Recently elected president of the Barbados Hotel & Tourism Association (BHTA), Patricia Affonso-Dass, says she is passionate about the growth and development of the tourism industry.
During a visit to NATION?HOUSE this past week, she fielded questions from a number of editors on the threats and challenges facing the sector, and the key areas in which action should be taken – sooner rather than later.
The following is an edited version of that interview.
The BHTA has often called for changes in the legislation governing the industry. Exactly what adjustments do you want to see?
Affonso-Dass: The BHTA has been continually talking about the Tourism Development Act. This was a piece of legislation that was extremely progressive when it was introduced in 2002. It addressed the need for the industry to be dynamic.
One example of a change would be keeping the list of items on the duty-free list current, updated and relevant to the need of our industry to be internationally competitive, thereby giving us the best chance for success.
The legislation provides the framework for this to be done quickly and effectively. Timely changes to the list would make the cost of refurbishment lower and allow hotels and other tourism services to stay updated.
The example we often cite is that when the initial list of duty-free items was given, a clock radio was the common bedside amenity; now it’s an iPod docking station.
However, this is not on the list, so while it is the international industry standard, many operators would not put it in because when compared to a clock radio, it is considerably more expensive with the duties.
This is a very simplistic example, but magnify that out to beach umbrellas, towels, linen, furniture . . . . If a hotel is looking at redecorating or improving the product, duties of 60 per cent or possibly higher are a significant difference between whether you can afford to do it in a way that sets you up for your best chance of success, or causes you to do something that is mediocre, or not do it at all. That’s the trap that the industry is in.
But people say it’s a business, and if you argue that in tourism, someone can argue it in manufacturing, international business and so on for more concessions. Where does it stop? To use our Prime Minister’s famous phrase, the nipples would be sore?
Affonso-Dass: I’m not suggesting that we should be completely tax-free. I’m simply saying that we need to be more aggressive in the way we look at the legislation. We need the most enabling environment for growth and we need to ensure in the public and private sector that we are being realistic about what is needed, rather than focusing on what the industry already has. There are some obvious items that can be addressed that would bring some relief and make a big difference to the look and feel of the industry.
Ultimately it would improve the amount of tax collected by the Government because once your numbers are going up and your profitability is improving, the Government is going to collect more tax, like VAT. So it’s self-defeating if we are not looking at it the other way – Government should want the most viable, profitable businesses because they are only collecting money if the business is profitable.
Do you think then that Government should have put more incentives in the last Budget for the tourism sector?
Affonso-Dass: I hoped there would have been items that offered more immediate relief and relief to a wider range of players in the industry. We talked, for example, about our attractions, and a number of them are struggling to stay alive. How do we help them to stay more competitive?
The comments that I made shortly after, that they weren’t wide-reaching enough, I stand by them and they reflect what is felt by the association and the majority of its members. We hope that we can have some additional discussions with the Minister of Tourism and the Minister of Finance on this issue and I have asked to have this facilitated as soon as possible.
So is the meeting with the Prime Minister not on any more?
Affonso-Dass: A request was made by past presidents of the BHTA for a meeting with the Prime Minister and they continue to be desirous of having that meeting.
As the new BHTA head, have you received any response from the Prime Minister?
Affonso-Dass: We have not received any response as yet.
Are you holding out hope for a response?
Affonso-Dass: I believe that once one asks a question or makes a request, there is the hope that it will be met with a response.
Were you in the Prime Minister’s or Minister of Finance’s chair for a time, what would be your three top priorities for improving our tourism?
Affonso-Dass: I certainly think that anything which brings relief from the cost of doing business for us is important. Recommendations that were made by the BHTA in advance of the Budget were with respect to VAT – the urgent repayment of outstanding VAT refunds or the ability to write off VAT due against VAT owed by Government, as this would help with cash flow.
Also, the urgent injection of funds to the Barbados Tourism Authority for marketing based on an approved marketing plan compiled by a joint public/private sector team; and for the Tourism Development Act to be revisited, looking at ways of ensuring we can improve and upgrade the quality of our product in a manner that is efficient. I think those three things can immediately make a difference.
Then there are other issues like Staycation and other types of relief that incentivise local people to get them involved and give them a greater appreciation of the product that we have.
We had also made representation on behalf of the direct tourism services for improved incentives. For example, the removal of duties on the safety parts (brake pads, air bags and so on) for rental car companies and for reduction of VAT on attractions to allow their pricing to be more attractive.
From a layman’s perspective, people will be saying that while hoteliers keep crying for all this relief, it is they who will be the ones smiling all the way to the bank?
Affonso-Dass: We keep looking at the tourism industry as a bunch of hoteliers. The industry in this country comprises a vast number of areas, hotels simply being one of them.
Hotels are the vessels in which the visitors stay when they come here,so it is important to have hotels that are appealing, competitively priced and are viable businesses. But hotels are not the be all and end all. The health of the industry is not just the hotels. It is all the spin-offs that happen as a result – the restaurants, craft vendors, furniture manufacturers, those who sell food items and so on.
It has been often said that our hotel plant is quite aged. What exactly is its current state and what needs to be done?
Affonso-Dass: There is a lot of product out there that needs to be updated and improved, but don’t think hoteliers do not want to improve it. I believe it is a case of balancing resources . . . .
What is the BHTA’s position on the pending Almond Beach sale?
Affonso-Dass: We would like to ensure that we have the rooms back, because losing that number of rooms impacts a lot – airlift, employment of a range of persons and so forth. We would also hope that any new buyer would bring significant marketing resources to the table. We would want to ensure that it doesn’t lie dormant for a long period of time.
What about the Silver Point Hotel and the subtle threat from the Barbados Workers’ Union (BWU) of industrial action?
Affonso-Dass: I have seen the information in the newspaper and the BHTA has been in communication with the Silver Point Hotel. If there are actions they have taken or things they have done outside of good business practice or outside of the laws of Barbados, then certainly our position will not be to support that. At the end of the day all of us have a professional responsibility to our staff to ensure that we are treating them fairly and providing safe and secure environments for them to work in.
In terms of the ownership of hotels and guest houses, what’s the ratio of Barbadian versus foreign-owned?
Affonso-Dass: First in terms of management, at the senior management level across the industry, both in the large hotels and smaller businesses, the majority is local. As for ownership, it is now about 25 per cent foreign and 75 per cent local.
How big is the Barbados brand?
Affonso-Dass: It is still seen as a very aspirational brand in the United Kingdom and is the most desirable Caribbean destination for UK travellers. In the United States, we still have a lot of work to do. There’s still not a lot of awareness of Barbados; they still think of us as a Jamaica or an Aruba.
We have a lot of celebrities coming here. Can’t we capitalize more on their promoting Barbados? Can’t we have some arrangement to use them to sell Barbados more?
Affonso-Dass: That’s something that is worth looking at, but it’s a delicate balance between the desirability of a destination where someone famous can be anonymous – and what that is worth – as compared to just being targeted in another place. Many come here just for that purpose [the anonymity]. But there may be ways to secure that perception [but] get some benefits from it.
Are you satisfied with the current airlift? And what impact has the REDjet collapse had on the industry?
Affonso-Dass: REDjet points directly to the need for competitiveness in the industry. If you can get a price point that is competitive, then your numbers exponentially go up. We saw tremendous growth at a reduced price point.
It was a very positive thing; obviously it would be very great to keep those numbers coming.
Caribbean visitor numbers went up significantly particularly out of Trinidad over the period it was flying. This is also a good market for us as Trinidadian visitors traditionally spend well on the island as they enjoy the attractions, restaurants, duty-free shopping and so on.
The ideal for us would be to have more attractive rates for regional travel. And it is not so much the tickets, but the taxes that are added on. So if we as a region can recognize that it is to everybody’s benefit to address those issues, it would be very positive.
In terms of the airlift out of our major markets, we’ve consolidated lift out of the UK. We have fewer flights but not necessarily fewer seats. It’s how we fill those seats that is important.
We need to keep a high level of visibility in our major source markets to support this lift. It’s one thing to get a flight; it’s another to keep it in the air. And this goes back to the discussion on knowing which direction we are going and having the right plans in terms of getting there.
Describe the relationship with the BWU and the plans in terms of wage demands in light of the current economic environment?
Affonso-Dass: The BWU is an important partner with whom we meet and dialogue and there are a number of initiatives we are working on jointly. We don’t always agree, but we talk, and that is very important.
Our negotiations start again in September and we will be discussing where the industry is and what we can afford.
If we don’t have a good winter season, what do you think will happen?
Affonso-Dass: I think we would be in real trouble. You’ll see more closures; you’ll see more attractions going out of business. The consequence of that – look at the Almond situation, for example, all the different things that fed into that, and basically that will play out. Then you have challenges with things like crime because once you have unemployment going up, the incidence of crime [will also]. So we are walking a tightrope.
How would it impact the sector if the Barbados dollar were to be devalued?
Affonso-Dass: I think it would send a very bad signal. The security of being pegged to the US dollar and being seen as stable is a big, big part of what keeps us strong. So that is not something I would want to have thrown onto the pile at this stage.
