FROM a purely economic-marketing-branding perspective, Sandals ticked all those boxes to help raise the tourism profile of Tobago, Louis Lewis, CEO of the Tobago Tourism Agency Ltd said recently.
“We are small size. You cannot compete on volume, it has to be on quality and Sandals brings that to you. I’m not an advocate for Sandals but just looking at it from a technical side. (Sandals is) a high volume generator, well-recognised, and (provides) higher yields,” Lewis told the audience at a panel discussion at the UWI St Augustine on Wednesday night to look at the economic implications of the termination of the Sandals Tobago project.
Sandals would have provided the level of high quality rooms that would have made the island more attractive and helped bump up tourist volume to the island, he suggested.
“People keep talking about chicken and egg. But you have to get the egg first. To get that bank of rooms that can make it efficient before you can even start to make it competitive,” he said.
Among Tobago’s challenges was generating volumes to make flights to the island attractive to airlines, because there’s not enough rooms on the island to make it worthwhile.
Right now, Lewis said, Tobago shares all its flights – there are no point-to-point (direct) flights to Tobago from its major markets – and competitiveness in the industry requires direct flights.
“I’ll tell you how bad it is. Tobago has shared its flights from all of its major markets. In not one of those cases can we fill more than half of the plane. The competitive option is a daily flight (when most flights to Tobago are weekly). If you aren’t filling half a plane once a week and you want to get to a daily service – seven times – you have to raise your capacity 700 per cent to get to that level of efficiency,” he said.
The second challenge is price. Rooms in Tobago average US$150/night and are competing against places with room prices that average US$1000. The yield then, for airlines and tour operators who promote destinations, is therefore less with Tobago. Another challenge with airlift, Lewis said is if Tobago can’t fill half a plane, and the other destination fills up with more passengers, the low volume coming to Tobago makes it uneconomical for airlines to go, because they would have to pay two sets of fees and taxes versus one, meaning Tobago would be cut off.
“These are the arguments that speak to the necessity of volume,” he said.
It doesn’t matter if it’s Sandals or anyone else, he said, Tobago needs those rooms to create momentum. “Somebody has to develop a very aggressive foreign direct investment to get some of those people who tick all of those boxes – world-recognised, great volume generator, to cause you to get a higher yield to get tourism in Tobago for all the reasons we’ve heard from the beginning,” Lewis said.