A budget balance -Budget 2015/2016

The budget presentation for 2016 themed “ Restoring confidence and rebuilding trust- Let’s do it together” seems like a balancing act of the new administration manifesto promises and the stabilization of the economy. The 2016 budget presentation considered measures of appropriation of funds to various sectors, despite the challenges of low production of oil and gas, foreign exchange constraints, and increased public sector constraints.

The primary focus of this article is to review the measures taken for tourism sector of Trinidad and Tobago. Quite evidently, the PNM administration fulfilled Tobago election promises with a 4.4 % increase for fiscal year 2016. An injection of T.T $ 2.772 billion dollars of which a percentage is provided for capital expenditure.  However, a large percentage of funding has been injected to boost tourism in Tobago through infrastructural development, such as: increase and improvement of room stock, air bridge and sea port capacity, new and equipped police and fire stations, and a much needed waste and water management facility.

As we know a budget is a forecast which the Government will try to keep to its mandate throughout the fiscal period which they have hinged on the oil and gas dollar. Interestingly, if i quickly review the tourism measures of the 2014/2015 budget by the previous regime they too spoke of diversification of the economy which was also in their mandate. It is of course quite evident that there was no shift in their plans to boost tourism ,as their plans were based on replicated initiatives of a medium term policy framework that has been in existence since 2009. What is pertinent for discussion is that tourism sector despite these annual injections of fiscal incentives, was and is faced with, a slump in tourism, leaving many in the industry fighting for survival.

This slump, in my humble opinion may have arisen from poor air/cruise carrier negotiations, low affinity to tourism, increased costs of living, limited tacit knowledge of the sector by those in authority, lack of strategic direction, to name a few. In other words, no direction of policy, measurements and action plans as applied to the sector will have the tourism of T&T ,using our local parlance, in a  “voops! vaps! ” dilemma,

How then would this shift be made if the systems and structures remain the same with the plethora of challenges in the tourism sector? Furthermore, how can we treat with a sustainable plan for tourism if the government is leveraging on a new record low oil and gas price?

The new administration spoke to the diversification of the economy underpinned by stakeholder forums to steer the direction of the various sectors to develop a tourism growth strategy, which,in my perspective is a great start for all players to understand the value to industry to the economy. Of course this will take time and therefore, it becomes prudent that the voice of the stakeholders through associations (THTRA, THRA, TTITOA, etc.,) can collectively work together to suggest solutions to steer the way forward for the growth of the sector.

The Honorable Minister of Finance, Colm Imbert, also alluded to the environment and socio-cultural improvements, one of the major indicators in tourism competitiveness. Funds injected for renewable resources such as Solar Energy; Water and Waste Water Management measures which was started by the former regime was re introduced in this year’s budget; the introduction on restoring green policies; protecting/enhancing natural resources through partnership with environmental groups; emphasis on improving creative industries (art, film and fashion); the development of sport and the rejuvenation for the agriculture sector, can be amalgamated towards the development of the tourism product of our destination. Out of these various sector reform growth plans one can therefore presume that the tourism strategy would be aligned to the tourism trends in areas such as: sport, eco/adventure, business and leisure/culture. Furthermore, with the allocation of funding directed to National Security with the intent to improve the security and safety of nationals and tourists, is also a fundamental competitive indicator for the sector.

The Hon Minister of Finance also spoke to intermediary support, that is, the role of Ambassadors and a tourism steering committee, as having more robust performance measures with the mandate of improving tourism and hopefully not enlisted for personal agendas.

Despite my delighted view on conscious awakening by the Finance Minister of what Trinbagonians own and have not recognized, I felt a bit disenchanted however that money or partnership agreements for rebuilding heritage sites, museums, hall of fame, carnival artistry, duty free port , risk recovery fund, labor reform, policy reform were not included. Unless, it is to be further discussed within the steering committee mandate.

Another discerning issue, is the increased cost of fuel , the increase in the green fund, the unknown property tax cost, and the other factors of degeneration of income, which would inevitably increase the costs on labour and supply chain.This would have a domino effect as transportation fares increase despite the talk on CNG fuels,  then so too the cost of goods sold, wages, and operational costs. For property owners, who have been complaining of low ADR (Average Daily Rates) in the industry will inevitably feel the pinch on escalating cost. With these creeping costs, despite the lowering of VAT to 12.5% at the start of 2016, the industry will be challenged to maintain quality, improve product and keeping a price of “value for money” to the customer. Herein lies the challenge for the government to effectively market T&T destination with these major shortfalls that will be faced by the stakeholders. Hoteliers/ Operators, more so, the independent properties, will definitely have to regroup to consider going green to cut costs, using technology to reduce labour charges, be creative with training methods ,review customer incentives and ensure that any incentive program offered by government for hotels, is without bureaucracy.

Inevitably, the buck stops with the direction of sound macro and micro policy plans by the government and through the stewardship of the leaders in the industry, to truly take tourism out of the doldrums where it has been sitting for years.