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Barbados project to help small hotels in trouble

By John Collins (1)

Reduction in staff and budgetary cutbacks hits Gems of Barbados; viewed as result of tourism slowdown; others see it as politics.

BRIDGETOWN, Barbados – Widely viewed as one of the most attractive destinations in the eastern Caribbean, Barbados has for a long time been enjoying the patronage of visitors from the United Kingdom, the U.S., Canada and elsewhere.

But even before the terrorist attacks in the U.S. last September (9/11), Barbados was experiencing a gradual slowdown in arrivals, increasing weakness in some of its traditional markets and growing competition from other destinations, both in the Caribbean as well as elsewhere in the world.

Barbados has the second highest per capita income ($9,682 per annum) in the English-speaking Caribbean and an estimated 16% of the island nation’s gross domestic product is concentrated in tourism ($711 million). Barbados, occupying 166 square miles, has a population of 269,000.

With an inventory of 9,000 rooms, Barbados received 545,000 overnight visitors in 2000 along with another 495,000 cruise passengers. Even before 9/11 last year an increasing weakness in overnight visitors  had the tourism sector nervous and then after the catastrophic event it virtually collapsed for the last quarter of the year before slowly recovering.

In conversations with veterans in the Barbados hotel industry, there is general agreement on what are the problems, it is on some of the solutions that there are major differences and on one in particular.

More than half of Barbados’ hotel rooms are in small properties of 75 rooms or under. There are no properties affiliated with multinational hotel chains although the Barbados Hilton, which is presently closed for renovations, is scheduled to reopen in two years. As competition, from elsewhere in the region as well from other parts of the world has continued to increase, it has been more and more difficult for Barbados to maintain its position in the marketplace.

Alliance of small properties 

Before the setbacks of 2001 the government of  Barbados Prime Minister Owen Arthur came up with a concept to form an alliance of smaller properties which would benefit from common sourcing as well as well as shared sales and marketing in order to remain more competitive. As originally envisioned it was to include 16 properties of various sizes with the government providing financial assistance to underwrite the venture.

A majority of the properties (12) pulled out of the proposed alliance and in the end only four went forward with it. They are Blue Horizons (129 rooms), Time Out at the Gap (76), Silver Rock (70) and the Savannah (100)

Each already had well-established market niches which continued to patronize them. For example, Blue Horizons on Rockley Beach has a good mix since it is popular with visitors from abroad and the rest of the Caribbean, government officials and business travelers and returning Barbadians from abroad. Time Out at the Gap has successfully targeted a younger set with its disco, sport pub and proximity to beach and night life.

Silver Rock, on a two-mile stretch of beach, is very popular with the water sports and windsurfing sets to which famed sports personality Brian Talma has been promoting European groups by charter flights for several years. The Savannah, near to Bridgetown, has attracted a higher level of clientele attracted by its ambience and cuisine as well as meeting facilities. Earlier this year, a group including famous American lawyer Johnny Cochran held a meeting at the hotel. Cochran was said to be so pleased with the property  that he started talking about buying it but Gems reportedly was not interested.

The rising profile of the Gems group did not set well with a number of other hotels who, suffering from the fall out of 9/11 and the continued weakened market abroad, did not look kindly on having to compete with an alliance enjoying support from their tax dollars. Some government officials, including ministers, defended the Gems project even as the amount of financing it required increased. It is impossible to learn how much money has gone into the Gems project but its critics estimate it at more than $60 million. As expected the opposition Democratic Labour Party (DLP) has been hammering the subject home repeatedly.

Since one of the properties (Silver Rock) had been purchased from a former prime minister of the ruling Barbados Labour Party (BLP) and his daughter had become the manager of one of the other properties (Time Out at the Gap),  Gems increasingly became a source of embarrassment to the Arthur government. It recently lowered the boom and as the result of reduced financing, several top level executives were severed.

Arthur is increasingly criticized by his opponents for his perceived dictatorial style of governance. He is in his second term and although elections are not due before January 2004 and his BLP enjoys an overwhelming majority, some observers believe he will call early elections  next year because of the economic difficulties, especially in tourism, that  the country is experiencing and attempt to catch the disorganized and weakened opposition DLP off guard.

Since independence neither party has retained control of the government for more than two terms. With the situation showing few signs of early improvement, it is being watched carefully by Barbadians, nervous about their weak economy as well as  regional observers.

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1) Other articles by the well known Caribbean author John Collins can be read at:

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August 11, 2002


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