Pressure on revenues is forcing Caribbean hoteliers to seek more direct sales, the Antigua and Barbuda tourism minister tells Lee Hayhurst
The dual impact of APD and tough commercial demands from tour operators are forcing Caribbean hoteliers to drive up direct bookings.
Antigua and Barbuda tourism minister John Maginley said the economic downturn has had a major impact on mass-market hotels in the region, which are not making enough money to reinvest in the product.
“They are all suffering,” he said. “It’s no longer cost-effective for someone to go there. Hotels are getting involved in a price war to service the likes of Virgin Holidays.”
Product quality
Maginley said while rooms are being retailed for more than $100 a night, the hoteliers dependent on powerful large-volume operators are getting only
about $50 or $60.
“What are you going to get for $50 or $60 a night? As a customer you have certain expectations, but they are being presented with a $110 a night product and only getting something worth $50 to $60 to the hotelier.
“It drives the quality of the product down. I advise any one of my hotels to set a rate and get Virgin to sell at that rate.
“Recessions are very good at prompting you to look at your business model. When you are not making money you will look at everything.”
Maginley revealed when he took office he found Antigua’s tourist board owed Virgin Holidays £800,000 in marketing funds, half the country’s entire annual tourism budget. It is still paying the debt off.
New website unveiled
At World Travel Market, Antigua took the wraps off a new version of its website, which it hopes will help drive up direct bookings.
Developed by Incite People and based on the Ceros publishing platform, it works across all devices and hotel partners can use the rich content to promote Antigua as a destination.
Maginley said: “We’re giving people the opportunity to book direct. We have to keep building brand Antigua and the option that we can have our own customers. Operators promote their own brands, not Antigua. Once consumers get accustomed to talking directly to Antigua we are going to see a significant amount booking direct.”
APD lobbying continues
The situation in the Caribbean is being made worse by APD, which the region is continuing to lobby the UK government on.
The latest Caribbean Tourism Organisation delegation to meet with UK ministers during WTM was promised answers to its questions.
Maginley said this was a more promising outcome than lobbying over the last four years, which prompted no response.
“We recognise the UK government needs to make revenue. In an ideal world we would like to see APD go away altogether, but the chances of that are very slim,” he said.
The CTO argues that Britain is helping Caribbean countries by providing aid funds but then, perversely, is crippling the region’s main industry through APD.
The CTO is also pushing the “community of interests” argument, claiming the UK has special interests in the Caribbean that are mutually beneficial.
One of APD’s most contentious features is the banding based on distance from London to destinations’ capital cities, which makes the Caribbean disproportionately expensive.
“What we want the UK to do is to make APD more equitable. It is effectively helping to promote the US over a small island like Antigua.
“We have suggested you add £2 to short-haul and bring everyone else into band B – so just have short-haul and long-haul; the change would be revenue neutral.”
Maginley said the impact of APD was adding to the woes of hoteliers and other tourism firms.
“This is not only a numbers game. If I can maintain visitor numbers at 250,000 a year, but improve average daily rate, we’re doing better. But APD takes money out of the hands of the British traveller. Those who come have to pay more to fly and spend less.”