Economist, Dr. Justin Ram.
The roll out of the Pfizer/BioNTech coronavirus vaccine in England is good news for Barbados, says a top regional economist.
However, Dr. Justin Ram, the Economic/Technical Advisor to the Prime Minister made it clear to members of Intimate Hotels of Barbados (IHB) that this doesn’t mean an instant recovery of the island’s tourism sector.
“I believe that there is going to be a lot of pent-up demand for persons wanting to travel and Barbados I think will be oneof those destinations that people will definitely want to come to,” he said, also warning that going forward competition will be stiff.
He told the small hoteliers gathered for IHB’s recent end-of year meeting that while hotels may see a return in the number of visitors, return to hotel profitability will be slow.
Dr. Ram explained that countries around the world also want to attract the same British tourists, and advised that local properties offer discounts so travellers are enticed to choose Barbados.
“Because tourism has been down across the world, we are likely to see a number of discounts being given to tourists because people in Thailand will want the tourists to come there, Greece will want tourists to go there, just as we would want them to come to Barbados. So, we are going to have to compete with that, so our average daily rate is likely to be heavily discounted for some time, and I think that is what we have to pay particular attention to,” he said.
Dr. Ram said that Barbados maynot see a return to pre-COVID arrivals numbers until towards the end of 2022.
“But your profitability may take a bit longer – might take maybe a year after that to recover. But I think that your average daily rates in real terms perhaps will not return to where they should be maybe by 2023/2024,” the economist pointed out.
“So, you will see the numbers perhaps coming because of all the pent-up demand, but because there is going to be such a demand for those tourists all around the world everybody is going to be discounting. And so, the arrivals might be up but not your profitability, that’s why now is the time to transform because you have to think about how you reduce your costs because ultimately if your average daily rate might be down you obviously have to do something on your costs to help you improve on your profitability”. (TL)