Disclaimer: The views and opinions expressed by this author are their own and do not represent the official position of the Barbados Today.
by Chelcee Brathwaite
Barbados’ tropical temperatures, year-round sunshine and award-winning beaches undeniably create a natural comparative advantage luring millions of tourists. Recording its third consecutive year of growth in stayover arrivals, Barbados welcomed 680,269 stayover visitors and 614,933 cruise passengers in 2018, according to the BTMI’s latest annual report.
Tourism, Barbados’ biggest foreign exchange earner, on average accounted for 39 per cent of total GDP, 38.9 per cent of total employment and 40.5 per cent of total exports, between 2014-2018, according to an IDB report.
Classed among the most tourism-dependent nations of the world (ranking 14th/166 countries in the IDB’s tourism dependency index), Barbados is reeling from the blow dealt to tourism by COVID-19, which virtually halted the industry in 2020, with arrivals not yet normalising. A snapshot of the initial impact according to Minister [Marsha] Caddle stated that, “By early March 2020, revenues in the sector fell to zero […] Between March 23rd and April 23rd, unemployment claims rose by about 24,500.” The full impact remains unknown, but certainly, the consequences are far-reaching.
The silver lining, however, is the opportunity presented for tourism to reinvent itself as more inclusive, sustainable, and resilient. Building upon measures by the Barbados Government, this SRC Trading Thoughts proposes recommendations for transforming the tourism sector, responding to Minister [Lisa] Cummins’
call for a new “inclusive and sustainable” tourism product for Barbados.
1. PLUG LEAKS BY CREATING LINKAGES
When assessing tourism as a local development option, economists warn of the high associated economic leakage.
Economic leakage occurs when money leaves an economy, representing revenue lost. To conceptualize this phenomenon, consider the cross-cutting activities involved in delivering a tourism product (transportation, accommodation, entertainment, food, etc.), and the extent to which these goods and services are provided through domestic suppliers. Polly Pattullo, author of Last Resorts: The Cost of Caribbean Tourism, found that for every dollar earned from tourists, 70 cents is lost importing goods and services. Certainly, some leakage is unavoidable due to domestic resource constraints, but where possible, strong domestic linkages must be forged to counteract any avoidable leakage. This requires greater integration of local goods and services within the tourism value chain, as envisioned within the Barbados Tourism Master Plan 2014-2023.
The tourism-agriculture nexus is the ‘poster child’ for inter-sectoral linkages. Agriculture provides the tourism industry with resources for food consumption, and a background for attractions (agrotourism). Strengthening this type of inter-sectoral linkage, can stimulate local production, retain greater tourism earnings locally, and improve wealth distribution, especially if those in rural communities are able to participate.
The Coco Hill and Ocean Spray Agro-forest Project developed in Barbados by Mahmood Patel is a tangible example of the tourism-agriculture nexus. This project, comprising a 53-acre agrotourism rainforest, offers guided tours and supplies food to the resort.
To develop such linkages on a wider scale, several underlying challenges need to be addressed, including “low productivity and information asymmetry regarding the food standards required by hotel and restaurant chains, cruise ships and the yachting sector”, as the FAO highlighted in its report.
Other inter-sectoral linkages should also be pursued. Consider strengthening relationships between the manufacturing and tourism sectors, where locally manufactured goods are used to furnish hotels. Consider improving links between artists and tourism markets, allowing local artistic content to be naturally embedded into the tourism product. Consider bringing local (tech) entrepreneurs on board to modernize the sector.
Moving forward, first concretely identify the sources of leakage in Barbados’ tourism sector, and then, where possible develop the local capacity to plug these leaks. Leveraging the research capacity of The UWI, and stimulating entrepreneurship, through innovative finance mechanisms and supporting regulatory frameworks, can greatly assist here.
2. ALIGN TOURISM WITH THE SDGs
Although included as targets in the United Nations’ (UN’s) Sustainable Development Goals (SDGs), specifically under Goals 8 (Decent Work and Economic Growth), 12 (Responsible Consumption and Production) and 14 (Life Below Water), research suggests that tourism can potentially contribute to all 17 of the SDGs. However, the sector has not been positioned to contribute to sustainable development.
Economic wise, the WTTC noted that, “despite the impressive growth statistics, tourism in the Caribbean is not doing as much as it could to relieve existing problems of unemployment, poverty and social dislocation.” The diversity of players involved in the tourism value chain, and the fact that the consumer comes to the producer, creates several opportunities for local entrepreneurs and SMEs to participate in this global market. Encouraging foreign-owned hotels, airlines, and tour companies to make use of local resources and talent and avoiding supply-side incentives that create a race-to-the bottom, will be beneficial here. Such opportunities can contribute to SDGs 1, 4, 8, 10, etc. Streamlining the participation of economically disadvantaged groups into the tourism sector will require greater collaboration and organization, innovative financing mechanisms, skills training workshops, quality assurance and compliance certifications, and other supporting frameworks.
From an environmental perspective, tourism is often criticized for its negative contributions (large carbon footprint, habitat degradation, pollution, excessive energy and water usage, etc.). However, if developed correctly, tourism can contribute to SDGs 6, 7, 9, 11, 12, 13, 14, 15, etc. For example, initiatives like the UNESCO World Heritage Sites exist to preserve historic attractions (Historic Bridgetown and its Garrison).
The Barbados Tourism Development Act, encourages sustainable tourism investment by offering incentives to projects which conserve natural resources and use environmentally friendly products. The Barbados Employment and Sustainable Transformation Plan (BEST) is set to transform the sector by “committing to greening through water conservation and water harvesting measures, and the installation of renewable energy capacity” as outlined in Prime Minister [Mia] Mottley’s recent throne speech.
Going forward, joining the WTO’s negotiations on the Environmental Goods Agreement (EGA), which eliminates tariffs on environment-related products, can encourage eco-friendly imports. Increasing the visibility of incentives under the Barbados Tourism Development Act and the BEST programme, while expanding their scope to target the entire tourism ecosystem, can holistically promote sustainable tourism.
Developing eco-friendly tourism products like agrotourism and coral-reef restoration tours can attract the growing segment of highly ‘sustainable intelligent’ tourists. Applying Ellen McArthur Foundation’s three principles of the circular economy (designing out waste and pollution, keeping products and materials in use, and regenerating natural systems) can help balance the sector’s economic development with environmental and resource protection.
3. INCORPORATE DIGITAL TECHNOLOGIES INTO THE TOURISM PRODUCT
The WEF predicts that by 2025, digital transformation of the tourism sector will create an additional US$ 305 billion in profit, shifting US$ 100 billion from traditional players to new competitors with innovative business models. Indeed, greater incorporation of digital technologies in the tourism sector can yield several benefits – for travellers: price reductions, customised products, and enhanced visitor experiences; for SMEs: reduced transaction costs, real-time engagement and product innovation; for destinations: increased international exposure and greater competitiveness. These are just some of the many cited benefits across literature.
COVID-19 is forcing the industry to embrace an even greater digital transformation. Market intelligence technologies remain instrumental in discerning new travel trends – already, Barbados has capitalized on one such trend through its Welcome Stamp Visa.
Touchless technology has been identified as a key pillar in the UNWTO’s Global Guidelines to Restart Tourism, with airports moving towards contactless boarding (biometric scans, contactless elevators, etc.) and hotels offering contactless stays (digital check-in/out, smartphone powered control of hotel appliances, etc.). Virtual and augmented reality technologies are bringing attractions right to your doorstep, creating the possibility of tourism without travel.
Imagine reaching previously underserved markets like the older population segment who can no longer travel, or patients coping with life-limiting and terminal illnesses, through a tourism product packaged within a virtual reality programme. Leveraging digital technologies not only creates new opportunities but can also build resilience by future-proofing the tourism sector.
However, successfully integrating these technologies requires underlying challenges (lack of access to technical and financial resources, inadequate supporting policy and regulatory frameworks, limited uptake
ºof technologies, etc.) to be addressed.
Useful steps forward include accelerating Barbados’ digital transformation, which CrimsonLogic (the Singapore-based consulting firm that has partnered with several governments to implement digital transformation projects) noted should be accompanied by a master plan, during a recent webinar session.
Partnering with expert firms such as CrimsonLogic, leveraging The UWI’s research capacity, and accessing finance and technical assistance available under existing trade agreements and from financial institutions (e.g. the European Development Fund, IDB, World Bank), can help materialize Barbados’ digital transformation.
Concluding Thoughts
To reinvent Barbados’ tourism industry, we should start plugging the leaks by creating strong linkages, positioning the sector to meet the SDGs, and incorporating digital technologies. Although this SRC Trading Thoughts proposes a three-point roadmap for transforming the tourism sector, the recommendations in this piece should not be considered exhaustive.
However, it is hoped that policymakers will take advantage of the pause afforded by COVID-19 and include institutions like The UWI in its national consultations focused on reinventing Barbados’
tourism product.
Chelcee Brathwaite is a trade researcher with the Shridath Ramphal Centre for International Trade Law, Policy & Services of The University of the West Indies, Cave Hill. Learn more about the SRC at www.shridathramphalcentre.com.