The region has the capital to inject life into the struggling tourism sector.
It is just a matter of finding the best investment option.
This is the assessment of Doctor Justin Robinson, head of the department of management studies at the University of the West Indies, Cave Hill (UWI). He was speaking during the opening ceremony of the sixth Tourism Human Resource Conference at UWI last Wednesday.
“As we struggle with the recession, there is no path to an economic recovery that does not involve a robust tourism recovery. . . . Why doesn’t our most important industry provide an adequate rate of return for investors?” Robinson asked.
“The money is there. There is no shortage of capital in the region right now. But how do you craft investment instruments that really match the rate of return so that pool of capital can come into the sector, because the sector is clearly in need of financing,” he said.
Robinson, who is also a director on the board of the National Insurance Board (NIS), added: “At the NIS I have seen a lot of tourism-related proposals and two measures always come into play; the economic rate of return; how does this project benefit the overall economy, and then you have the financial rate of return; how does this project work for the investors who are putting in debt and equity, and in almost every case there is a clear dichotomy”.
He said that based on research, the tourism sector in Barbados was in “urgent need” of an upgrade but financiers were “scared” of putting money into it.
“The only way out really is in the human mind. What I have learnt in the last year is that the technology of financing in the sector really hasn’t moved beyond simple bank mortgages, [people] putting in equity. As a finance person, I know the range of financial instruments stretches much further than that.
“So I think the time is ripe really for some financial innovation within the sector, because there is no path to a recovery that is not paved along the road of tourism. It has become very clear to me in the last year that at the financial level our traditional financial sector, using traditional financing instruments will not provide the capital to actually drive this industry forward,” Robinson explained. (MM)
