Beyond the Beach – The Business of Tourism

Tourism is the lifeblood of the Barbadian economy. With over 537,640 thousand long stay visitors and 517,436 cruise visitors at the end of 2012, the industry directly employs almost 13% of the island workforce and makes a direct contribution of 12% to GDP. Barbados is the premier destination in the Southern Caribbean for visitors from […]

By Patricia Affonso-Dass

February 27, 2014

Tourism is the lifeblood of the Barbadian economy. With over 537,640 thousand long stay visitors and 517,436 cruise visitors at the end of 2012, the industry directly employs almost 13% of the island workforce and makes a direct contribution of 12% to GDP. Barbados is the premier destination in the Southern Caribbean for visitors from the UK, North America and Europe and while the island has lost some ground and has seen declines in arrivals over the past two years, Barbados remains an aspirational destination known for its friendly people, excellent air and sea access from key source markets, sound infrastructure, stable government and ability to deliver on its’ key brand elements – Friendliness, Safety and Cleanliness.

The hospitality industry in Barbados dates back some 200 years and in the 17th and 18th centuries Barbados was “one of the most metropolitan and commercially important colonies of the British Empire.” Large-scale tourism development in Barbados however, dates back to the late 50s and early 60s and from then to now investment in tourism has transformed both the landscape and the economy of the island literally and figuratively; changing it from one based on sugar, to a tourism based economy.

The tourism product in Barbados is diverse and includes a range of all types of accommodation including – hotel rooms, villas and guest houses and a wide variety of restaurants, attractions – air, land and sea based – natural sites, parks, festivals, golf courses and polo fields and a range of other community based activities all of which blend together to create a destination that can be custom tailored to suit the needs of the most discerning visitor requiring the ultimate in luxury and privacy, or the independent traveler wanting to immerse themselves in the local life and culture.

From an investment perspective, Barbados provides a highly attractive environment and there is opportunity for development in a range of areas. The island offers an excellent network of roads making all parts of the island accessible, effective telecommunications and IT connectivity island wide from a range of providers, good public and private health care, renowned primary, secondary and tertiary education, a solid banking system, naturally clean potable drinking water and access to a range of highly competent local skills from line level to management in most disciplines. Barbados is rated in the top tier of the UNHR development index and in 2011 Historic Bridgetown and its Garrison was recognised by UNESCO as a World Heritage Property for its historic importance and its preservation of architecture and unique heritage, opening up a range of possibilities for investment in Heritage Tourism Projects.

The primary pieces of legislation that provide benefits and incentives to investment in the tourism and hospitality sector in Barbados are the Tourism Development Act and the Special Development Areas Act. Incentives are offered under these two pieces of legislation for investment in the accommodation sector, restaurants, recreational facilities and services, development of attractions which emphasize the island’s natural, historic and cultural heritage and for the construction of properties in non-coastal areas. Provision is made in the Act for investors in tourism projects to benefit from write off of capital expenditure and 150% of interest; there is also exemption from import duty, value added tax and environmental levy on a wide range of items including furniture, fixtures and equipment as well as building materials, supplies and equity financing. The Tourism Development Act is currently under review with the aim of making the facilities within it more easily available and the act itself more robust and a number of additional items have recently been added to the list of items exempt of duty and other taxes.

In recent years Barbados has seen the addition of International Hotel Brands with Radisson, Courtyard by Marriott and Couples Resorts from Jamaica joining the existing Hilton Hotel and Fairmont brands and there has been a real diversification in the accommodation sector with significant growth in the villa and condominium sector. There is still room for additional international brands and a real need for the upgrade of much of the existing accommodation product as well as for new and innovative projects that offer fresh concepts that are highly differentiated with striking architecture and interiors, exciting F&B offerings, high quality spa operations, innovative sports activities and unique cultural experiences, combined with world class standards of service. It is important that any development provide value for money to the end hotel or real estate consumer if the Barbadian resorts are to compete successfully in the competitive global market.

In a tourism environment where global competition is fiercer than ever, where the consumer is demanding new experiences, higher levels of service and more dramatic and realistic experiences and where social media allows the immediate transfer of experiences, images and opinions Barbados is at a cross roads. Its success will be dependent on how well it trades on the excellent reputation that it has created over the years, reinvents its existing products and adds new and exciting ones, improves its levels of service and facilities and on ensuring the most facilitative environment for tourism development in order to attract the right mix of new projects.

“Barbados continues to be a location chosen by discerning investors that are looking for a sophisticated and authentic Caribbean island that provides an enabling business environment and one that offers a range of tax and financial concessions.”*

* Final paragraph quote from BTII website.

N.B: This article was first published in the Business Barbados 2014 publication.

Patricia Affonso-Dass

Patricia Affonso-Dass is the President of the Barbados Hotel & Tourism Association.