Gloomy Tourism Days Ahead

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

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2 Responses to Gloomy Tourism Days Ahead

  1. waxman0 says:

    4 or 5% ??
    With all due respect to Dr Williams (who I do respect) – that just aint right. I am sure she knows much better but she also knows the political implications of the truth.
    First – the recession does not have to be ‘deep and prolonged’ for arivals to drop 20%. We will see that or worse in winter 2009/10.
    Second – ‘deep and prolonged’ this ‘recession’ certainly will be. I am sure she knows it. All of the major governments of the world know it and are shaking in their boots – from the Americans to the British to the Chinese. I have personally seen gigantic amounts of wealth destroyed here in Europe – amongst people that I speak to every day, every week – exactly the same people that have parted with obscene amounts of cash in Barbados many times over the years. They will not be going this year, nor next year nor the next. It is now dawning on the general public here how bad things are going to be. Many top financiers are privately preparing for YEARS of recession. The music has completely stopped here and it will stop in Barbados very soon.
    Ask around how many of our ‘upmarket’ visitors are in the financial industry, or property, or business owners, or big shareholders in major businesses, or heavily invested in mutual funds, hedge funds and private equity. Now look at how all of these have collapseed and are still collapsing. A friend of mine who was sitting on years’ worth of bonus shares in his bank has seen them drop in value 90% in one year – 90% people. And these ‘upmarket’ visitors also borrow heavily against their ‘assets’ which have now collapsed in value – so they have to pledge more and more assets to their creditors or worse yet cash (google news items on David Ross – an extreme example)
    This is not a joke. It is the absolute truth and it is happening NOW. These guys are not coming to Barabados any time soon.

  2. Pingback: Standard & Poors Cuts Barbados Foreign Currency Ratings « Bajan Global Report

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