The abundantly obvious subject for this week’s column would have been Brexit and the potentially damaging results it could have on what is still our single largest tourism market, the United Kingdom. But in hindsight, there is so much speculation, unknown elements and possibilities yet to be clearly evaluated it is really difficult to formulate a measured or even an intelligent response.
What is unmistakably and without dispute at this stage, that due to the depreciated value of Sterling it will be immediately make Barbados and the Caribbean more expensive for British visitors. Some tour operators may have ordered forward United States Dollars, so may not have to immediately either absorb or re-negotiate contracted hotel and villa rates.
From my own twelve years as a tour operator in the UK, we experienced significant Sterling devaluation twice during that period. We both absorbed the cost increases without passing them onto the customer but also went cap-in-hand to many of the hotels we used. They were incredibly sympathetic and we came to an amicable arrangement which minimised their depleted revenue while ensuring that they did not lose room nights, particularly at short notice.
During our more than a decade trading period we did not discount a single holiday, but for clients willing and able to pay in full by credit card at least 9 months prior to the travel date we offered a 10 per cent published price reduction. Those monies were then placed in an escrow account that earned a meaningful rate of interest and this would either wholly or partially offset currency fluctuation.
While for many this Brexit has come as an unexpected shock, I think that we can use the situation to focus on ensuring that all tourism partners are giving improved value for money to our visitors. Clearly one of the ways that could help would be for Government to speed up the agreed concessions promised to the tourism industry at large and which only a single player has been largely benefiting from for almost three long years.
And that ‘special one’ largely collects payment offshore in the local currency where the product is marketed, therefore almost eliminating any losses caused by differing exchange rates. This ‘luxury’ is not available to the majority of our lodging providers, especially the smaller properties.
The administration must be convinced by now that there is only one major economic sector that is going to take us out of the current fiscal malaise of debt with currently minimal, if any, GDP annual growth.
I also wonder if Brexit and the lower valued Sterling has created an opportunity for many more British manufacturers to step-up-to-the-plate and increase exports to our region. As we import the vast majority of consumables used in tourism, this again could help soften the blow. One tiny example is that even with a milk glut our virtual monopoly dairy company decided unilaterally to stop making yogurt, a virtual staple at each hotels breakfast offerings. Our choice was then to purchase a product made in Minnesota, which even by air freight is some 2,995 miles away. More likely they are transported by refrigerated trucks and ships at a considerably greater distance.
Perhaps our very pro-active British High Commissioner to Barbados could liase with the BHTA and help identify areas where increased opportunities may be possible. Trade delegations also help fill empty air seats and hotel beds.