There is further evidence that the fall in the value of the British currency since the vote in June by Britons to leave the European Union, with the duty-free sector taking a direct hit.
With the majority of its clientele coming from the United Kingdom, one of the island’s leading watch and jewellery dealers, The Royal Shop, has seen the difference since the Brexit vote.
Owner and Managing Director Hiranand Thani told Barbados TODAY due to the sharp fall in the exchange rate – from BDS$3.20 before the June 23 vote to $2.48 at present – British visitors no longer spent as much as they did in the past.
Thani’s disclosure was consistent with an announcement last week by outgoing Chief Executive Officer of the Barbados Hotel & Tourism Association Sue Springer that despite a 2.2 per cent rise in stayover tourist arrivals from the United Kingdom (UK) up until the end of November, when compared to the same period last year, visitors from Barbados’ primary market were spending less here.
It was just last month, at the tourism trade show World Travel Market in London that Minister of Tourism Richard Sealy predicted that tourists from the UK would spent less when they visit here for holidays.
“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,” Sealy said at the time.
In making the announcement last week, Springer did not quantify the loss, and neither did Thani during his interview with Barbados TODAY.
However, the local businessman pointed to a troubling trend of a decline in spending by visitors from other markets, mainly the United States, which recorded an 11.5 per cent increase in visitors to Barbados up until the end of November this year, and Canada, which was flat.
The Barbados-based Caribbean Tourism Organization recently reported a 3.7 per cent drop in arrivals from Canada to the region, attributing the decline to the depreciation of the Canadian dollar with respect to the US dollar.
Thani told Barbados TODAY for the duty-free sector to truly thrive Barbados must manage all aspects of the tourism industry carefully.
At the same time, he said, with duty-free prices throughout the Caribbean approximately the same, customer service and the visitors’ overall experience in a particular destination would determine where they made duty-free purchases.
The business executive recommended another Duty-Free Shopping Day similar to the one held by some Bridgetown business in 2011, during which Barbadians would get the opportunity to buy items at duty-free prices.
“If they can work out the logistics of the foreign exchange element of it, for example allowing Barbadians to use the annual amount of foreign exchange they can travel with and paying in the foreign currency, it could be a welcome move,” he said.
Thani added that until there was a better idea of what was happening with the British and European markets, especially as the different aspects of Brexit worked themselves out in the New Year, it was hard to predict the outlook for 2017.