Condor is providing two flights a week out of Frankfurt and one flight a week out of Munich. We also have a twice a weekly service on Avianca from Bogota.

MEMBER ISSUES:

In an effort to ensure that we engage with our members and address their concerns the BHTA requested that members inform the secretariat of the major issues and concerns which they have. The major issues related to:

  • Beach Harassment
  • VAT Refunds
  • Land Tax Rebate
  • Visitor Feedback about the GAIA Inc.

Beach Harassment

The Safety and Security Committee has discussed this. The Royal Barbados Police Force (RBPF) is a member of this Committee and will conduct further investigations on this matter.

VAT Refunds

The Barbados Revenue Authority (BRA) informed that it is challenging given the cash flow realities to consistently provide an offset for VAT owed to members. The Finance Committee of the BHTA on behalf of its members is proposing to initiate discussions with the banking sector about the possibility of providing a Factoring programme similar to what is provided for small businesses though the Central Bank and facilitated by the Commercial banks. The thrust of the programme is to allow our members who are owed VAT to be paid a discounted amount in advance so that when the money is paid by the BRA the facilitating banking institution will receive these outstanding monies. This type of programme normally has a ceiling relating to the maximum amount which can be facilitated. It is proposed to have discussions with NIS to explore the options that may be available as it relates to offsetting the VAT monies owed against NIS requirements.

Land Tax Rebate

Any member who has overpaid their land tax in any given year can apply for a credit in the next year. This is a standard procedure by BRA.

Visitor Feedback -  GAIA

This matter was dealt with earlier as it relates to the visitor experience though the GAIA.

Reintroduction of the Newsletter

Members are aware that the BHTA Newsletter was reintroduced in January this year. The Newsletter is to continuously update and inform members on those critical matters which are being pursued by the BHTA. I wish to thank our staff particular Ms. Kathy- Ann Grant and our Social Media Consultant Rashad Hinds. Thanks also are being expressed to Ms. Kathy-Ann Gilkes for all her guidance and assistance.

LINKAGES:

This morning we had the benefit of an insightful discussion on the topic “Improving Economic Performance Through Enhanced Tourism Competitiveness”. Tourism also has the ability of accelerating economic growth and increasing employment through the strengthening of linkages with other sectors of the economy. Farmers, manufacturers and craft operators are some of the players capable of providing inputs to supply Tourism enterprises. The BHTA is collaborating with the Barbados Agricultural Society (BAS), our Associate Member, to strengthen the linkage between Tourism and agriculture. We have already provided the BAS with a list of items which our hotels require and we will be having further discussions with them to determine the produce they can consistently provide to our hotels so that we can make import substitution a reality.

In addition, the IDB funded Multi Literal Investment Fund (MIF) Project is providing the investment through the creation of a central facility and exposure to new operational techniques for farmers to better equip them to sell their produce to Tourism enterprises as well as cruise ships.

CONCLUSION

What I have presented are some of the major activities which the BHTA has been executing during the first quarter. Of course, there are many more actions which would require substantially more time for me to inform on. Every day we at the BHTA engage in actions to facilitate growth and development in the tourism industry for our members but also for Barbadians. 

The changing global tourism industry coupled with the gradually intensifying competitiveness of destinations requires immediate and flexible actions if Barbados is to be a competitive tourism destination. It is critical for all tourism players, Government, Private Sector and Labour to collaborate on measures which enhance our competitiveness through timely infrastructural developments greater utilization of technology, increased productivity, enhanced business facilitation and strengthening sectoral linkages.

The sustainable development of this very important industry can provide significant economic and social benefits. I leave you with this well-known mantra to us “Tourism is our business, let’s play our part.”


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