Gloomy Tourism Days Ahead
December 13, 2008 2 Comments
Barbados could see a four to five per cent drop in tourist arrivals next year that could translate into a similar fall in revenue from the country’s largest foreign exchange earner and the loss of thousands of jobs.
But the news could get even worse, according to the country’s Central Bank Governor Dr Marion Williams: “If the global recession is deep and prolonged, tourist arrivals could decline by 20 per cent.”
And while it is still too early to determine whether the reduction will be as drastic as that, Dr Williams has revealed that the Central Bank’s short term outlook for tourism is not rosy.
“The Central Bank has developed various scenarios. A most recent forecast calls for a four to five per cent decline in the long-stay visitors in 2009 and no growth in 2010. Gross expenditure could be nearly down four per cent in 2009 before a small recovery in the following year, and during 2009 our foreign exchange reserves may fall by well over BDS$100 million (US$50 million),” she said as she addressed the Barbados Hotel and Tourism Association’s (BHTA) final 2008 quarterly meeting.
With these challenging times ahead, the Central Bank Governor has urged the industry to be modest in its spending.
“If we cut back sharply on the spending on new projects, we will hasten the recession, which we wish to avoid. If we spend too rapidly, we will deplete our foreign exchange reserves,” she said. “We have to have a compromise situation where we don’t overspend and we don’t under spend.”
The Central Bank Governor also urged hoteliers to get commitments of support from their bankers very early to ensure that when the situation gets rougher, they have financing to help cover operational costs.
Meantime, BHTA Executive Vice-President Sue Springer reported that hotels are already feeling the effects of the crisis.
“The majority of the hotels are seeing a reduction in the pace of bookings – anything from about five to 25 per cent; on average 15 per cent overall,” she said.
The good news, Ms Springer added, is that cruise passenger arrivals are still good.
Source: Caribbean 360