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ANDREWS UNIVERSITY AFFILIATED AND EXTENSION PROGRAMS UNIVERSITY OF THE SOUTHERN CARIBBEAN P.O.

BOX 175, PORT OF SPAIN

SOE Benefits and Disbenfits on Trinidad and Tobago hospitality Industry

An Assignment Presented in Partial Fulfillment Of the Requirement of the course Hospitality and tourism Management

INSTRUCTOR:

Mr. Cliff Hamilton

By

Onika Blandin,

21 November 2011

APPROVAL
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SUMMARY This study reports on findings of the perceived benefits and dis-benefits of the State of Emergency in Trinidad and Tobago Hospitality industry in Travel, Lodging, Foodservice and Recreation. It also analyses these perceptions for future recommendation. The study used random operation samples from respondents along Trinidads east west corridor and Tobagos capital Scarborough. In general, respondents from all four scopes of the industry felt that the S.O.E has significantly impact on their revenue flow, although the extent of the impact varies among them. More than 75% of the lodging and 50% of respondents felt that the S.O.E. played a dominant role in reducing economic activity in their respective segments; some 75% of the respondents said that the S.O.E. negatively influenced their organizations human resources, more respondents disagreed than agreed with the view that the S.O.E. offered their respective business short term and long term benefits. However, there were some areas of consensus in relation to the future economic impact of the S.O.E. and 25% felt that they would see benefits. All participants maintained the view that the S.O.E. dis benefits will have negative ramifications to their businesses. The majority of respondents shared the positive view that the S.O.E in facilitating the reduction of drugs and ammunition will help restore visitor confidence and safety, and end the negative advisories issued by visitor countries. Some 95% of respondents from Lodging followed by 89% from Travel and 88% from Foodservice agreed with that view. Respondents were asked to identify DISBENFITS and BENEFITS of the S.O.E. their responses were as follows:

Disbenifits: High loss of revenue, slow business recovery, impaired economic development, increased unemployment and loss of visitor confidence were commonly identified dis-benefits of the S.O.E. Benifits : The removal of illegal drugs and ammunition along with reduction in overall crime, should lead restore visitor confidence. OBJECTIVE This study reports on the perceptions and attitudes of residents, to the S.O.E. It focuses on perceived long and short term impact on the sector that is whether its a benefit or dis-benefit, to their organization. This study will seek to find out what residents think about the S.O.E and how they feel about it, with a view to determining what policies and measures are required for addressing any actual or latent issues that may be identified. Essentially, it arises from the belief that the perceptions, attitudes and welfare of residents are as crucial to the sustainability of the tourism product. The main output from the exercise will be a definitive report on these implications on the vital Hospitality sector, awareness and understanding of the perceived impact, whether negative or positive along with the necessary reforms, policies and measures for maximizing the potential gains and sustainability of the sector. Specifically the study has sought to: Determine the attitude and involvement of those involved in the hospitality industry in relation to the SOE. Evaluate the perceived economic and social impacts of the S.O.E. Assess, from responses, the perception and attitudes of the stakeholders.

Methodology Interviews were conducted with tour guides, restaurant manager and hotel managers they were asked to give an account of how their arm of the hospitality sector is dealing with the S.O.E. Due to constraints of time, it was not possible to include all stakeholders in investigating coping strategies. Semi structured interviews were used particularly in identifying concerns of benefits and dis-benefits of the SOE. These interviews were back up with media reports and statistics. There were no sector by sector baseline data available to indicate how many people were engaged in each activity prior to the S.O.E which posed difficulties in assessing how many people were affected in each sector. However, interviews with people in each activity gave valuable insight regarding qualitative changes observed in this activity during the S.O.E.

ANALYSIS. According to the honorable Kamla Persad Bessasor Prime minister of the republic of Trinidad and Tobago The occurrence of eleven (11) murders over a seventy-two (72) hours period and the wanton shootings of several other persons without any discernable motives warranted and meet the criteria for the implementation of a state of emergency (SOE). The Constitution of Trinidad and Tobago states that a State of Emergency may be declared by the President of the Republic acting on the advice of the Prime Minister when The security of the country is threatened by war There is a public emergency as a result of an earthquake, hurricane, flood, fire, and outbreak of pestilence, infectious disease or other calamity

If public safety is endangered or about to be endangered or a large part of the community is deprived of supplies services essential to life. (TRINIDAD AND TOBAGO DEFENCE FORCE (TTDF) http://www.ttdf.mil.tt/pdf/Legal%20Information.pdf

The Hospitality and Tourism industry although contributing fewer than five percent of GDP is a major employer and earmarked as a growth area. It is exportable, uses large quantities of labor crucial in stimulating economic activity in our stagnated economy and is a foreign exchange earner. We can't ignore the fact that as an industry, tourism is the fastest and largest growing on the planet and employs more people than any other. I know of no other that can take people whose chief qualification is their capacity for hard work and intention to earn an honest living and give them the opportunity to move forward. It suits our raw materials: namely of physical geography and our people says Nicholas Hardwicke, president of the Tobago Hotel and Tourism Association. Tourism can be used as part of a diversified export and industrial strategy because of its scope for linkages to suppliers. Tourism is one of the primary sectors identified for significant development by the People's Partnership Government for its diversification thrust. The Tourism Development Fund is set at $100 million and is designed to provide a government guarantee which will be accessed by existing establishments and new property developers. The industry is vulnerable to government regulations, including border controls, health and safety, and measures within countries. It is vulnerably to fluctuations, including external events, or changes in the composition of demand. It is therefore no surprise that the SOE is very disruptive to the sector. As early as august 22th 2011 one day after the SOE began, Louanna Chai, executive director of the Trinidad Hotels, Restaurants and Tourism Association (THRTA), stated that the limited
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state of emergency will have a significant impact on visitor perception of T&T at this time. And hoped that the objectives outlined by the Government in declaring a state of emergency are quickly achieved and the country can return to normal Mrs. Chai went on to point out that The industry, has already been struggling to increase its demand from its various markets, experienced very slow growth between 2010 and 2011. One of THRTAs plans is to open T&T to more and new investors, but it hopes the state of emergency does not negatively impact on potential investments. By then after a scant three days hotels were already reporting canceled reservations, American Airlines had cancelled flights and uncertainty was rife. The industry had already been struggling to increase its demand from its various markets after experiencing very slow growth between 2010 and 2011 and THRTAs plans were to open T&T to more and new investors. It was hoped that the state of emergency would not negatively impact on potential investments. "From an international perspective, the SoE conjures up impressions of rioting, anarchy, especially with what's going on in the rest of the world. A lot of international companies have risk assessors who advise them in terms of where to invest and SoE rings all the wrong bells, encouraging people to pull back support," says Nicholas Hardwicke, president of the Tobago Hotel and Tourism Association. 4 THRTAs members had to readjust their work schedules and operational hours. Chai said, Many hotels have had to arrange to have their staff work overnight at the hotels to ensure their operations are efficient. Restaurants and entertainment outlets are also facing significant losses as their operational hours have been reduced to allow their staff to reach home before the 9 pm

curfew. Food and drink suppliers and other support services that usually run multiple shifts have had to restructure their shifts. It should be noted that at this early juncture all indications were for negative impacts on the industry, a point illustrated by Managing director of Kapok Hotel, Diana Cohen-Chan, who stated it would have a definite negative effect. It is going to impact the entire industry,'' 6 The only positive note came from Mrs. Chai who expressed hope that the S.O.E achieves the objectives that Government is seeking and there is resolution soon. "We really need to return our country to normal. The tourism product is on edge as it is. We need a positive image,'' she added. In Tobago which is far more dependent on the hospitability industry, Tourism Secretary Oswald Williams said that the State of Emergency is affecting Tobagos tourism significantly. Anything that affects tourism, impacts on Tobago in such a way, that it wont impact on Trinidad, since Trinidad isnt heavily dependent on Tourism. 8 This after one third of the passengers cancelled on a single air Condor flight. One hundred and twelve tourists from Germany cancelled their vacation to the island because of concerns about the country's State of Emergency. "The average stay of these tourists is ten and a half days and the average expenditure per tourist is US$139 per day. The calculated loss is US$163,464 or TT$1.05 million," The impact of the State of Emergency on Tobago has been more devastating than simply cancellations foreigners are not even considering Tobago as a vacation spot because of safety concerns said Williams. Domestic tourism has also suffered during the State of Emergency, "The Trinidad market has been severely impacted because the curfew meant it was difficult to make boat sailing and flights, and there was a fair amount of confusion whether the curfew applied to Tobago and its coastline. At his own establishment, Seahorse Inn Restaurant and Bar in Black Rock, Tobago,

Hardwick said he must reassure his customers who start getting "fidgety" around half-past eight in the evening. "9 Statistics show that tourist arrivals from Trinidad to Tobago have fallen fourteen percent by both air and sea. The prestigious Ernest and Young (EY) in its analysis of the 2011 budget stated that TT must anticipate a tough and uncompromising global environment, and even take bitter medicine if required. The International Monetary Fund (IMF) said the world is in a dangerous phase, with economic woes in the USA, Europe and the Caribbean. Earnest and Young lamented that tourism in Tobago fell by 60 percent in the past five years. This they stated, may be attributed to a wide range of factors including past incidents of serious crime against tourists, as well as adverse effects to the tourism sector as a result of the global economic recession. EY lamented that tourism sector incentives have not been widely utilized because of the bureaucratic processes of the Government hindering investors seeking to access such benefits as the $100 million tourism fund. The S.O.E surprisingly was not mentioned as a contributing factor to the tourism decline by Earnest and Young. Andrew Sabga, president of the T&T Chamber of Industry and Commerce, while stating the chambers support for the SOE in early November reveled that businesses have lost up to $100 million in revenue since the August 22 declaration of the state of emergency. Broken down as follows: Restaurants and entertainment industry70 per cent losses; Suppliers to restaurants and clubs25 per cent; General15-30 per cent. He said stakeholders in the hospitality industry experienced a significant decline in visitor arrivals. T&T Chamber CEO, Katherine Kumar said: The hospitality industry endured significant losses directly due to the curfew. Also, those employed in that sector were the ones least able to afford any reduction in income.

CONCLUSION The limitation posed by the S.O.E curfew is viewed as a major dis-benfit that holds ominous implications for the economy. The intention of the state of emergency, its attempts in curtailing crime, removing ammunition and drugs from the streets is laudable and it is hoped that it reduces the levels of crimes thereby reestablishing visitor confidence and the willingness to invest. The negative impacts of the S.O.E the Dis benefits are easy to identify they are enveloped by loss of revenue which is estimated at over 70% under this umbrella there are cancellations of flights, cancelled hotel bookings, cancelled car rentals and cancelled restaurant bookings. Leading to overall loss in confidence and perception, real concrete losses. Opposite to this there are abstract future benefits of safety, increased investor confidence, and greater economic activity, hoped for benefits. Only time will tell if the sacrifices called for by the S.O.E were worth the dislocation and discomforts suffered. Table 1 Categories of benefits and dis-benefits Value to community Value to Individual Financial Impacts Nature of benefits and dis-benefits Quality of life Sustainably development Safety Improved incomes No changes in income Decline income

Sample Questioner:

1. In what ways has your company been influenced by the present state of emergency? 2. Would you say that your company has experienced a decrease or increase in its revenues since the declaration of the state of emergency? 3. Has your company found it necessary to reduce its labor force by layoffs or dismissals? 4. What impact has the state of emergency had on the volume of business 5. What impacts has the state of emergency had on your clientele 6. In what specific ways has the S.O.E benefited your company 7. How do you think this S.O.E is likely to impact the economy /society in the long term and the short term 8. Do you think the quantities of drugs and ammunition discovered and removed since the S.O.E would restore investors confidence?

Representative Comments 1. We had to adjust working hours we now have a reduce work week so we can keep our staff members. 2. Unfortunately the restaurant has suffered significantly due to the SOE. The SOE was put in place not long after the opening of the restaurant, damaging our much needed 'new and different' allure. 3. Though the SOE is not an SOE in the true sense it will have an effect on the economy. The economy was suffering before the SOE and it has suffered more due to the SOE. Many businesses are closing down, and far more are barely keeping themselves afloat.
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Revenue is not being made in the country and as such we will suffer greatly in the long term. 4. Our clientele is manly made up of repeat guests and where they are suffering in business as well I believe the curfew with regard to our restaurant has made our guests more understanding, compassionate and knowledgeable of the needs of our staff. 5. Personally I see little benefit to the country, but I am told that persons who live in high crime areas do feel safer, they hear less gang activity at night.

6. The quantity of guns recovered in my opinion does not impact the quantity on the street and I feel it will make little difference where crime is concern. As for the drugs in relation to investors confidence is not clear drugs are considered a major contributor to gang ware which is a deeper social issue that this quick fix approach will not bring any really solutions I suspect it should influence the levels of fare so less drugs on the street we hope will mean less violence.

7. In the long term nothing substantial would have been gained but some political mileage for a "reduction in murders"

8. Last year at this time our hotel had an occupancy of 65% since the announcement of the SOE guest have cancelled and we are expecting that they will continue to do so I do not need to say what this will do to our income and our ability to maintain our current staff I can only hope that the situation changes.

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Reference TRINIDAD AND TOBAGO DEFENCE FORCE (TTDF) http://www.ttdf.mil.tt/pdf/Legal%20Information.pdf Visitor arrivals slide over past five years. By Carla Bridglal Nov 8, 2011 at 10:39 PM <http://www.trinidadexpress.com/business-magazine/ Visitor_arrivals_slide_over_past_five_years-133502573.html Blows for tourism Industry State of Emergency forces cancellations By Julien Neaves Aug 23, 2011 at 11:50 PM ECT <http://www.guardian.co.tt/Blows_for_tourism_industry_State_ofEmergency_forces_cancellations1_133502362.html

Ernst & Young: TT faces tough choices. By SEAN DOUGLAS Thursday, November 3 2011 <http://www.newsday.co.tt/businessday/Ernst&Young_TT_faces_tough_choices.html

Emergency call disrupts tourism sector. By Dixie-Ann Dickson Thursday, 2011-08-25 <http://www.guardian.co.tt/Emergency_call_disrupts_tourism_sector_133502362.html SOE decreased tourist arrivals drastically, so says former Tourism Secretary Thursday, 10 November 2011 16:14 http://www.tobagochannel5.com/neil-wilson-on-soe_111011.html T&T Chamber backs SOE . By Dixie-Ann Dickson Thursday, 2011-11-10 <http://www. guardian.co.tt/T&T_Chamber_backs_SoE_133502662.html

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