Caribbean hotel fears after operators adjust terms

Caribbean hotel owners say they fear for their future after numerous tour operators changed their payment terms.

The Caribbean Hotel and Tourism Association (CHTA) said that operators around the world, including some UK brands, had stretched their payment to up to 120 days after client check-out, leaving them facing “survival issues”.

The CHTA said the issue was “severely impacting” hoteliers, adding that it had written to Abta and equivalent national travel associations around the world to express concern on behalf of its members.

It said 69% of its Caribbean hoteliers had said they have not received payment from tour operators for services rendered during Q1 of 2020.

The association said the average amount owned to hotels by tour operators was $219,000, with some hotels reporting outstanding balances in excess of $1 million. One hotel has claimed it is owned $15 million.

Hotel members of the CHTA said that tour operators had cited staff shortages, high demand and cash flow as the reason for the delay, with the average payment date being an additional 60 days.

Frank Comito, chief executive and director at the CHTA said many hotels hadn’t been paid for services delivered during the first quarter of 2020, prior to when the pandemic took hold around the globe. He also highlighted that consumers would have made payment in advance to tour operators for their holidays and will be unaware their money has not been passed on.

“Essentially monies which were collected should’ve been held in trust for prompt reimbursement immediately following the guest’s stay,” he said.

“Caribbean hoteliers, many which are family-owned and small to mid-sized operators who have expended costs for labour, supplies, utilities, taxes, etc in advance to service these travellers, are out of pocket on cash flow, and now when compounded with the broader impact of the pandemic are faced with survival issues.

“For a small operator to be out of pocket in excess of $200,000 – this can make or break their business.”

Abta said it did not get involved in members’ commercial arrangements.

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