In a letter published in the Bahama Journal on July 7, one B. Ferguson (BF) contended that the report, written by longtime resident Ralph Massey, was off base in its analysis of the financial problems of the Bahamian hotel industry.
BF said that extra charges for gratuities, taxes and excessive mark-ups on items like beer and phone calls were responsible for the Bahamas’ high vacation costs οΎ— not high overheads and low productivity, as the report claimed.
He argued that by reducing such charges hotels would attract more customers and would not be asking the government “to resolve the industry’s problems;” they would “do what obviously Kerzner International has been able to do” and “might then stop all this moaning.”
According to Mr Massey the add-on problem is not confined to some hotels in the Bahamas. Bjorn Hanson, a hotel industry analyst for Price Waterhouse Coopers, observed that “the travel industry [as a whole] is under financial pressure…and ‘surcharge syndrome’ has been an almost universal response to help compensate for base prices that have been forced down by a weak economy, travel jitters and war.”
However, Mr Massey points out that surcharges were not addressed by the task force report.
“If BF had read the report, he or she would have noted that the comparative hotel profitability data contained in the report was from the same system so that the Nassau hotel data was comparable to that shown for its Caribbean and North American counterparts,” Mr Massey said.
“Low labour productivity, pilferage and high utility costs adversely affect the absolute and relative profitability of a Bahamian enterprise, and causes hotel investment to go elsewhere despite the great natural tourism resources of the Bahamas.”
He added that the report’s proposals for a national economic recovery plan…(skills education, privatisation of utilities, reform of the justice system, a business friendly free-market environment and increased public sector efficiency) will improve prospects for both the hotel industry and The Bahamas as a whole.
“BF should contact the Chamber of Commerce, get a copy of the report, read it and then write another letter,” Mr Massey said.
Source: The Nassau Guardian
