August 27, 2019, 9:43 pm, Tropical Storm Dorian is passing just 30 miles to the south of Barbados. It will be a long night but the country has taken heed to words of the Honourable Prime Minister, Mia Amor Mottley, and precautions have been taken to ensure safety to life and property. Over the past 18 months we have endured a different kind of storm, an economic storm greater than a Category 5 Hurricane. Barbados is still in the process of emerging from this storm, but is taking significant steps to get the pillars of the economy functioning again.
One of these pillars is tourism - the engine of our economy. New investment in tourism is a must and planned investments in The Hyatt Centric, Blue Horizon, Sam Lords Castle, Sandals Beaches, The Sands and the recently opened Azura, clearly demonstrate the great attraction this pillar holds for major investors.
Further demonstrating this appetite for investing in Barbados is the US company, Hilton Grand Vacations Inc, making its first investment in the Caribbean by acquiring a US$45m interest in The Crane Resort, with plans for further investments. Plus 116 / businessbarbados.com Canadian investor, Glenn Chamandy, who already holds successful operations in Barbados through Gildan Activewear, recently acquiring Apes Hill Club Golf and Residential Community, with plans for significant further development.
You may ask why invest in Barbados when less than 18 months ago we entered into an IMF programme. This answer is simple: Confidence. Thanks to the successful recovery measures undertaken so far by the current Government, there has been a flood of confidence returning to Barbados’ economy. And while there is still a significant amount of work that needs to be done to ensure that the economy remains on a sustainable path, we have witnessed real evidence of light shining through the dark economic clouds.
With Barbados continuing to enjoy a strong reputation for a tourism product that offers visitors a safe and experiential vacation, we can assume that this renewed confidence will lead to profitable growth and economic prosperity for all, as Barbados progresses along the continuum of the IMF programme.
As a mature destination, Barbados has to continuously add new guest experiences to our tourism product, and recent investments indicate that eco and agri-tourism are becoming increasingly
popular. PEG Farms in the heart of parish of St. Joseph and Coco Hill in the parish of St Andrew, both provide new product offerings, including educational tours and farm-to-table dining experiences. These innovative projects, which were initiated during the challenging economic period of the last 10 years, are now well-positioned to reap a good return on their investment, as they add a popular new dimension to our tourism package. In the business of providing destination experiences, guests in all segments of the market are looking for new and distinctive experiences that form a datapoint in how they value their vacation. This also provides new opportunities for investment in this sector.
The reason why tourism is considered the engine of the economy is that it drives all other major sectors of the economy. I have borrowed this line of thinking where we even see tourism as a key driver behind the International Business Sector. Most international business companies want a country with reliable infrastructure, highly skilled human capital and support services, and tourism has helped to drive each of these. As a result, many expats have been able to thrive and seamlessly integrate on arrival to this beautiful island.
To encourage investment in the sector, the Government of Barbados offers incentives through the Tourism Development (Amendment) Act Cap. 341, which provides specific benefits to Approved Tourism Projects and Approved Tourism Products. In addition, the Government, via the Barbados Tourism Marketing Inc., supports the tourism industry through a marketing programme that aims to continuously drive growth in the sector.
There are numerous opportunities for investment in both room stock and services, with prime real estate currently available on the south and west coasts, in what is still considered a buyers’ market.
With Government’s continued push to increase both cruise and land tourism over the medium to long term, there is a need to increase room stock to cater for each segment of the tourism market. In conjunction with recent changes to our corporate tax structure, this creates exponential investment opportunities.
Over the past 5 years there have been 6.1 million long stay and cruise visitors providing a steady stream of customers for the services side of the industry. I’ve had the chance to hike through some beautiful areas of Barbados, which provide magnificent views and a good work out.
Adventure tourism meets the needs of our ever-changing visitor demographics. Activities such as hiking and biking through the Chalky Mount and Naniki trail or kayaking and surfing on the East Coast bring the thrills adventure seekers desire. With capital injection and local expertise, these products can be significantly expanded to meet the continuously expanding needs of our guests.
I see good potential for new investments based on flexible business models, where human capital can crosstrain in multiple services, allowing businesses to operate on an annual schedule, as opposed to seasonal tourism operations. This year-round model is already well supported by a full calendar of activities, including cricket, motorsports, golf tournaments, athletics, polo and horseracing to name just a few. In a similar vein, there appears to be several opportunities to fill obvious gaps in the market, such as entertainment centres, water parks and conference facilities.
Barbados is open and ready for business, and the time for investing is now!