Despite increased arrival numbers from its premier tourist market, the decline of the British currency since the Brexit vote in June is threatening to hit the Barbados economy where it hurts.
Minister of Tourism Richard Sealy told Barbados TODAY from World Travel Market in London yesterday, the slide in the value of the pound sterling meant tourists from the United Kingdom (UK) would spent less when they visit here for holidays.
Since the Brexit vote, the pound has fallen from an exchange rate of BDS$3.20 to $2.48.
“Our numbers are actually up in terms of actual visitors. We have been trending up and the forecast [is] that will continue,” Sealy said in reference to tourist arrivals from Britain.
He revealed that the two major British carriers, British Airways and Virgin Atlantic had committed additional flights to Barbados going into next year, reflecting the growth in the traditionally strong market.
However, Sealy made it clear tourism authorities here could not afford to be complacent because the country would have a fight on its hands to counteract the fall in spend by Brits.
“The one obvious impact of Brexit so far has been the currency, as the pound has plummeted. Now, while visitor spend in Barbados is certainly up [overall], we still have to keep an eagle eye on that situation. If the exchange rate is not favourable, visitors may still come but they may adjust their spend to suit, and clearly that is something that we have to monitor. This is why we have to continue to work so hard in this market. It is our main source market and it would continue to be our main source market in the foreseeable future,” he stressed.
It is for this reason that the minister said tourism officials would have to do things differently to combat the “unusual situation”.
However, he insisted Barbados would not simply throw money at the problem and expect it to go away.
“We are hearing from the Bank of England that they are predicting inflation and a decrease in spending power for Brits going forward. We also are hearing that even the whole Brexit thing as a result of rulings in the law court, has question marks all over it. So there are elements of political and economic uncertainty in the United Kingdom. We can’t get away from that and it means we have to work that much harder and stay that much closer to our partners. It also means that some of the approaches that we need to take, naturally, have to change . . . . It’s not that we are going to throw money at every problem, but we have to creative. Unusual situations may call for unusual responses,” the minister suggested.
It was less than three months ago that the outgoing Chief Executive Officer of the Barbados Hotel and Tourism Association (BHTA) Sue Springer had revealed that the weaker pound was beginning to bite.
During her address at the BHTA’s quarterly general meeting at the Hilton Barbados Resort, Springer had said that while arrivals from the UK had not declined, there was evidence of a reduction in spend, especially at some of the island’s major attractions.
“The rate of exchange for the pound sterling is beginning to have its effects, especially on some of our attractions. The UK visitors seem to be cutting back even though they are still coming . . . but they are cutting back on what they are doing. I have always said that I have seen people [tourists] at the bus stops but I have been seeing even more people over the last few months,” Springer said then.