A change in mindset is critical to getting more Barbadians investing in the local tourism sector.
This was the view shared by some of the island’s leading tourism sector officials on Wednesday as they examined the topic Increasing Local Ownership in Tourism: Is it Achievable?, during the second episode of the Barbados Hotel and Tourism Association (BHTA) webinar series.
Hotelier Renee Coppin pointed out that while most of the small hotels in Barbados were owned by locals or regional individuals, only three of the 17 BHTA member luxury properties were owned by locals.
“This leads to a phenomenon in this sector known as tourism leakage which means that tourism dollars, instead of staying in the local economy, actually benefit multinational corporations, foreign companies and countries ruining the benefit of our local economy,” said Coppin.
“The UN estimates that for every US$100 spent in the world on tourism only US$5 goes back to developing local economies. And leakage in the Caribbean according to the UN is 50 per cent. It further estimates that all-inclusive packages result in an 80 per cent leakage,” she pointed out.
“This creates a really compelling case for increasing local ownership in the sector,” she added, while highlighting that the sector directly hires over 16,000 people locally and thousands more indirectly and contributed significantly to the island’s economy.
She said an analysis of the BHTA membership showed that about 53 per cent of A-Class hotels were owned by locals along with about 75 per cent of B-class properties, which, she said, was somewhat encouraging.
Tourism consultant Josea Browne said she believed increasing local ownership in tourism was achievable, but insisted that people should see the sector as more than just accommodation, restaurant and tours.
Pointing to several areas including information technology, marketing and property management, she said in order to achieve more local investment and ownership in the sector we must first normalise speaking about tourism opportunities and possibilities in much broader terms.
“It is also about the indirect and the ancillary services and products as well as the synergies that exist across complementary industries. We are talking about agriculture, education, arts and culture, commerce, technology and innovation, health and finance,” said Browne.
She challenged business people and aspiring entrepreneurs to identify needs and niche areas and areas for enhancement and build on these.
“Once we build it for us as a people and society, then we automatically strengthen our overall tourism product and value proposition as a destination. In that scenario everybody wins,” she said.
Browne suggested that rather than looking for international investment the time had come for other models of financing to be utilized other than the traditional ones.
“The finance minds and brilliant people we have here can figure out what kind of mechanisms we need to do this thing, but we live in an era where crowd funding exists. Couldn’t we have an option to do the same so that we as individual Bajans can honestly own a piece of the rock and help everybody along the path of generational wealth and growing everything?” she said.
Browne also suggested that continued training in the areas of interest will be critical if locals were to achieve greater ownership in the sector.
Financial Consultant Rohan Cumberbatch said he believed there was need for a shift in mindset to increase local ownership in the sector.
“My estimation to increase local ownership in tourism, there must be a paradigm shift in the belief system of most of our people,” he said.
He argued that many Barbadians were encouraged not to invest but to “get an education and get a job” even though there was evidence of people globally who have made millions of dollars owning their own business even without obtaining a degree or high school diploma.
“We are afraid to risk. It is just part of our DNA,” he said.
He said another way to encourage greater investment by locals in the tourism sector was for those who are successful to share their stories.
While acknowledging that there were challenges in accessing financing in some institutions, Cumberbatch said other funding options should be considered, including crowd funding and forms of lease arrangements with absentee property owners.
“Some hotels could be persuaded to offer employees share ownership plans to help enfranchise their workers. As a means of raising capital and expanding ownership can we have hotels listed on the stock exchange?
“I agree with some industry players who insist that to encourage greater local ownership we all have to consider the following – incentives to local owners which include small property owners, improve the rates for capital investments such as solar and other green investments, [provide] better rates for property and liability insurances, provide financial assistance for staff training,” he added.
Veteran hotelier Gordon Seale said in addition to bureaucracy, high taxes and the high demands of the tourism sector were reasons he believed more locals were not investing in the sector.
He believed anyone seeking to get involved should work between two to four years to gain valuable experience and avoid some of the mistakes made by those who have gone before.