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eTN Executive Talk: Bahamas tourism minister talks about Travolta tragedy, recession, airlines

Hazel Heyer, eTN Staff Writer  Jan 09, 2009

Mr. Vincent Vanderpool-Wallace, former secretary-general of the Caribbean Tourism Organization, is currently the minister for tourism and aviation of The Bahamas. He was appointed in July 2008, which is the same time when Prime Minister Hubert Ingraham appointed him as a government senator. Minister Vanderpool-Wallace gave eTN this exclusive interview encompassing many stories that made the Bahamas today’s top of the news -- including the death of John Travolta’s son early January and issues that affect tourism and hospitality in the same way the US (the island’s source market) has been hurting from.

eTN: How has Travolta’s son’s death affected The Bahamas’ profile considering your island always gets the spotlight with US celebrity mysterious tragedies?
Vanderpool-Wallace: The Bahamas attracts celebrities. They come here because they don’t get harassed by the paparazzi and the locals. Plus we don’t publicize the fact that they’ve got homes here or they come visit here. So obviously, you only hear about them when there’s a tragedy such as what happened with Anna Nicole Smith, her son and Travolta. But what people don’t know, hundreds of celebrities have houses, apartments, boats and islands throughout The Bahamas because we give them the space they deserve.

eTN: Why did you recommend that nobody from the tourism department gets anymore involved in commenting on Travolta’s death in the press after former Tourism Minister Obie Wilchcombe was quoted in the beginning of the breaking news?
Vanderpool-Wallace: Firstly, this has nothing to do with dealing with tourism but a tragedy. So the first thing we tried to do is find who within the government structure has the greatest responsibility for the area where the problem was. Secondly, we don’t want tourism people to facilitate but to provide contacts to help. This has nothing to do with protecting tourism. We didn’t want it to appear that way; that’s way we stayed out of it. The reason why his name came up is that John Travolta happens to live in the constituency that he represents in parliament. He’s got to know the family over the years and looked after them in his area. It was just pure coincidence that his name came up.

eTN: On recession, how has your tourism economy been affected by the meltdown?
Vanderpool-Wallace: There’s no question about the fact that our business has been affected by the credit crunch because a significant part of our business comes from the US with people travelling close to their travel date. We’ve always enjoyed this travelling on ‘impulse’ decision. When the crisis started, the affect of the downturn was faster for us than most other destinations. The only way that other places had a different impact from us is that they had reservations and deposits placed for a longer timeframe; people could not get their deposits back. Today they realize new reservations are coming in slower, if not, on the same pace as ours. Everybody has been affected. Good news is the dismal forecast we put together in October (from July reporting 5-6 percent increase; year-end falling off 10-12 percent) is not as bad as what materialized (only 7-8 percent drop). But we are significantly behind last year compared to everybody else.

eTN: How has your resort gaming business been dealing with it?
Vanderpool-Wallace: The interesting thing (and I wish someone can explain this to us), our casino business did better over Christmas and New Years this year than last year. Part of the reason why our hotel business has not fallen off in revenue and occupancy is because we found the gaming business stronger than anybody has expected. We’ve been pleasantly surprised to find us doing better than any other gaming capital.

eTN: So did you dump rates at casino hotels, hence the incredible spike?
Vanderpool-Wallace: No. Interestingly, while occupancy and length of stay fell off, rates did not. We did not discount room rates, yet found Paradise Island and Cable Beach completely full on certain days. It may not be that on other islands though. Some rate erosion may be seen first quarter of this year, nowhere near as much a gain as we thought compared to this. The traffic will be coming from the US, by and large, which accounts for 80 percent of our business.

eTN: Speaking of gaming, is the master plan for the Grand Bahamas still online?
Vanderpool-Wallace: No. Unfortunately, there were a couple of projects that aren’t moving forward, not only in Freeport, due to the recession. Things are on pause until a rebound in the US market – which The Bahamas economy goes on track with, following the US consumer confidence index. Stories of lay-offs in the US do not do our tourism economy a good deal.

eTN: How many have been laid-off in tourism? And are you addressing this issue?
Vanderpool-Wallace: About 1500 people. But we have been grateful to the industry as we’ve been able to act more impulsively as numbers may have been much greater. Some properties have rehired people over the holidays. But in January, the temporary workers are no longer employed. But we think things will hold steady for some time. We’re now looking into marginalizing airfare expenses to stimulate arrivals. We’re making significant changes in the way we conduct tourism to the Bahamas through some research.

eTN: Go on…Air access has always been any island’s issue. Just how will you succeed in an economy like this with airfares still sky high?
Vanderpool-Wallace: We did a research as a test whether people will respond to very low airfares we come up with. We sold out up to 2000 seats in 3 days in an online offer for discounted airfare. We did another research asking US customers what will move them to travel if we give them a great deal – discounted airfare or hotel rates? Since we don’t want to discount hotel rooms (because keeping rates is important to our economy), but to the degree we can discount our airfare becomes an attractive lure. We will run very inexpensive airfares from the US and Canada. And it is a secret which many will find out very quickly!

eTN: If you don’t discount hotels and keep the occupancy tax, room tax, etc..won’t your guests think that they may have enjoyed cheap air but got hit on land deals?
Vanderpool-Wallace: We are not changing any single room tax in The Bahamas. We believe that our strategy will stimulate business to a point whereby raising occupancy by 3%, we’ll make all those taxes back on the front end. Whatever we can do to fill those rooms, we will do.

eTN: Speaking of airlines, is your new airport expansion on hold also?
Vanderpool-Wallace: Everything’s approved. Some 18 months from today and $305 M, we will have a brand new Nassau International Airport which will be the envy of the region. The new part of the existing airport will be integrated into the brand new one. The older part will be demolished and will be replaced with a new facility. Since The Bahamas has the most airports per capita (total 64/17 international)than any other country in the world; this is the beginning of an approved airport project with all principal islands’ airports to upgrade later.

eTN: What about any downtown overhaul?
Vanderpool-Wallace: We also approved the downtown redevelopment program so that when cruise ships call on the ports, our over 2 million guests can enjoy a new experience. A private sector company will run the downtown business improvement district. We are still creating the company.

eTN: On the whole, how many tourism projects have been stalled due to the crunch?
Vanderpool-Wallace: If certain projects went out of business, as the financing companies have gone under, couple of projects funded by Lehman Brothers, such as the Ritz-Carlton resorts have come to a halt in The Bahamas. There are a few projects funded by private money which will go on. We encourage those who have been limping along to seek financing to move along more rapidly. Even the Baha Mar project, although it slowed down, is still on the way.

eTN: Have you lost traffic to Dubai due to the opening of the Atlantis there?
Vanderpool-Wallace: Not at all. Remember most of our visitors come from the US. To choose Dubai as an alternative, the numbers will be so insignificant as to be relevant.

eTN: And finally, what is life like after the CTO?
Vanderpool-Wallace: This is by far the most exciting job I have ever had in my life. With the CTO, I had to persuade large numbers of individual countries to do something that is in the collective best interest of the Caribbean. In this job, I talk to my colleagues around the Cabinet table on a whole variety of things of general and good interest to one country. The scope of work is different, the pace of work is much faster!

eTN Executive Talk:  Bahamas tourism minister talks about Travolta tragedy, recession, airlines
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