The Adrian Loveridge Column – 2017 Budget Effect on Tourist Spend

Adrian Loveridge

I just wonder  prior to the announcement of the last budget if the Minister of Finance sat down with the Minister of Tourism and discussed how the possible implications of the proposed huge price hikes would affect the average visitor, their length of stay and spend. This follows the recent TUI chairman’s pronouncement warning of a ‘two fold’ holiday price increases for UK originating travellers.

According to Klaus Mangold, British holidaymakers are being hit by both the fall in the value of Sterling and resulting rising prices across the majority of the more popular destinations.

He said ‘that the company had already noticed Brits taking shorter holidays as a result of rising inflation, with vacations cut down by two or three days on average’. Adding at a Press Association meeting in St. Petersburg ‘that despite attempts to hold costs steady, pressures on margins will mean prices for British customers are likely to rise’ and ‘we are trying to avoid this, but sometimes we cannot avoid it’.

Much has been made of the increased arrival figures into Barbados with a great deal of speculation whether it has resulted in decreased spend or not. Sadly the vast majority of us are left second guessing at what the facts really are, but it is reasonable to assume that a lower value of Sterling when directly compared to US Dollar currency pegged destinations and higher than originally anticipated domestic (UK) inflation will negatively impact on the average holiday spend.

Compound these two fctors with dramatically increased destination prices, which after 1st July will be inevitable and we could soon feel the effect sooner in reduced arrival numbers than anticipated, during the most challenging time of our long summer season.

What should we read into the comments of the travel group Chairman?

TUI Group describes itself as ‘the world’s number one tourism business’ boasting many of the leading tour operator brands, 1,600 travel agencies, six in-house airlines with over 150 aircraft, 300 owned/managed hotels with 214,000 beds and 16 cruise liners. According to their website they ‘proudly offer 20 million customers with an unmatched holiday experience’.

While the company posted a 3.3 per cent rise in revenue for the last six months trading to 31st March 2017, an increase to Euro 6.38 billion, they also declared half-year losses of Euro 308.6 million. So clearly they will have to either further drive down costs, including possibly re-negotiating hotel contract prices or pass the increased costs onto the consumer.

You only have to follow the various social media outlets to see that even the most loyal visitor to Barbados is increasingly questioning the perceived value for money they are getting here. Has Government really thought through the implications of yet higher prices and the overall net revenue generated in the tourism sector?

Our peak winter season is often thought to be less price sensitive, but no one can seriously doubt that with the myriad of summer destination choices, that our British visitors already have. And it would be absolute irresponsible folly to think many are not considering where they can get the biggest bang for their buck?

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7 Comments on “The Adrian Loveridge Column – 2017 Budget Effect on Tourist Spend”

  1. lawson June 19, 2017 at 6:39 AM #

    Lets face it Adrian barbados is a one trick pony, if the govt cant bleed the tourism sector where they going to get the money to pay themselves. All my friends are heading off to vegas, cuba etc mean while I have stayed loyal to the rock. But it is getting harder and harder to justify the cost.

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  2. Hal Austin June 19, 2017 at 6:45 AM #

    Lawson,
    Cuba is also on my bucket list, but certainly not Las Vegas. Have you tried the Bahamas, not just Nassau, but Grand Bahama also?

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  3. Vincent Haynes June 19, 2017 at 8:54 AM #

    You only have to follow the various social media outlets to see that even the most loyal visitor to Barbados is increasingly questioning the perceived value for money they are getting here. Has Government really thought through the implications of yet higher prices and the overall net revenue generated in the tourism sector?
    ………………………………………………………………………………………………….

    Simple answer……NO

    One can see that with the game coming to an end,govt is swiping like blind elder.

    Like

  4. lawson June 19, 2017 at 3:04 PM #

    Hal I have been to cuba a few times,went on cruises for five years in a row hitting a lot of the carribean, barbados is my favorite but it is on the high side. It seemed the extra cost wasnt noticed because of the friendly people and it being very safe and little gun violence. Now i notice everything

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  5. Hal Austin June 19, 2017 at 3:22 PM #

    I know. I like Grenada, but am obviously drawn to Barbados. I also have lots of friends in the Bahamas.

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  6. Lee June 21, 2017 at 5:25 PM #

    That’s right . . . spend the offending foreign exchange. Wooeee

    Like

  7. Hants June 22, 2017 at 2:07 PM #

    SANDALS RESORTS has announced plans for a new resort .

    http://www.nationnews.com/nationnews/news/97980/sandals-resort-coming-st-lucia#sthash.lSTcKNVh.dpuf

    Uh wundah wha concessions duh givin Butch ?

    Like

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