BREXIT and falling Sterling will affect Barbados Tourism – Adrian Loveridge

  By Adrian Loveridge

The ongoing Brexit debacle has produced a new British Prime Minister and cabinet, seemingly intent on mimicking the Disney created urban legend documentary, depicting a lemming-like suicide by leaving the European Union on 31st October 2019, regardless of the cost to its own population and the inevitable effect it will have on both domestic and overseas tourism.

By now I would imagine that our tourism industry policymakers and planners have gone into ‘hyperdrive’ while attempting to fully evaluate the potential damage which resulted in further downward pressure on Sterling against the US$ (last week a 28 month low), together with the consequential repercussion it will have on the cost of living for most UK residents and their ability to absorb massive increases in holiday prices with depleted disposable income.             

While we remain a tour operator driven destination those companies will have no alternative but to pass on increased currency and other costs to the consumer, unless once again hoteliers are coerced to accept reduced contracted room rates to save the business.

We have recently witnessed a major airline giving notice of withdrawing from one of our regional competing islands and if media reporting is accurate, the underlying reason is the failure to agree a substantial subsidy to offset the real cost of maintaining the route.

Further reduction in passenger volume on flights into the Caribbean will again bring into question, any airlines justification to sustain service below economically loaded aircraft.

And less we forget, British based airlines flying into the region still have to pay for aviation fuel and leased aircraft in US$.

Another major consideration is that the overwhelming majority of tour operators rely on forward bookings, and the payment of deposits to keep them in business.

Retail prices which are shown in their printed or online brochures are agreed, often a year in advance, based on the rates they negotiate with hotels and villa owners or their management companies.

These prices are of course based on a speculated rate of currency exchange, with perhaps the larger travel entities buying forward (hedging) to hopefully minimize any detrimental impact of a declining Sterling value.

If they cannot absorb any differential, or the hoteliers are not willing to reduce previously agreed rates, the only option is to apply surcharges, which as a former tour operator is loathed by both the holidaymaker and travel company.

Surcharges would be levied across all holidays which involve currencies that are paid for, outside the United Kingdom.

But in our special circumstances, where a whole range of additional taxes have been applied during the last year, it is another step towards being perceived as a destination that no longer offers value-for-money.

I believe ‘we’ are now on that fine line with our tourism offerings, and unless corrective measures are shortly put in place, then everyone who earns a living out of the industry should brace for the impact.

Some may consider these views as alarmist but in the cold light of day, we have no absolute right to demand that people visit Barbados.

We have to earn and entice every single person to our shores and not surprisingly, many of our British arrivals will have to try and justify these huge increases in costs to holiday here.

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