– time not right for new hotels, official says

With occupancy rates possibly the lowest they have been in a decade and other negative impacts pointing to a slump in the tourism industry, a leading industry official believes that this would not be a good time to build new hotels.

Occupancy rates at hotels have been consistently low and there is no national marketing strategy geared to tourism. In addition, airlift in and out of the country is inadequate and travel costs high; poor infrastructure already impacts negatively on the local tourism sector and urgent action needs to be taken to deal with the constraints affecting the industry, the official said.

Plans are currently in train for the construction of at least three new international hotels in the George-town area. Meanwhile, three hotels (Le Meridien Pegasus, Hotel Tower and Zoom Inn) are reportedly looking for buyers. Zoom Inn was opened for Cricket World Cup (CWC) last year. One resort, Shanklands, has been on the market for the past two years and is still looking for a buyer.

The three new hotels earmarked for construction this year are the proposed Marriott in the Kingston area which will include a casino and entertainment centre; the Continen-tal Hotel on Mandela Avenue and another one at Main and Holmes Streets.

Buddy’s International Hotel, which was also opened for Cricket World Cup last year, has already been sold and is expected to change hands formally this month. The new owner is expected to open a casino by January 1, by which time the necessary gaming permits would have been issued.

The building behind Buddy’s, the Casique Palace, Suites and Ban-queting Halls, was never completed and that, too, was recently advertised for sale.
President of the Tourism and Hospitality Association of Guyana (THAG) Renata Chuck-A-Sang, in an interview with Stabroek News noted that one of the main problems was that hotels could not meet their costs while occupancy rates remained low.

THAG Past President Cathy Hughes said that while most of the established hotels were more or less fully occupied during CWC 2007, shortly after the major sporting event the occupancy rate slipped below 40%.

Hughes, the owner of the eight-room Ariantze on Middle Street said that during Carifesta her hotel was full, but last week when Stabroek News spoke with her occupancy was at 50 %.
She said the government needed to take a more proactive role in facilitating the industry through aggressive marketing of Guyana’s tourism products, which are strong on eco-tourism offerings, including bird-watching, adventure tourism, cultural and heritage tourism. These she feels are on par with, or, even superior to other similar regional destinations, such as Belize or Costa Rica.

Asked why the government should be marketing Guyana, Chuck-A Sang said it was the only national entity with the resources to do so. Barbados and Jamaica advertise their tourism product during prime time on international programmes including on the BBC and CNN.

‘Fantastic potential,
no strategy’

Meanwhile, Le Meridien Pega-sus, at an average of 70% occupancy, may be the only hotel with a consistent rate owing to its international brand name; it also benefits from international marketing, an advantage which smaller hotels do not have.

Stabroek News understands that the Cara Lodge and Cara Suites, which also enjoy good occupancy rates, are also not doing so well at this time. It was reported that the 250-room Buddy’s International Hotel only had two guests on some nights. During the recently held Carifesta X festivities, the government had placed a number of guests at  Buddy’s.

Asked about the occupancy rates at other hotels, Hughes and Chuck-A-Sang said while they could not provide figures the rate was very low. They referred this newspaper to some of the hotels which came into being during the CW 2007 and immediately after.

Chuck-A Sang said that one of the main functions of the Guyana Tourism Authority (GTA) − which was established by law – was marketing, but it had not been doing so aggressively because to do so required funding. “The GTA is woefully under-funded,” she said. And when asked about Guyana’s marketing strategy, she said, “Guyana has none.”

Guyana had fantastic potential, but most hotels, including established ones were getting tired of potential; they wanted realization of the benefits and return on their investments, since they had to pay energy bills, staff, daily upkeep and maintenance to provide a quality level of service, and all these were paid by room nights. “It is not just about hotels but about the restaurants and bars, the taxi services that work with the hotels,” she said, “it is about tour operators who cannot operate regular scheduled flights to local tourism destinations such as the Kaieteur Falls because they cannot fill a flight and they cannot afford to fly just two persons to the location  and back.”

She said tour operators continued to go to trade fairs and to host media familiarisation tours but these were not sufficient to advertise the industry as well as its potential. If the government saw travel and tourism as a viable part of the economy, it could not just do lip service, she said, adding that government had to invest in the industry to ensure its growth by building basic infrastructure in areas where facilities already existed.

She gave the example of the access road to the Jubilee Resort at Timehri that was in dire need of upgrading and the road to Lake Mainstay Resort; many promises had been made over the years by the government to upgrade the road.

Five years ago when Stabroek News visited the sprawling 5.5 acre-lakeside resort, the facility, which was rebuilt at a cost of $385M and commissioned with a staff of 85, was struggling to survive with just 12 workers. Today just the skeleton staff remains in place. The resort at the scenic location has 41 cabins including 32 double rooms and eight single rooms, in addition to a dining room, conference room, members’ club and other facilities.

‘Very challenging
economically’

While tour operators are willing to play their part as far as their purses could stretch, she said the times were very challenging and the
financial crisis in the USA and other parts of the world would affect the business traveller and Guyanese in the diaspora, who account for the highest percentage of visitor arrivals to Guyana.

Hughes, who said the current environment was “very, very challenging economically,” also said that the government needed to do damage control in relation to crime and security as part of its marketing strategy. “We continue to get enquiries about the security situation in Guyana,” she said.

Like Chuck-A-Sang, Hughes said there was no strategic marketing to attract a regular flow of visitors for other events so the industry had become a number’s game.
When on an average the visitor arrivals are pegged at about 115,000 a year, Hughes said even the small hotels needed viable, specific structured marketing.

The visitor arrivals last year were 134,097 when Cricket World Cup was held, compared to 113, 476 in 2006 and 116, 596 in 2005. General and regional elections were held in 2006 and would have accounted for a decline in actual visitors. Guyana recorded 121, 989 tourist arrivals in 2004, the highest figure ever, but this was surpassed last year with Guyana’s staging of the CWC.

The draft Environmental Social Impact Assessment (ESIA) done by the Environmental Management Consultants (EMC), which was submitted to the Environmental Protection Agency in its bid to secure an environmental permit to construct the US$52 million hotel in Kingston said an examination of the annual visitor arrivals between 1994 and 2007 indicated that the industry had not grown significantly. It noted that visitor arrivals totalled 112,824 in 1994 and 134,097 in 2007. This represented an 18% increase in arrivals over the 13-year period; it noted that Guyana would have benefited from tourist arrivals for Cricket World Cup in 2007.

“A comparison with the 1994 and 2006 arrivals shows just a 0.65 increase in visitor arrivals over the 12-year period. The arrivals record further reveals that apart from 2007 the number of visitor arrivals only surpassed 120,000 in 2004 between the period 1994 and 2007. This period also showed two distinct trends in visitor arrivals with there being a consistent decline from 1994 to 1999 and a marginal increase between 2000 and 2007,” the study said.

The EMC said, “Efforts to source data on the category of tourist and hotel occupancy rates proved futile.” Such statistics, the EMC study said, would have further enhanced the socio-economic discussion within the context of the proposed Kingston hotel development.