Consider decentralization, hoteliers told

Owners of small hotels are being told that if they decentralize their operations it will improve their business and empower their employees.

The advice has come from economist Dr Justin Ram, who believes the Intimate Hotels of Barbados (IHB) should consider making the move.

Delivering the feature address at the IHB’s Annual General Meeting at Infinity on the Beach this morning, Dr Ram said: “I think it is a powerful concept that you need to consider…because the concept of decentralization is here to stay and you need to be aware of that.

“We are seeing this transformation with respect to finance; decentralized finance is now the way to go. As a percentage of global finance it is still small but every year I see a change and a growth in it. This concept is going to actually be what drives the world economy I think over the next ten years,” Dr Ram, the former Director of Economics at the Caribbean Development Bank (CDB) explained.

“As you think about your transformation you have to think about going down the route of decentralization.”

The economic consultant maintained that such a move would help to not only empower Barbadians but also provide equity.

“Decentralization actually means that it empowers individuals, it empowers organisations and it also means that it brings equity.

“When you think about decentralization think about it with respect to your own organisation. If you are going to decentralize your decision-making in your own organisation, you immediately start to empower your own employees. You immediately say to them that you are giving them an equity stake in the business. That transforms the mindset and the incentives structure completely…It gives people a stake in where they are working and I think it is an idea whose time has come,” Dr Ram noted.

In fully supporting the suggestion of the IHB’s chairman Mahmood Patel that the body should look towards starting a solar farm, Dr Ram said it was the perfect initiative for a decentralized financing mechanism.

He said in an environment where banks were not providing good interest rates, the project could be used to provide savers with an alternative investment.

“That means simply that you perhaps as the IHB, could raise a renewable energy bond, fractionalize that bond into fractions that are small enough so that the ordinary person can buy that…

“Could we now provide savers with an opportunity to earn even if it is a smaller increase on that interest rate by investing in your project? I think it is a powerful idea to do a solar farm but it can be even more powerful because you can now buy in and provide an equity stake to persons in your communities and give them a chance to earn a higher rate of return. Immediately it changes the whole incentive structure,” Dr Ram reiterated.

“I think we need to find a way that even our employees can have a stake so that they can also navigate the high cost of living in Barbados and be encouraged to invest.