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Practical solutions to Tobago’s tourism woes
In a previous article entitled “Fiddling while Tobago burns” I sought to focus attention on the precipitous decline of tourism in Tobago, and to identify its contributing causes. This week I would like to offer some practical solutions to these problems.
Problem #1. There is a demonstrable lack of government commitment to economic diversification, in general, and tourism’s inclusion in particular.
Solution: Economic diversification should not be a contentious issue. Most economists are outspokenly in support of it. How difficult should it be for Cabinet to publicly embrace it, and tourism’s future participation in the process?
Cabinet’s decision to replace TDC with a licensing authority and two separate marketing agencies, one for Tobago, and the other for Trinidad, is an encouraging a step in that direction. These are two quite different destinations, with separate, but complimentary products. They should be developed and promoted independently of each other, but under a national brand since T&T remains one country.
If, however, they are managed in the same haphazard, bureaucratic way that TDC was run, it will make absolutely no difference.
Each agency should now be managed by a recognised tourism professional, with oversight provided by a board of directors comprised of industry experts.
Problem #2: There is a public misunderstanding of the genuine value of tourism to T&T’s economy
Solution: Adopt and maintain the UNWTO and/or WTTC satellite system of accounting, which clearly defines and measures the direct and indirect economic benefits derived from tourism. The results of this information should be regularly promulgated in the media.
At present public perception of the benefits derived from tourism do not extend much beyond the number of visitor arrivals, where they come from, and in which hotels they choose to stay. A satellite accounting program measures not only such direct benefits, but also includes all the ancillary activities that make up the wider vacation experience, as well the indirect economic impact of all the goods and services provided to hotels and restaurants
Problem #3: For much of the last 10 years TDC has been governed by successive boards, whose directors have, almost without exception, lacked any knowledge of, or experience in, tourism. This has been further compounded by the absence of expert professional management.
Solution: The two new marketing agencies, and the proposed licensing authority, should be managed by accredited tourism professionals, and their appointed directors should be selected from such trade associations as THRTA, THTA and TITOA, rather than based on party loyalty.
Tourism is not rocket science, but because it deals in the complexities of constantly changing consumer expectations, and the dynamics of the travel trade through which it is marketed and promoted, it requires professional management and industry understanding
Problem #4: Tourism budgets have been slashed from $60 million to $19 million over the last two years. Tobago arrivals have fallen from a high of 88,000 in 2005 to less than 20,000 last year, while arrivals to the rest of the region have been steadily growing. Consequently T&T is seen as the tourism basket case of the Caribbean.
Solution: Destination branding, professional marketing, and credible international representation all cost money. A realistic budget, supported by an approved marketing plan, must therefore be allocated to do this work. Destinations like the Bahamas, Barbados, and Puerto Rico invest upwards of US$50m annually for this purpose.
For years now the tourism industry in T&T has been starved of adequate funding resulting in a complete absence of any destination promotion. It is now essential that it receives a realistic budget with which to initiate a much needed promotional thrust.
The tourism industry generates substantial revenue in the form of a 10 per cent room tax (paid by visitors), VAT, corporation and income taxes. It is estimated that the 60 per cent of the Trinidad hotels reporting occupancy and ADR data to Smith Travel Research, generate some $60TTm annually from room tax alone. Add in the tax collected in Tobago, and the other 40 per cent of hotels in Trinidad, and the number will obviously be considerably higher.
The promotional budget for tourism should never be less than the total room tax collected from hotels, and should be considered as a self-funding investment with a demonstrable ROI, not as an expense.
Problem #5: Since the beginning of the year TDC has cancelled all but one of its international representation contracts. It has therefore been deaf, dumb and blind in 4 out of 5 of its source markets.
Solution: It is quite impossible for anyone sitting in Port-of-Spain to keep pace with the changing dynamics of such diverse markets as USA, Canada, the UK, Germany, and Scandinavia. This necessarily has to be assigned to tourism professionals living and working in those countries.
It is therefore vital that properly qualified marketing experts be immediately recruited, and then contracted for a minimum period of three years to do this work.
Each one should then be mandated to develop and submit a marketing plan for approval by the relevant marketing agency, which would then provide oversight (not interference) in its delivery.
Problem #6: Tobago has no credible tourism airlift out of North America, only second stop service out of the UK, one weekly charter flight out of Germany, and no longer anything more out of Scandinavia.
Solution: Airlines will only fly where they can realistically expect to carry passengers. If the demand is not there, due to the complete absence of destination promotion, they cannot reasonably be expected to fly. It does not help that the ANR Robinson Airport at Crown Point is an anachronism from last century’s aviation world.
For a tourism destination such as Tobago, airline seats have to be matched with hotel beds for tour operators and OTAs to sell their packages, and Tobago remains desperately short of international quality rooms.
A demonstrated commitment to tourism in the form of serious and continuous destination promotion, a long overdue upgrade of Tobago’s airport and, most important of all, the addition of more international quality rooms would completely change this paradigm.
A Sandals/Beaches resort would tick most of these boxes.
While changing planes in Piarco to get to Tobago will never be an option for international passengers, an upgraded service on the air and sea bridges would be a great inducement for visitors coming from Trinidad, still a major market for many Tobago hotels, particularly the smaller ones.
Problem #7: Resulting from lost traffic out of its traditional markets, hotel occupancies and average daily rates have collapsed, leading to reduced maintenance schedules, payroll reductions and even the potential for closures.
Solution: Several years ago government approved a hotel upgrade programme, whereby it committed to rebate 25 per cent of funds invested by hotel operators for product improvement. The programme was launched in Trinidad, but was delayed in Tobago while the THA squabbled with TDC as to who should disburse the funds!
The only sure way to address falling rates is to use the relative downtime to upgrade the quality of the hotel product. This programme should therefore be quickly revitalised, made much more generous and user friendly, and used as a catalyst to achieve its original objective
Problem #8: Tobago needs more international quality hotel rooms. No new hotels have been built in Tobago this century, largely because of the draconian restrictions of the land licensing regime, further constrained by uncompetitive investment incentives.
Solution: Relax the land licensing regime, and conduct a study of investment incentives in other warm weather tourism destinations, not just in the Caribbean. Review its findings for relevance with international developers and their brand partners.
Rewrite the T&T investment incentive regime to be competitively attractive, then convene an investment conference to market the development opportunities in both Trinidad and Tobago.
Problem #9: Both islands have a rich base of “touristic” activities that make up the visitor experience. Currently these are not officially certified. In most cases they are not even widely known, and therefore cannot be used to attract visitor flows to either island.
Solution: The new Licensing Authority should be mandated to catalogue, inspect and certify each of these activities and attractions with a view to ensuring that they meet international standards. Where necessary, funds should be provided to make any improvements required. They should then be packaged and promoted through the newly appointed international reps as supporting reasons to come to T&T.
As a point of reference, Jamaica has more than 150 listed attractions and activities officially certified and promoted by the JTB.
In conclusion: While tourism in T&T, particularly Tobago, is presently in dire straits, its potential remains undiminished. Both islands are exceedingly beautiful in their quite different ways, they have excellent hotels (but not enough of them), and an excitingly diverse range of things to see and do, some quite unique.
If we want to develop our tourism industry, and use it as a tool to diversify the economy, create jobs and generate foreign exchange, we must openly commit to its development and promotion, instead of trying to be half pregnant.
Give tourism the resources it so desperately needs, and manage it professionally.