Letter: St Vincent Island doesn't need any more hotel rooms

Letter: St Vincent Island doesn't need any more hotel rooms

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Buccament Bay Resort, shuttered in December 2016, may never re-open given its huge debts and multiplicity of overlapping creditors

Dear Sir:

In a press conference on February 20, 2017, the prime minister of St Vincent and the Grenadines (SVG), the Honourable Dr. Ralph E. Gonsalves, again urged the private sector to invest in building more hotel capacity on the mainland (“I want to say to the hotels, please, get up and be activist”) now that Argyle International Airport (AIA) is finally operational, a plea other government officials have repeatedly made in the past.

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Once again, this entreaty is bound to fall on deaf ears. This may be why the prime minister announced in his 2017 budget address that he had secured Cabinet approval on January 18, “… to build a 250-room hotel in St Vincent, through the instrumentality of at least two state agencies, and to engage a company with a global brand to market and manage it,” a desperate grasp at the ruinous socialist straws that even Cuba is tentatively beginning to release and which devastated the Jamaican tourist industry when the nationalization of foreign hotels and other entities beguiled Michael Manley during the 1970s.

In previous essays (see numbers 33 and 36 below), I estimated that roughly 20,000 tourist and other visitors from around the world annually stay in various commercial establishments – resorts, hotels, apartments, guesthouses, and private homes — on SVI. Given that our Tourism Authority does not publish a comprehensive breakdown of these figures, I was forced to extrapolate that about 6,500 of these visitors arrive here from distant locales outside the Caribbean. These are exactly the type of tourists AIA was built to attract.

Even if I inadvertently low-balled the 6,500 overseas tourist arrival figure, and the actual number is 50 percent higher at 10,000, these visitors could be accommodated easily by our existing mainland hotel stock of 750 rooms (which includes the shuttered Buccament Bay Resort listed on its Internet site as “temporarily closed and plan[ning] to re-open in spring 2017 after refurbishment”), most of them either closed or with few North American and European guests five months of the year.

At the same press conference, the prime minister said that the entire nation of SVG (i.e., SVI plus the Grenadines) has 2,200 hotel rooms and that these have an annual occupancy rate of 40-50 percent, a figure well below the 60-67 percent Caribbean average. Whatever the separate mainland rate, it is surely much lower than in the much more popular Grenadines. My best guess, partly grounded on personal observation and party on the large number of mainland hotels that have closed, are for sale, or have repeatedly changed hands over the years, is that SVI has an annual hotel room occupancy rate of around 30 percent.

Clearly, our veteran small hotel owners realize that only more tourists can stimulate more rooms, not the other way around. Rather than being “risk adverse,” as the prime minister called them at the same press conference, or “traditionally … very cautious,” as ill-informed accountant Brian Glasgow opined two years ago, our business class, including our hoteliers, are hard-nosed entrepreneurs who know how quickly our tiny, cash strapped, small growth, and limited opportunity economy can wipe out reckless expansion, as Dr Gonsalves’ cousin, Ken Boyea, recently learned (see essay number 8 below), and as legions of other bankrupted businessmen, including owners of failed guesthouse and small hotels, have learned for years.

Our hospitality room numbers support these assertions. Based on an average two-week holiday stay by two guests in the same room, a 30 percent occupancy rate would translate into 11,700 guests using the following formula: 750 rooms x 2 guests per room x 26 two-week period x 0.3 occupancy rate). Even if all existing rooms were continuously occupied by two people staying for two weeks, this would require 39,000 guests (750 rooms x 2 people x 26 two-week blocks), or double the present number.

What this means is that even if the 10,000 number of extra-Caribbean holiday visitors explodes to 30,000 over the next few years because of AIA – a “veritable miracle” even beyond the alleged supernatural powers of this prime minister – and assuming the same figure for hotel visitors from other Caribbean countries (because they would continue to arrive on the mainland by regional aircraft or boat), our existing room stock could house them at any reasonable occupancy rate.

What is missing from these projections of increased holiday visitors is the motivation for their visit to our tourism-challenged mainland, namely, the appealing features that would draw them to SVI rather than to other places like, say, miniscule but luxurious and captivating Anguilla (35 square miles, or 90 sq km, and a population of only 15,000 people), a formerly dirt-poor island with scant traditional resources that now attracts over three times more overnight tourists than we do (not to mention thousands more cruise ship passengers and yachters) without an international airport.

The not-so-secret tropical holiday fact is that Anguilla more than compensates for the so-called “travel inconvenience” of no international airport — the bogus justification for the building of stillborn AIA — with its 33 pristine white sand beaches.

More problematic for our long-term development is that magically tripling our new visitors to 30,000 a year — the original 2013 prediction of tourism minister, Cecil McKie – even without the suitable attractions, would still not make AIA a value-added national project, given the looming interest payments on its EC$400 million debt and EC$20 million annual operating cost.

More disconcerting still is Minister McKie’s bare-faced denial of his three-fold increase in holiday arrivals claim and replacement of this figure by a World Bank estimate that AIA would see visitor arrivals increase by a mere ten percent within the first three years of its operation.

If this World Bank estimate is accurate (I have been unable to determine its primary source), this would be further proof that building AIA was a huge waste of money we had to borrow, but could never repay, exacerbated by years of lost opportunities for more fruitful development we could never reclaim.

***

This is the 52nd in a series of essays on the AIA folly. My other AIA essays are listed below:

1. Get ready for a November election in St Vincent and the Grenadines! But which November?
2. Lessons for Argyle International Airport from Canada’s Montreal-Mirabel International Airport
3. Lessons for Argyle International Airport from the cruise ship industry
4. Lessons from Target Canada for Argyle International Airport in St Vincent
5. Lessons from Trinidad and Tobago for Argyle International Airport
6. The dark side of tourism: Lessons for Argyle Airport
7. Why Argyle won’t fly: Lessons from Dominica
8. Ken Boyea and the Phantom City at Arnos Vale
9. Airport envy Vincie-style
10. Fully realising our country’s tourism potential
11. Airport without a cause
12. The unnatural place for an international airport
13. The Potemkin Folly at Argyle
14. False patriotism and deceitful promises at Argyle
15. Airport politics and betrayal Vincie-style
16. Phony airport completion election promises, Vincie-style
17. Is Argyle International Airport really a ‘huge game-changer for us’?
18. Has the cat got your tongue, prime minister?
19. More proof that Argyle won’t fly
20. Our very own Vincentian cargo cult at Argyle
21. The missing Argyle Airport feasibility studies
22. The world’s four most amazing abandoned airports
23. Farming, fishing, and foolish talk about Argyle International Airport
24. Argyle Airport amateur hour
25. St Vincent’s place in the world of travel
26. Investing in St Vincent’s tourism industry
27. The Argyle Airport Prophecy: What the numbers say
28. Did the IMF drink the Comrade’s Kool-Aid?
29. Why Qatar? Why St Vincent and the Grenadines?
30. Foolish words about Argyle International Airport
31. ‘If I come, you will build it’: Lessons from the Maldives for Argyle International Airport
32. City lessons for Argyle International Airport
33. Who really lands at Arnos Vale?
34. No ticky, no washy – Argyle-style
35. We have met the Vincentian tourism enemy and he is us
36. Hotel St Vincent 
37. Why St Vincent Island has so few tourists
38. Why Bequia is a gem of the Antilles
39. Why seeing is believing in the Caribbean tourism industry
40. St Vincent’s cruise ship numbers are much lower than we think
41. Lessons from Barbados for Argyle Airport
42. Cuba’s tourism rollercoaster: Lessons for Argyle Airport
43. What the world teaches Black Sands Resort and Villas
44. Not all Argyle airport critics are ‘internet crazies’
45. Why Roraima Airways? Lessons for Argyle airport
46. The print media’s take on the opening of Argyle International Airport
47. Our Argyle International Airport ‘veritable miracle’
48. The Argyle airport ‘poppy show’ opening
49. St Vincent’s 2016 tourism numbers are nothing to brag about
50. Going forward or moonwalking? Lessons for Argyle International Airport
51. The visible hand of Adam Smith at Argyle International Airport
 
C. ben-David

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