Tobago: $250M fund for Tobago tourism

Tobago: $250M fund for Tobago tourism

In a robust attempt to boost Tobago’s flagging tourism sector, Trade Minister Stephen Cadiz announced the coming on steam of a revamped Tobago Tourism Development Fund (TTDF) to bolster sluggish businesses and create new ones.

The fund is expected to generate $250 million.

He made the announcement during the post-Cabinet news conference at the Magdalena Grand Resort in Lowlands, Tobago. It marked the Government’s fourth Cabinet meeting on the sister isle.
Cadiz said once the businesses meet the criteria for the fund, Government will work with the commercial banks and financial institutions with which they do business, with a view to upgrading their establishments.
He said the initiative was intended to increase tourist arrivals and the quality of room stock on the island.
“I think the arrival figures from what Dr (Rupert) Griffith (Tourism Minister) has mentioned, we have already started to see an increase in the arrivals,” he told reporters.

Cadiz said the Magdalena Grand Resort, which was opened for business several weeks ago, provided an example of the increase in tourist arrivals to the island.

“I know that the hotel here, for the past couple of weeks, has been running at a 80 to 90 percent occupancy, which is quite substantial for Tobago. We haven’t been seeing those levels of occupancy for some time,” he said. “We see that it has already started to work and we feel that without a doubt, the Tobago Tourism Development Fund will definitely be in a position to keep a lot of Tobago businesses afloat.”

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Noting on of the motives behind the initiative, the minister said some business owners simply did not have sufficient money to reinvest in their operations.

“The hotel business is a peculiar business. Every ten years you have to literally gut your hotel and that is an average for the hotel industry. And for many, many years, with the arrival figures declining, hotels have not found the additional cash available to reinvest in the hotels,” he said.

Minister in the Ministry of Finance Dr Delmon Baker, who is playing a key role in the initiative, said the ministry, along with the Tobago Chapter of Industry and Commerce
and the Bankers’ Association were finalising the criteria for access to the fund.

“When we initially started on this project, it was envisioned for us hotels whose room capacity was 50 rooms or less would be ideal for access to our fund in addition to which those hotels that are 50 rooms and above would access the Government’s loan guarantee programme at the Ministry of Trade and Industry,” he said.

The hotels must demonstrate they can pay the interest on their loans for the past three years and must be free of other encumbrances.

“We are hoping that soon they will be contributors to the fund and we came up to a figure of about $250 million; $100 million being provisioned for fiscal 2011 to 2012 and $50 million every year thereafter for the next three years being provisioned by the Government,” Baker said.

He disclosed it was envisaged that a fixed portion of the GDP of the country will be assigned to the fund to create a safety net that would secure the tourism sector for years to come.
Cadiz said tourist arrivals in Tobago have been on the decline since 2005.

However, Government intends to help improve the quality of the hotel room stock and flight services to Tobago.

“We would be looking in the vicinity of about 1,200 quality rooms being required and that requirement spoke to issue of airlift coming into Tobago,” Baker said. Referring to the Magdalena Resort, Cadiz said E-TecK, which owned the property, had decided to refurbish the facility after it was left vacant for close to three years.

“Last year, we determined that we would bring this facility back up and in less than five months we were able to take the facility and for those of you who knew the facility, take this facility from the condition that it was in and we started work in September of last year and January 1 of this year, we actually had guests arriving here to stay at the hotel. So, it is quite a feat on our part, of being able to get this hotel up and running,” Cadiz said.

He said Government, in discussion with the Ministries of Finance, Tourism, Trade, Planning also agreed to a guaranteed programme with potential investors coming to Tobago.

“The basic criteria is that we would be providing up to 70 percent of the value of the hotel and that would encourage people, financiers to actually start in the direction of a new tourism plant,” Cadiz said.