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Monday 16 July 2018
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Tobago loses $25M due to ferry crisis

Dianne Hadad, president of the Tobago-arm of the TT Chamber of Industry and Commerce

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. 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 inter-island ferry service at its hearing yesterday in Tobago.

Saying TT nationals make up 80 percent of the asspvciation's clientele, he 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, 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.

Hoping to hold off the banks at an upcoming meeting, James however said, “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 the $30 million State subsidy on the airbridge may well be justified in terms of the job creation that tourism brings to Tobago, plus the savings in foreign exchange by Trinidadians who may have otherwise gone abroad. “We have never assessed the domestic tourism value,” he remarked.

He lamented a dire lack of information on domestic tourism such as the alleged inability of Caribbean Airlines Limited (CAL) to say how many of its tickets sold were for same-day returns, what is the average length of a vacation stay, and where the tickets are being sold (Trinidad or Tobago.)

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 this land licence is 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.

The association’s Carol Ann Birchwood-James said the cancellation of the passenger ferry, Ocean Flower 2, had sent shockwaves through the Tobago tourism sector and had led to massive cancellations of hotel 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.” She 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 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).”

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 are not confident nor comfortable on a water-taxi crossing.

In a statement as a Cabinet member, Energy Minister Franklin Khan said a new ferry will come into service and so alleviate current woes in Tobago’s tourism sector which are just temporary.

Tobago Chamber of Commerce head Diane Hadad without calling names bemoaned some of the contributions made by politicians and public servants at this week’s JSC hearings.


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