Apr 2017 Financial News

Hotel occupancies drop during first quarter (Barbados)

Apr 26, 2017

A chilling warning has been issued to tourism practitioners here that they cannot assume that the traditional winter tourists will continue to visit Barbados.

Against the backdrop of a fall in hotel occupancies and weak returns on hotel room rates during the first quarter of this year, Chairman of the Barbados Hotel and Tourism Association (BHTA) Roseanne Myers Wednesday disclosed that travel agents from source markets were reporting that some repeat visitors were opting not to travel in winter because they were waiting for “when the rates are a little better”.

It is a troubling sign for the island’s bread and butter industry, on which Government is counting to play a key role in dragging the country from the economic brink.

Myers said it was too early to determine if this were a trend, but she advised the authorities to keep an eye on the development, particularly since luxury properties – traditionally the ones least affected by economic considerations – had reported a drop in January.

“Those properties are now suggesting that their May [bookings] is a little stronger than it has been in the past. So that is something that we absolutely will have to watch,” Myers said at a BHTA news conference Wednesday at the Bayfield House Hotel in Mullins, St Peter.

“And right now if you look at pre-bookings for 2018 it means that people may have to adjust those rates and not assume that the winter guests that always come will always continue to come. And maybe we need to be a little bit more nimble in the way we market to those people to ensure that we capture them, whether in January or in May or June. That is something we are going to have to manage and monitor,” she added.

Hotels recorded a decline in occupancy levels of between two and five per cent for the first quarter of this year, a performance attributed mainly to a number of world events, including Brexit, the fall in the value of the sterling, a change in travel habits, and the global economic climate. The average daily rates (ADR) also fell, but by a smaller margin of less than one per cent.

The performance of the accommodation and hotel sector is determined mainly by internal surveys of BHTA member properties, as well as information from the STR report, the American company that tracks supply and demand data for multiple market sectors, including the global hotel industry.

“For the period January to March the occupancy as reflected in the STR report [was] down by five per cent while the ADR is down by 0.8 per cent, which is relatively flat,” BHTA Chief Executive Officer Rudy Grant said, adding that the association’s survey of its members for the period had revealed a two per cent drop in their occupancy rates.

With tourist arrival numbers for the first quarter yet to be released by the Barbados Tourism Marketing Inc, it was not immediately clear whether the fall in occupancy levels was a direct result of a slide in arrivals, or whether an increasing number of visitors were abandoning hotels and formal accommodation for home share programmes such as Airbnb.

While there was no direct reference to the sharing economy in this context, Myers hinted at it by stating that the association was monitoring “the trend that says more and more people are staying in properties that are not necessarily the traditional”.

Just over half of visitors to the island (52.8 per cent) stayed in the approximately 80 BHTA-registered hotels in January and February this year, according to the senior tourism executive, who explained that it was difficult to say how many stayed at BHTA-registered villas.

Meanwhile, bookings for May 2017 are trending ahead of the same month last year, while reservations for June this year are down, Grant said, adding that he was hoping that industry operators would offer a range of discounts and undertake promotions as suggested by the BHTA.

“One of the things we have to be focusing on relates to ensuring that we give value for money, and we have been collaborating with our members and speaking about that with our partners as well to ensure that we are able to position our properties to be competitive globally and to also be offering good value for money,” he said.

Source:
Marlon Madden
Barbados Today
Wednesday April 26, 2017.

https://www.barbadostoday.bb/2017/04/26/hotel-occupancies-drop-during-first-quarter/