Small hotels struggling

The availability of funding is proving to be one of the major headaches for small hotels around the island.

And an Opposition group in discussions with several today said something needs to be done about various proposed funds properties are finding hard to access.

Opposition Leader Mia Mottley and a team comprising Shadow Minister of Tourism, Santia Bradshaw, and Shadow Minister of Small Business, Cynthia Forde, along with a group from Intimate Hotels of Barbados, led by Chairman Renee Coppin, toured a number of hotels including Nautilus, Rostrevor, Oceans 15, Oceans 2 and ending at Pirates Inn.

Bradshaw said during a media briefing at the end of the tour: “The Barbados Government has not been in a position to provide a number of funds to the small hotels over the last three years. A lot of the marketing support that they would have become accustomed to that would have allowed them to market their product, even independent of the Barbados Government and the BTA have not been available and accessible to them.

“So we have a situation where we know that there are a number of challenges internationally and we know there are a lot of challenges here in Barbados, but at the same time, without the necessary support to be able to properly market the product, the hotels, in particular the small hotels are obviously struggling to make ends meet.”

Mottley added: “What has come through clearly is that you need the marketing support and small hotels do not have the scale and flexibility to do their own marketing because they literally have a smaller revenue base than a larger hotel.

“So in the absence of the marketing subvention that was previously received, I believe that subvention has not been available since 2011, they would obviously be a reduced marketing presence and I believe it was said since 2010 they have not been able to keep the marketing presence in the overseas markets. So those are some of the things that need to be addressed urgently.

“The other thing is the question of the capitalisation of the Small Hotels Investment Fund. The reality is that most of the hotel do not have the cash flow or the balance sheets that will allow them to borrow easily from banks. They are not even getting the working capital in many instances,” said the Opposition Leader.

The intent behind the fund, she explained, was for hotels to be able to borrow for a period of 15 years, with a five year moratorium and the other 10 years with a concessionary interest of 10 per cent.

“Unless the Government recapitalises that, which they have promised to do, but like with the sugar industry, a promise has been made but the hotels are yet to see the funds or yet to have been told that the funds have come in, such that they are in a position to borrow to refurbish.

“There is a direct link between refurbishment and the rate at which you can charge for your property. A tired property with tired furniture can’t charge as much as you would normally do… That timeliness of funding and that ability to give small hotels that concessionary finance by recapitalising the fund, one hotel earlier today benefited from it when it first came out. They are in need to review again. One hotel is recent, so they don’t need it, but the other two do. They have to be in a position to meet the need, otherwise we cannot be in position to reposition the sector.” (LB)

One Response to Small hotels struggling

  1. Adrian Loveridge May 24, 2013 at 4:38 am

    Government has called on our small hotels to refurbish and upgrade, yet when they do, they then (as in our case) keep them waiting up to 3 years and 7 months for agreement VAT refunds.

    It is the height of hypocrisy.


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