Time to act
Hotelier says critical steps must be taken to prevent more closures
There is a concern that as many as ten small hotel properties could close their doors in 2014 if Government and tourism officials do not quickly put certain measures in place.
Officials in the industry say, however, they are focused on doing what they could to prevent any closures. About 35 hotel properties have closed in Barbados over the past 20 years.
Adrian Loveridge, director of Peach And Quiet (Barbados) Limited, told Barbados TODAY 2013 was “an extremely challenging” year for small hotel operators and he did not see things improving unless some critical steps were taken.
“I am very concerned. To be honest, I can’t see, until Government starts implementing some of the many plans it has suggested, I can’t see it getting any better,” said the hotelier.
“The next three months are going to be absolutely critical in our tourism industry because the hotels haven’t been making any money. They have been carrying through a poor winter followed by a dismal summer.
Now they are hoping they can trade out this winter and at least make up for some of their overdraft and borrowings from the winter revenue. If they don’t get that, without being an alarmist, I see another ten plus hotels closing once we go into the summer,” said Loveridge.
He did not identify which properties he thought were more likely to go out of business.
The industry stalwart said there was a need for the lowering of taxes on some imported items used by the industry that could not be consistently sourced locally, as well as “a lot more cooperation” between hotel operators.
“Even if it is not a prolonged thing, for a period maybe five years, treat us as any other export industry and take the taxes off. I am sure the revenues would increase, the volumes would increase and we would become more competitive, have higher occupancy in our hotels which mean more need for taxi and other transportations, restaurants et cetera. That is the only fair way to do it,” explained Loveridge.
“The Government will still collect taxes; they will still collect VAT, collect income and corporation taxes but they wont necessarily collect taxes on imported items. I think the industry has to demonstrate to Government that can be achieved and I think even if it was put in initially for a year that might just about be long enough to demonstrate to Government that it works and then look at it again in a more sustainable way,” said Loveridge, adding that the industry was not begging for handouts.
Meanwhile, Renee Coppin, chairperson of the Intimate Hotels of Barbados, the group that represents about 52 of the island’s small hotel properties, shared the belief that Government should at least give small hotel operators a tax break.
“When we talk about competitiveness of our product we have to look at taxation as one of those things and how it impacts on competitiveness on a whole,” said Coppin.
She told Barbados TODAY she anticipated 2014 to be a challenging year that would require all hotels to work closer together to ensure their survival.
“In this environment, we remain concerned about the viability of our properties. So I am not going to gloss over it and pretend it is not a concern,” said Coppin, adding that 2013 was a year filled with challenges for the Intimate Hotels of Barbados.
She said the group was “trying to remain focused on things we can improve and can control to move our sector forward” and things they could do differently in order to keep the hotel properties viable. “The recession has and continues to affect us severely but I think we are trying to also, where possible to reduce our cost, look at ways we can work better together to improve our buying power and generally, where possible we can improve our marketing reach,” she explained.
The Intimate Hotels of Barbados group represents about 15 per cent of the island’s hotel room stock, employing more than 550 people.
She said there was a need for the development of a consistent marketing message and consistent delivery of that message with stronger focus on core target markets such as the Britain and CARICOM.