Sink or Float ?

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This era can be characterized by a series of economic challenges which started with United States economic crisis in 2007 , quickly followed by the global economic crisis in 2009. Other countries such as Greece, Portugal , Spain , Ireland to name a few, also suffered from the repercussion of ballooning government debts.

By August 2014, amid the fragility of slow economic recovery for the United States and Britain , OPEC began major talks forecasting uncertain times for economies hinged on “black gold”. Venezuela, T&T’s  neighboring oil producing country,having been in political crisis for some time, is now faced with the added pressure of the plunging price of oil , worsening the country’s fragile economic situation.

Russia, on the other hand,  an emerging national economy , a major player of BRIC (Brazil, Russia, India and China), when oil was trading at $100 a barrel, had to declare the country’s recession by mid year 2015. Russia had the pressure of western sanctions but the slump in the price of oil quickly changed their financial standing. As a result the central bank of Russia halted FOREX as a means to moderately draw from its reserves and to maintain a facility to finance future federal budgets. Even the economy of Brazil has been downgraded by the ratings agency and  projected 3% contraction by year end 2015.

As a mere observer of the world economic situation during these tumultuous times of volatile stock markets, combined with the crisis of world strife, natural disasters and impending political threats, it should be obvious, that Trinidad and Tobago is not impervious to these circumstances.

Research has shown that there are three elements which constitute a crisis: a trigger to cause a change; the inability to cope with the change; and the threat to the existence of organisations.

The trigger of the slump in the price of oil is controlled externally by world market forces which has impacted on the financial stability for the islands.  Therefore, it is somewhat difficult to comprehend why our leaders wish to debate the terminology of whether T&T is in a Downturn or Recession. The issue that is before us, is that the Government needs to be proactive to maintain positive financial indicators, attractive for foreign investments. Ultimately , public outbursts against financial governance of our country  would only compromise our nations international reputation.

My focus with this article is to look at whether the tourism sector can weather the storm. The fact is, threats from external forces would be the cause for a recession and it would impact on the US currency and taxation; whilst internal forces would impact inflationary costs, resources, and profitability . With both internal and external forces being negative then the outcome of how our leaders and our association cope with these threats would determine the perception of our tourism sector. It is expected that with the shrinking of capital markets and decreased government and corporate spend, that the tourism sector would be the first to feel the pinch.

Greece, for instance, has shown that the impact of the recession has affected lodging, food service, events, activities and hospitality products. Many resorts were faced with foreclosure, whilst others provided limited services. Government spend on health and sanitary services also shrunk, leading to limited medical services and poor standards for the industry. Crime , unemployment and other social issues also impacted negatively in the industry forging a low tourist perception of the destination. Thus, the issue of convincing a consumer to travel to a destination to consume products and services in this climate would be a difficult. Therefore innovative strategies, such as using comparative advantages and other business measures are needed to adjust to these adverse business times.  Interestingly, one of my colleagues, the Vice President of Russia’s largest leading restaurant company concurred, by being resolute in taking action to steady his business.

With respect to the sector of  T&T , after the state of emergency in 2011, many operators knee jerk response were to lower prices for market positioning.  With the continued shock to the sector and the flat line approach to effective destination management, combined with unsustainable plans,  many operators have been unable to rebound to regain levels of occupancy and prices.

I suspect that with the contraction to the economy, stakeholders would have to revisit people management, revenue strategies, innovative business model restructuring; whilst government should consider niche product lines, incentivized programs, re visit  green policies and conservation priorities, review taxation to name a few.

These solutions , in my perspective, with the collaboration of stakeholders and government, can positively transform a declining industry to become resilient in the impending perfect storm.

Identifying Brand T&T

What imagery is conjured in your mind if I were to ask for three words which describes the Caribbean?   Unknown to many, the Caribbean have been left with a legacy of Sun,Sea and Sand,( 3 S) which has been impregnated in our minds .  An automatic target market source for Caribbean destinations, enticing visitors to soak in the sun, the lily white sand, sipping cocktails by the beach , the wafting sounds of the sea and the steel pan.  Therefore the 3 S strategy which the Caribbean inherited should not be pushed aside as some may have suggested that  “we no longer should be identified as Sun, Sea and Sand”. Many top destinations in the Caribbean have continued to use the 3 S strategy and have smartly introduced distinguishable trends to continue to drive visitors to their destination.

Tobago, historically attracted  visitors to the island using the 3 S strategy as it has the beauty and natural attractions. A few trends have been pitched over time in Tobago but their promotion showed no sustained growth. Trinidad, on the other hand, is not known for coastal beauty as the other islands, but marketers have failed to promote her unique natural attractions. Trinidad’s primary campaign promoted two trends: Business and Carnival. Unfortunately, other tourism trends, such as sport or cultural events have been compartmentalized, thereby limiting any progress for a sustained projection for new markets to the island. Statistics will show that T&T collectively have not shown any major tourism growth over the years.

Industry leaders are aware that the tourism sector in T&T is heavily influenced by the political power, and whatever language that is spoken in politics, should be our reality. Furthermore , the politics within each tier of the industry is also integral to what direction has been taken, and therefore all stakeholders, standing committees, boards , industry gurus are accountable for the position held today. It is interesting to see the current intention to move tourism from the trunk to the driver’s seat with strategies that are seemingly irrelevant today.

Evidently , T&T being a unitary state has one political party formed as central government which can change every five years whilst Tobago, the smaller sister isle has a general assembly with political ties, funded by central government to manage the Tobago affairs. Indeed, at this level of a vertical relationship, rivalries will exist : trust, political bias , funding inequities and inferiority issues resulting from perceptions of the different status. According to research by Cameron & Lewis “Marketing small twin-island states: Prospects and Constraints”  some tourism experts interviewed in the paper identified three brands for T&T : Destination Trinidad , Destination Tobago and Destination T&T. What does this mean to the average national? What does this mean to the consultants , politicians, directors, boards?  The only resolve to this question – Perhaps Nothing!

What this suggests is that mixed messages has been communicated to the international market who would have a blurred perception of T&T  as a destination. Therefore, if the strategy of three brands for T&T is a layoutcacophony of messages, with consultants promoting a myriad of smart logos, acronyms for T&T (for instance the resurgence of Terrific & Tranquil ),  then by all means let us continue in the vein of a disconnected T&T Brand!
Granted, it is no easy task to create an image for a twin island state but fortunately many other destinations such as Hawaii,Canaries, Maldives, Malta, Azores, Seychelles, Bahamas and Abu Dhabi have a chain of populated islands with their share of challenges and successes.   According to studies, Bahamas brand strategy 2010, promoted pictorially its chain of islands , and then each island promoted independently offering grand resort accommodation, with the intent to entice the visitor to island hop. The success of Bahamas was short lived as marketers did not consider inter-island cannibalism competing for the same market , a disconnection of the destination Bahamas and a further disconnection of the culture of the people.  On the other hand, destination Abu Dhabi took a totally different approach, where they consolidated the chain of islands under one simple Abu Dhabi brand. They offered a mix of products, events, activities , infrastructure, on each island targeted various markets and successfully implemented an efficient Hub and Spoke model to encourage island hopping. The success of Abu Dhabi is sustainable and can only improve with the steady growth path upon the foundation laid. No doubt they have  challenges but the purpose here is to understand the image of the Abu Dhabi brand to the world.

I would also introduce very briefly, where it was also suggested that our image be represented as Trinidad , POS Brand; &  Tobago,Scarborough Brand. This concept of city branding is used by Jamaica and Mexico but suffice to say it cannot be a consideration for T&T unless our infrastructure and inbound traffic can accommodate mass consumption of products , services, inventory , etcetera  in the mix.

Indeed, it may be wishful thinking that the tourism policy under the provisions of central government can consider equitable and harmonious development of a consolidated identity for T&T.  It is my perspective that a clear identity must be forged by establishing a strong foundation of sustainable plans of a unique mix of products , cultural connectivity, infrastructural development, and trend development. T&T is already poised with many positive attributes in its favour!

In light of this, a consolidated image that is not complex is powerful, the perception and experience received that will match the image will be the strength of the brand, and a great way for T&T to start grabbing the attention on the world stage.

Author: Lisa Shandilya, MBA.(Specialized), CEM., B.Sc., 20 years Practitioner in the Hospitality and Service Sector, Member of THRTA, Speaker on International Hospitality and Service Industry Seminars.
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