News for the Hospitality Executive
By Robert MacLellan
May 30, 2013
This is the right time to seriously rethink the role and priorities of the most important trade association in the Caribbean - one which impacts half of all employment in the region – the Caribbean Hotel and Tourism Association.
The position of CEO of the organization has been vacant for some months, with a new appointment announcement expected shortly, and the election of a new President is due in July. The Caribbean Hotel and Tourism Investment Conference - scheduled by the CHTA for May this year - was cancelled, following less than successful events in the previous three years. All of this is taking place while much of the Caribbean’s mid market and budget hotel sector is still in a state of financial crisis, with stagnant room rates and rapidly rising costs, and when new resort projects find funding virtually impossible from banks in the region.
Let me first quote from two passages on the CHTA’s web site.
“CHTA’s Mission Statement.
Our mission is to facilitate the full potential of the Caribbean hotel and tourism industry by serving member needs and building partnerships in a sociably responsible and sustainable manner.”
CHTA first began in 1959 as a committee of the Caribbean Tourist Association – a public / private sector organization created to promote and market the region – IN RESPONSE TO A SPECIFIC HOTEL LOBBY. CHTA was very much market-focused during its genesis – airlines controlled access, wholesalers controlled traffic and payments, and hotel reps controlled communication with travel agents, while the hotels themselves WERE NOT PROTECTED. Our main concern back then was for the HOTEL SECTOR TO REGAIN SOME MEASURE OF CONTROL and address these issues as one.” (My capital letters.)
Most Caribbean hoteliers would say that little has changed in the market situation, as outlined in the previous paragraph, except that the Online Travel Agencies (Expedia, Travelocity, et al) have added to the downward pressure on room rates. Average rates for mid market and budget hotels have not yet recovered in real terms in the five years since the 2008 world financial crisis. In the meantime, hotels’ energy and food costs have increased dramatically and today’s vast fleet of cost efficient mega cruise ships represents direct competition.
Arguably, to effectively represent the hotel and resort sector under today’s Caribbean market conditions, when 63% of the world’s cruise fleet is in the region between December and March, the most important criterion to recognize is the differentiation between the “stay- over visitor” and the cruise ship passenger. The former makes the greatest contribution to the Caribbean’s tourism economy, as the stay-over visitor requires accommodation in a hotel, resort, villa, condo, vacation club, timeshare property or – in the case of marinas – a berth for the yacht. The stay-over visitor supports those businesses and investors which have made a significant long term financial commitment in a fixed asset in the Caribbean. In contrast, the cruise ship passenger travels on a ship which is generally only here for the high season, when the local hotels - hopefully - have their profitable months, and nowadays 82% of the average cruise ship passenger’s DISCRETIONARY spend is on board.
Is it really still possible for the CHTA to cope with the obvious conflicts of interest inherent in today’s Caribbean tourism market and try to represent both the HOTEL and TOURISM sector? Is the majority of CHTA membership not still hotel and resort based? What level of support does the general tourism sector give to the organization – how many members and sponsors from island tour operators, water sports companies and taxi drivers?
The major issues for Caribbean hotel and resort owners today are direct hotel taxes, inbound and intra regional air services, international and regional taxes on air travel, import duties on hotel and resort consumable supplies, energy costs and food costs. While these are the obvious priorities for lobbying on behalf of the hotel and resort sector, CHTA’s track record of successful delivery on these issues is questionable.
Is it not time to revert to the original focus of the organization – a Caribbean Hotel and Resort Association? The CHRA could better lobby governments, airlines, banks and the travel sector, representing the specific interests of those businesses which serve (and depend on) the stay-over visitor – hotels, resorts, villa and condo operators, vacation clubs, timeshare resorts and marinas.
About the Author
Robert MacLellan is the CEO of MacLellan & Associates, the leading Hospitality, Tourism & Leisure Consultancy based in the Caribbean. He has worked in the hotel industry across the Caribbean and is a regular speaker at regional hotel and tourism conferences.
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