Staff at some Tobago hotels are now working just a three-day work-week due to the island's economic crisis caused by inter-island transport woes, said Chris James of the Tobago Hotel and Tourism Association (THTA).
On top of previous woes, the sea bridge problems have now been the final straw for many hospitality operators, he told the Joint Select Committee (JSC) on the procurement and maintenance of the inter-island ferries at its hearing Wednesday at the Victor E Brice Complex in Scarborough.
Association’s Vice-President, Carol Ann Birchwood-James, told the Committee the cancellation of the passenger ferry, Ocean
Flower 2, sent shockwaves through the Tobago tourism sector and led to massive cancellations of bookings.
“The tourist season (July and August) was a total disaster, and catastrophic for the tourist industry. We can’t pay the bank, our staff and utilities,” said Birchwood-James.
And representative from the Crown Point Partnership Association, Shirley Cook, said Works Minister Rohan Sinanan may not have a proper grasp of the consequences of the ferry problems - a man-made crisis - on the Tobago business community.
James, noting that TT nationals make up 80 percent of the association's clientele, said poor inter-island transport has hit domestic tourism by Trinidadians seeking to vacation in Tobago, and led to occupancy rates in guest houses of just 20 to 22 percent. While bigger hotels have a 34 percent occupancy rate, James bemoaned that their occupancy level must reach to 52 percent just to break-even and pay costs such as staff and utility bills. He said the regional average is 68 percent, adding, “We are way down.”
Saying the Tobago hotel sector had lost $25 million over four months of the ferry crisis, James said hoteliers now will no longer allow bookings unless the intended guest can state that he has an airplane or ferry ticket, as it has been too costly to the hotels to constantly have to refund hotel rents. He could not estimate the money lost by tourism operators such as car hire companies but said overall the sister isle has lost “many millions and millions of dollars”.
James said an even greater loss than the immediate financial losses was the loss of confidence in the Tobago destination by
Trinidadians, especially the high-spenders who have gone elsewhere.
“Endless restaurants and hotels have had to close down,” he lamented.
“The problem is not now. The problem is that we didn’t earn the money in July/August. The problem is going to be next month and the month after and the month after. People have tried to keep the staff but what we have done is reduce the days. We have three-day weeks.
“What we’ve had to do with utility companies is ask for payment plans. When you don’t have the money coming in you cannot pay your taxes, your utility bills and your staff.”
James said fallout from the ferry woes had come on the heels of a cessation of foreign investment in Tobago due to a land licensing registration.
“We lost 12 large investors,” he said.
He said this land licence was supposed to take 12 days to issue but in fact on average takes one year. Trinidadians who had built villas to try to sell to foreigners, had also been hit by this land licensing. James said land licensing registration has in effect led to a 30 percent devaluation of Tobago properties whose equity value had been pledged to obtain bank loans. He said the airbridge can’t make up for the lapsed sea bridge, noting that the latter allows Trinidadian families to bring over their cars.
Birchwood-James, in noting the impact of the cancellation of the Ocean Flower 2 contract, urged the Government to pay compensation to hoteliers, put a moratorium on tourism-linked
taxes and help stave off banks from closing down tourism plants.
“We are under distress,” she said.
She said the owner of a well-known 35-room hotel had told her that he must spend $400,000 per month to run the establishment but that in July he had earned just $150,000, leaving a shortfall of $250,000.
“He had trouble paying his staff. Our hoteliers are in serious distress. We know villa owners who for three to four months haven’t got anybody (guests),” she said.
Birchwood-James was unimpressed with efforts to use water-taxis to boost the sea-bridge, saying vessels cannot take over the cars of passengers and that people were not confident nor comfortable on a water-taxi crossing.
President of the Tobago Unique Bed and Breakfast Association, Kaye Trotman said while her Association could not give an actual dollar figure for loss of income, the membership has been experiencing a decrease in their occupancy levels and a considerable increase in cancellations.
“Our small properties are ranged from five to 15 rooms and at this time our occupancy levels are below 20 percent. For a property that is five or even 15 rooms, we are talking about only having one to three rooms occupied per month.
“That is a significant blow and there is no way you can survive on that and this has nothing to do with marketing or even customer service, it has to everything to do with the fact that people just cannot get to Tobago,” she said.
Cook, in contending that Sinanan may not have a full grasp of the “economic impact that this sea bridge crisis”, pointed to the
impact on the Crown Point, Bon Accord and Canaan areas, “a place where private sector has seriously invested in Tobago as opposed to the THA carrying the brunt of the economic driver here in Tobago.”
“If you look at that area with the level of investment and the loss that we have incurred in the last four months with the loss of the Galicia, we are looking at a minimum of $20 million and that is to be conservative.
“Because this service has not been recognixed as an essential service, I believe that this is the reason why we have being led to this position,” she said.
In summing up, Committee member Franklin Khan said the Tobago economy was dangerously placed.
“I feel the pain of the Tobago society on this matter, I generally do, trust me. What this ferry fiasco or this ferry issue has demonstrated in my view, is how precariously positioned the Tobago economy is.
“You are not on solid ground, whether it is in agriculture, whether it is in tourism, whether it is in commerce, whether it is in industry, whatever… the Tobago economy is precariously placed.
“This is an opportunity where we can take a bad and turn it into a good so you can now analyse with a greater level of clarity what your challenges are,” he advised.