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CHTA President Richard Doumeng Talks Caribbean Travel

By: Caribbean Journal Staff - February 28, 2013

Above: the Bolongo Bay Resort in St Thomas

By Alexander Britell

On Thursday, the long-awaited redesign of caribbeantravel.com officially launched. The new site, viewed as a new kind of portal for the Caribbean travel market, comes as the region faces challenges from a number of directions, including increased taxation, continued problems with airlift and competition from other sunny, sandy destinations around the world. To learn more, Caribbean Journal talked to Richard Doumeng, the President of the Caribbean Hotel & Tourism Association and the managing director of the Bolongo Bay Resort in St Thomas, about the launch of the site, the issue of taxation and how to brand the Caribbean region in a unified way.

What is the biggest challenge facing Caribbean tourism today?

Depending on the part of the word, obviously the APD [the UK’s Air Passenger Duty], the taxation of airlines and hotels is a huge challenge, because we are the easiest targets for taxation. We have the most pro-business governor we’ve ever had. He’s from the private sector, but even he has had to raise the hotel rooms tax, and the gross receipts tax, because [governments] have to look for [revenue] somewhere. So increased taxation is just gigantic. And I think the other challenge is that we need to truly partner the private sector and the government — no more talk, no more debate, no more theoretical studies. If we don’t pool our resources, both human and financial, we’re going to sit there and go over a cliff together.

I am encouraged, because I really believe that caribbeantravel.com and the Caribbean Tourism Development Corporation [a partnership between the Caribbean Tourism Organization and the CHTA] is going to really be our salvation. And it helps save both organizations, because we have two separate budgets — which makes no sense. It didn’t make sense when we were all making money. Economic hard times are what brought us together. We finally realized that we needed to pool our financial and human resources. Because we are competing against the world. And for so long, hotels and governments just always thought they were competing against each other. And it’s just ridiculous. Every hotel that was destroyed by the tsunami in Southeast Asia has been rebuilt. They’re all rebuilt. It’s warm weather destinations anywhere in the world. So let’s get them back — take a few dollars of your budget and put it in a regional marketing effort to reclaim the Caribbean, the world’s largest unowned brand name, and take a few percentage points, put it in a regional marketing campaign, and get them to come to the Caribbean. And then we can fight over what country they come to or what hotel they stay at.

Have you seen any progress made on the APD issue?

I have felt, in many ways, uncharacteristically optimistic for a guy who’s “Mr Cynical” and “Mr Skeptical.” But the taxation problem is very daunting. Because it’s starting to feed on itself. Because what some governments have done now, because of the decline in visitors from the UK, what governments have done to make up the tax shortfall, is start increasing their departure taxes. So now you’re going to punish people who are paying that much extra for APD by charging more in a departure tax. And I am an American, and live in a US destination, but I really think we should consider taking our advocacy efforts to the people, and perhaps get outside of the halls of government and start appealing directly to the people of the Caribbean, the Caribbean nationals who live in the UK, musicians and athletes and people like that, and change the public perception of it. Because we have tried mightily. Sometimes you can question an effort the private sector has made, but CTO and CHTA, my predecessors have worked absolutely fanatically to deal with this. And it’s only gotten worse — they raised [the tax], for goodness’ sake.

VAT is another tax that is becoming increasingly popular among Caribbean governments. How does that impact the tourism sector?

Again, I’m not a finance guy and I’m from a US destination, but on a sales tax, you can make a decision on luxury items, that it can be on liquor and cigarettes and jewelry and cameras and watches. But the VAT, if you put that on hotels and a lot of hotels that are all-inclusive, even if the percentage is small, the dollar amount is significant. And again, you’re punishing the people, because I try not to whine — I try to enforce the no-whining rule on everybody, including myself — but when all the people who come here to spend all the money on your island, they stay in a hotel. So I don’t think it’s unfair to put accommodation in a separate category when it comes to taxation. We’re a revenue-generating business. We’re not consumers of goods and services, we’re providers. And so I think we deserve to be looked at in a different way. Even in budget cuts, when you cut the budget of the Department of Tourism, you just took money out of the advertising fund, and that’s a revenue-producing department. I know you’re not going to cut from the Department of Education, but the fact is that the Department of Tourism can put money into the Department of Education coffers – but the Department of Education can’t put money into the Department of Tourism coffers.

Do you think tourism is appreciated enough by governments in the Caribbean? The region clearly needs to diversify its economies, but do you think tourism gets enough attention?

Well, of course not. Because I’m a 56-year-old guy who’s been in the industry since he was 13. We’re trained that any time a government says anything about tax, you have to fight it, because if you ever agree with the government on taxation, then they’ll hammer you forever. For instance, the room tax. When we had an 8 percent room tax, we were the highest in the Caribbean, 17 years ago. So when the government looked at going from 8 to 10 percent, and it’s a consumer tax, not a business tax, they looked around, and 10 percent was right, dab in the middle. So people were shocked when I didn’t fight that. We accepted it, because you don’t expend all your political capital always fighting. Because then the governments don’t trust you even when you have a legitimate complaint. That’s one of the challenges. We’re taught to be adversarial all the time, so even when we’re right, they don’t listen to us, because we complain about every issue. I think, slowly, governments are appreciating it. Also with the cruise industry. Because the cruise lines can play hardball, God love them. But you don’t hear about increased taxes on cruise passengers anywhere. When was the last time you heard about a head tax increase for cruise passengers? Why not? Because the cruise lines can do something the hotels can’t — they can just go somewhere else, to a port that isn’t going to charge them $5 extra. Hotels don’t have the ability to just pick up and go to the Mediterranean or somewhere else. We’re an easy target for taxation, and I think the governments sometimes just lose their cleverness, their thoughtfulness, because we’re such an easy taxation target.

You’ve talked in the past about branding the region, marketing the region together. What is the best way to do that?

They’ve done the demographic studies, the “Q” factor studies, the name recognition factor. More people in the world know the word “Caribbean” than the name of any island. The Caribbean is a word that elicits something in almost every person’s mind. When you say the Caribbean, it does have a visceral response to it. And as Vincent Vanderpool-Wallace has said, nobody owns it. We don’t have to ask for permission to use it. So you need to get over your nationalistic stuff, because the Caribbean is bigger than you are.

What kind of impact can caribbeantravel.com have?

The URL had been dormant for over four years, because we haven’t had the money — CTDC broke apart again. But it had half a million unique visitors last year. Because of the word Caribbean. Because a lot of people said, “why do you have this old site still up if the new one doesn’t look anything like it?” Because the answer is because of the SEO [search engine optimization]. You’re not going to turn that down, even though we want to have half a million visitors a month. So it gives you hope for the future, because it’s the word Caribbean. So I really believe we’re on the right track. It’s going to be affordable. All of the governments have been accused of giving too many breaks to chain hotels, to the Spanish, now the Chinese, the Marriotts and the corporate giants. They’re all concerned about the independent guest houses and small hotels and supporting them. Caribbeantravel.com gives you a direct link to your property. And Sandals is going to look like Abe’s Guest House. So it’s a place where you’re going to have an equal chance to tell your story. And the governments should know that, because they keep saying they should support the small hotels and guest houses and bed-and-breakfasts. But this is a way to support it. Because you’re going to have a world-class platform for consumers to find them.

I frequently ask tourism officials about visitors from the Latin American market. Can uniting in the way you’ve described help market the Caribbean to Latin America?

Obviously, just follow the cruise ships. Carnival has a huge reservation centre in Brazil. They’re already there. So it gets back to air transport. Because right now, the way the distribution channels work, the air channels work, is that you’ve got to fly past the Caribbean to Miami to turn around and come back down to the Caribbean. We’re finally finding that there’s real interest in the Caribbean, but we don’t have ways to get them here. So that’s really the first step, through Puerto Rico or Jamaica, or other areas for connectivity. Because with the airport experience the way it is now, if I can get on a plane and arrive at my final destination, that’s a lot easier sell. And we’re held hostage, because you can’t take a train and get in your car and get here. So when the cost of somebody else’s product has such a heavy factor in deciding whether or not you’re going to buy my product, you have to have that focus. But yes, Latin America, the burgeoning economies in Argentina, Venezuela, Brazil and Chile to an extent, yes, there’s big demand and big potential. It’s closer, with all due respect, than to the China market, and I think we should be focusing on closer places where it’s easier to get to us. And the Latin American market is there — if we can figure out a way to get them here easier.

What do you see as the primary role of the CHTA, or what should it be?

The CHTA should be thinking about how our decisions benefit our members. And, understandably, we have engaged, we have done strategic partnerships and things like that, that benefit the association, without necessarily benefiting the members. And we need to switch that a little bit. My three least favourite letters in the English language are ROI. Because everyone’s so ROI-obsessed, and in our business, it’s an intangible thing, because we don’t produce a product. I spend $50,000 to advertise a phone, and if we sell $100,000 more in units, it was worth it. So for us, it’s a little trickier. Our partners also need access to our members. I think we’ve been more of a top-down association, than kind of a central organization that helps put the right people to the right places. Because if you’re a hotel that has money to go solar, and you’re a green energy company, my primary role should be to put the two of you in touch, instead of just making you a strategic partner and putting you on a banner and saying we just got $30,000 from the ABC Solar Energy company, and there they are. So it has to be a better conduit and facilitator of putting allied members together with hotel members.

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