MIAMI, Fla. – Citing the unprecedented pressures facing Caribbean hotels and resorts because of the COVID-19 pandemic, the head of the Caribbean Hotel and Tourism Association (CHTA) called on international tour operators which have delayed paying hotels for services to expedite reimbursements.
In a letter to major trade organizations representing tour operators which do business in the Caribbean, CHTA CEO and director general Frank Comito stated 69 percent of hotels report they have not been receiving reimbursements for services provided during the first quarter of 2020. The average amount owed to hotels is $219,000 (US) per hotel, with Comito reporting a number having outstanding amounts in excess of $1 million and one hotel being out-of-pocket $15 million.
Noting the global crisis was threatening the survival of many Caribbean hotels, particularly small- and mid-sized independent properties, Comito called the situation “alarming.”
Acknowledging hotels had been advised to expect reimbursement to take an average of 60 additional days—up to an extra 120 days—from certain tour operators who cited staff shortages, high demand, and reduced cash flow as primary reasons for delays, Comito pointed out, “these payments were made to the tour operator by consumers, often many months in advance, and were to be held in trust for payment to hotels shortly after the delivery of the services.”
Comito requested international tour operator associations help CHTA by reaching out to members and urging they provide payment to Caribbean hotels as soon as possible.
Stressing the interdependence of Caribbean hotels and tour operators, Comito said the association had been a longstanding resource for many tour operators working to develop their Caribbean portfolio.
“Through our B2B marketing efforts, advocacy work, and reach to our 33 member destinations and hundreds of properties, we’ve helped to create an environment which has supported the growth of your members’ business into the region,” he wrote.
Looking to future cooperation, Comito asked the associations to address some tour operators which are considering “one-sided attempts to revise future contracts as they seek new rate and payment terms, already asking for deep discounts which are difficult to provide in an extremely high-cost/low-revenue operating environment.”
The business relationships developed by tour operators with Caribbean hoteliers over many years had been a key to their mutual success, and Comito voiced the hope to maintain and build upon those relationships as the impact of COVID-19 subsides.
“This will require give and take by all parties,” he stated.