By. C ben-David

Buccament Bay Resort, shuttered in December 2016, may never re-open given its huge debts and multiplicity of overlapping creditors.

In a press conference on Feb. 20, 2017, the Prime Minister of St. Vincent and the Grenadines (SVG), the Honourable Dr. Ralph E. Gonsalves, again urged the private sector to invest in building more hotel capacity on the mainland (“I want to say to the hotels, please, get up and be activist”) now that Argyle International Airport (AIA) is finally operational, a plea other officials have repeatedly made as well.

Once again, this entreaty is bound to fall on deaf ears. This may be why the Prime Minister announced in his 2017 budget address that he had secured Cabinet approval on Jan. 18, “… to build a 250-room hotel in St. Vincent, through the instrumentality of at least two State agencies, and to engage a company with a global brand to market and manage it,” a desperate grasp at the ruinous socialist straws that even Cuba is tentatively beginning to release and which devastated the Jamaican tourist industry when the nationalization of foreign hotels and other entities beguiled Michael Manley during the 1970s.

In previous essays (see numbers 33 and 36 below), I estimated that roughly 20,000 tourist and other visitors from around the world annually stay in various commercial establishments — resorts, hotels, apartments, guesthouses, and private homes — on St. Vincent Island (SVI). Given that our Tourism Authority does not publish a comprehensive breakdown of these figures — while readily making them available to the airlines the government is desperately trying to court — I was forced to extrapolate that about 6,500 of these visitors arrive here from outside the Caribbean. These are exactly the tourists AIA was built to attract.

Even if I inadvertently low-balled the 6,500 figure, and the true number is 50 per cent higher at 10,000 overseas tourist arrivals, these visitors could be accommodated easily by our existing mainland hotel stock of 750 rooms (which includes the shuttered Buccament Bay Resort listed on its Internet site as “temporarily closed and plan[ning] to re-open in spring 2017 after refurbishment”), most of them either closed or with few North American and European guests five months of the year.

At the same press conference, the Prime Minister said that the entire nation of SVG (i.e., SVI plus the Grenadines) has 2,200 hotel rooms with an annual occupancy rate of 40-50 per cent, a figure well below the 60-67 per cent Caribbean hotel room average. Whatever the separate mainland occupancy rate, it is surely much lower than the better known and more popular Grenadines, some of whose islands are world-renowned holiday destinations. My best guess, partly grounded on personal observation and partly on the large number of mainland hotels that have shut down, are listed for sale, or have repeatedly changed hands over the years, is that SVI has an annual hotel room occupancy rate of around 30 per cent.

The Prime Minister would be hard pressed to dispute this estimate even if we ignore his “hasty generalisation” logical fallacy that we need more accommodation capacity because all mainland hotels were bursting at the seams during the Feb. 14 AIA opening, a one-off event if there ever was one.

Given this low annual SVI occupancy level, our veteran mainland hoteliers should not be castigated for hesitating to add rooms until many more tourists arrive. Rather than being “risk adverse,” as the Prime Minister called them at the press briefing, or “traditionally … very cautious,” as ill-informed accountant Brian Glasgow opined two years ago, our business class, including our hoteliers, are hard-nosed entrepreneurs who know how quickly our tiny, cash-strapped, small growth, and limited opportunity economy can wipe out reckless expansion, a lesson Dr. Gonsalves’ cousin, Ken Boyea, was taught in early 2015 (see essay 8), a painful repeat of what legions of other bankrupted businesspersons, including owners of failed guesthouses and small hotels, have learned for years.

Our hospitality room numbers support these assertions. Based on the Caribbean 10-day holiday industry average, a 30 per cent occupancy rate by two guests per room would translate into 16,425 guests, or 3,575 less than my estimate of 2015 Arnos Vale airport arrivals, using the following formula: 750 rooms x 2 guests per room x 36.5 ten-day blocks x 0.3 occupancy rate.

Even if all existing rooms were continuously occupied by two people staying for two weeks, this would require 39,000 guests (750 rooms x 2 people x 26 two-week blocks), or nearly double the present number of stayover visitors.

If these same rooms were full for a one-week period, the most common length of stay, this translates into 78,000 guests, or nearly four times the current level.

The May 3, 2017 announcement that Air Canada will be flying to AIA once a week nonstop from Toronto between Dec. 13 and April 12 on small planes carrying 136 passengers would not alter these figures even if all 2,312 passengers were international tourists, a ludicrously improbable figure to say the least.

What this means is that even if the inflated 10,000 number of extra-Caribbean holiday visitors explodes to 30,000 over the next few years because of AIA — a Ralph Gonsalves-style “veritable miracle” if there ever were one (see essay 47) — and assuming the figure for hotel occupants from other Caribbean countries remains the same (a reasonable assumption because they would continue to arrive on the mainland by regional aircraft or boat), only a couple hundred more rooms could easily house 30,000 guests even at an occupancy rate of 80-90 per cent during the height of the tourist season.

What is missing from these hypothetical estimates of more holiday visitors is the motivation for travelling to our tourism-challenged mainland, namely, the appealing features that would draw guests to SVI rather than to other places like, say, minuscule but luxurious and captivating Anguilla (35 square miles, or 90 sq km, and a population of only 15,000 people), a formerly dirt-poor island with few non-tourism resources which now attracts over three times more overnight visitors than our mainland (not to mention thousands more cruise ship passengers and yachters) without the presence of an international airport. The not-so-secret tropical holiday fact is that Anguilla more than compensates for the “travel inconvenience” of no international airport — the baseless justification for building stillborn AIA — with its 33 pristine white sand beaches (see http://www.anguilla-beaches.com).

More problematic still for our long-term development is that magically tripling visitors to 30,000 a year — the 2013 prediction of tourism minister, Cecil McKie –even without suitable attractions, would still not make AIA a value-added national project, given the looming interest payments on its EC$400 million debt and EC$20 million annual operating costs.

More disconcerting still is Minister McKie’s bare-faced denial of his three-fold increase in holiday arrivals claim and replacement of this figure by a World Bank estimate that AIA would see visitor levels increase by a mere 10 per cent within the first three years of its operation (http://www.iwnsvg.com/2017/02/22/how-many-persons-came-to-st-vincent-on-the-valentine-charters/ ).

If this World Bank estimate is accurate (I have been unable to determine its primary source) and if the 60 per cent empty seats on the Feb. 14 and 21 charters are a sign of things to come (see essay 48), this is more proof that building AIA was a foolish gamble whose losses in the form of debts and extra operating costs will choke us for decades and whose folly has already meant a decade of lost opportunities for development in more productive areas.

***

This is the 52nd in a series of essays on the AIA folly. My other AIA essays are listed below:

The views expressed herein are those of the writer and do not necessarily represent the opinions or editorial position of iWitness News. Opinion pieces can be submitted to [email protected]

The opinions presented in this content belong to the author and may not necessarily reflect the perspectives or editorial stance of iWitness News. Opinion pieces can be submitted to [email protected].

St. Vincent Island doesn’t need any more hotel rooms

Share this: