Locally Inclusive Hospitality (LIH)

Technology… the right path for Grenada’s tourism-based economy

Updated March 1, 2021

I recently read an insightful article in NOW Grenada titled “Grenada Tourism: Why are we killing the goose?” by Brian Samuel. 

The article essentially argued, correctly, in my view that Grenada’s tourism economy’s future should not be towards a low-end mass-market mega-resort growth agenda. But instead, a higher-end tourism growth model would be optimal. Samuel described projects like the Chinese-backed tourism one at Levera, a pristine beach location to the north of the island; and another at Mount Hartman, which is a pristine National Park, by Range Developments. Those projects are a giant move in the wrong direction Samuel argues. To his point, if one takes the time to examine the global tourism landscape, they’ll see that Samuel’s fundamental thesis makes sense. The projects as described above look to be ill-considered against the backdrop of the current global data and market trends. Such huge projects on a tiny island territory will lead to disastrous environmental outcomes to the natural beauty and ecosystems of Grenada — it will end up “killing the goose.”

The natural environment is what Grenada is known for and why people come here; so, if you destroy it, then what? Regardless of all the apparent supporting evidence, scientific data collection, and the generally negative outlook for mass-market mega-resort growth. The government of Grenada seems to remain raving fans of it no less…? So, amid the transformative events of Covid, which has exponentially sped up the global economy’s digital transformation process, the Grenadian government in its infinite wisdom, has decided to ignore critical factual information???

Covid has shifted the playing field forever, everything has changed now, adaptation and preparing for the new economic reality is the most prudent approach going forward. Grenada must reimagine the tourism economy to find the optimal path forward, which can lead to productivity and prosperity for its people. Most societies reaction to Covid has accelerated an emerging shift in our conventional ways of doing things. However, companies, governments, and communities that are still waiting for things to get back to normal, a return to the old ways, without a clear understanding and preparation for future realities, are essentially setting up for failure.

The Caribbean region, in general, has been independent of colonialism for decades, at that time their economies were dependent through the commodification of agricultural exports. Today close to 40% of the average Caribbean economies are tourism-based – this is what was supposed to sustain the region. However, sustainable tourism in the Caribbean has been elusive. The all-inclusive mass-market resort concept model, in its present construct, is fundamentally designed to captures 100% of the tourist dollar, secure profits for foreign ownership extraction…then pay very low wages to local staff.

Cultural critic, Ian Gregory Strachan, provokes the question in his vehement assessment of tourism, Paradise and Plantation, arguing that “the Caribbean finds itself again coveted for its natural resources – this time, though, not for gold, silver, pearls, tobacco, cotton, or sugar, but sun, sand, and sea.” Although the region might have achieved political independence, the economic dependency is still firmly entrenched through the hierarchical structural mechanisms of a colonial past. Therefore, if tourism-hospitality is the largest economic sector and the mass market all-inclusive models come to dominate it, Grenada’s economy and people become nothing more than a naive source to extract the nation’s wealth through.

This hard reality and challenges exacerbate the dominance and dependence on large foreign corporations that own and operate many of the all-inclusive mass-market products in the region. Included but not limited to hotels and resorts, airlines, tour operators, cruise ships, travel agents, restaurants, service providers — this ecosystem controls local economies and politicians — it controls Grenada. Creating diseconomies of scale further contributing to negative investment into local communities, which adversely impacts the social structures and imbalances of those communities.

There is nothing wrong with foreign investment. Foreign-led investments are how economies grow. However, its applications, efficacy, governance, and transparencies of those investments are key to predicting fair and profitable outcomes — both for community and investors. The lack of inclusion of indigenous business owners, budding entrepreneurs, and stakeholders in the tourism hospitality sector leads to a disproportionate distribution of wealth and power, in the hands of the very few. However, when you have a single-party rule and leader like Keith Mitchell who sells out his people every single day, you can’t help but attract unscrupulous and shady investor characters. This must change! Grenadians must begin to write their own story or others will continue to write it for them.

Locally Inclusive Hospitality (LIH) 

 

The “all-inclusive resorts have replaced plantations; hotels supplanted great houses….” Labour breaks down on racial lines — senior managers are white, and workers are black in the service industry, which is part of the historical legacy of colonialism. Many locals only labour opportunity is in the service industry, remaining stuck with no possibility of advancement to advance to the middle-class. The mass-market all-inclusive is fundamentally a modern nuanced colonial construct, designed to extract wealth…keeping the islands dependent on western nations. This remains in line with the white-supremacy culture plantation-style hierarchical socio-economy structures, which has been alive and well for the last 400 years.

After independence, tourism was touted as the deliverer out of poverty towards economic sustainability. However, this promoted narrative has not evolved into any type of reality. Anthropologist, George Gmelch, describes how tourism fails to have a meaningful economic impact on the islands in his study of the working lives of Caribbean tourism — in Behind The Smile. Gmelch explains how tourism’s effects are measured in “leakage” describing how “the real economic benefits of tourism to a country are not revealed by gross foreign exchange earnings but by what is left over after deducting the amount which stays or returns overseas.” Further, the density factor of large and concentrated all-inclusive resort operations contributes negatively to local environmental ecosystems and biodiversity. The touted economic benefits politicians regularly promote never really materialises. Wealth creation for local business owners and stakeholders, residents, and even increased government tax collection continues to be dramatically insignificant.

Sandals All-inclusive Resorts have come to be known as a “great business,” the top of the all-inclusive pyramid. However, as the real facts are laid out, Sandals’ successes have been driven more through state-sponsored capitalism than anything else. Sandals’ ability to manipulate political leaders to achieve ridiculous tax holidays is fundamentally responsible for a lot of their financial advantages. In Grenada, to date, since the Sandals deal, there has been no economic development beyond the gates of Sandals itself. No meaningful fair wage growth for the service employees, no meaningful senior management advancement for local individuals — no measurable bounce for the middle class. The only economic development that has taken place has been in the pocket of its owner, Butch Stewart. We can’t blame Stewart; he’s a businessman and has a responsibility to get the best deal possible for his enterprise. However, the Government of Grenada negotiates deals like its amateur hour. Leaders become blinded by their utter shameless greed, not recognising that businesses like Sandals need the natural environment, beauty assets of Grenada to succeed. Grenada’s leaders behave desperately instead in negotiations, resulting in runaway bad deals and the people of Grenada become collateral damage. Nevertheless, whether it is Sandals, the Chinese, or others, the narrative is always the same, our political leaders selling out for the money while perfecting incompetence and foolishness.

“To lay, with one hand, the power of the government on the property of the citizen and with the other to bestow it upon favoured individuals to aid private enterprises and build up private fortunes is none the less a robbery…” Samuel Miller.

The very ethos of the mass market all-inclusive calls for the local environs to inevitably suffer. All accommodation, meals, soft drinks, tips, recreational activities, entertainment, and drinks are included in a flat rate cost, disincentivising local expenditures. Guests are not encouraged to get out of their infinity pools while sipping tax-free rum punch to patronise and support our local economy. Close to US$50 billion is spent each year on vacation leisure activities in the Caribbean region, however, how much of that do you think reaches the pockets of local entrepreneurs and communities?

“Most of our tourist and spice market vendors in the market will not benefit. Most of our local restaurants will not benefit. Only a few selected tour operators will benefit, if at all. Instead, land prices will increase, there will be a drain on our water resources (these infinity pools do not come cheap) and our local suppliers will be priced out of the market. Not to mention the thousands of well-educated underemployed or unemployed young adults who will remain so under this acclaimed deal.” (Deal or No Deal: Grenada- Sandals Partnership Debunked, 20 November 2012).

Instead, a more inclusive approach, away from the cheap mass-market resort setting and towards the Independent Boutique Hotel and Villa Rentals (IBHV) vacation experience, represents the future best. Disruption has been brought to the global tourism-hospitality market. The acceleration of innovation and the velocity of this disruption is relentless, Grenada needs to be a part of that disruption too, to prosper in the new world. The IBHV approach represents the ideal inclusive growth opportunity; independent and fragmented properties; the inability of management to acquire capital for technology improvements, and owner/founders who are up in age and looking for palatable exit strategies. This is where the sophisticated investors will see the value, and where the government who can promote and facilitate investment, can stimulate growth and opportunity for all. Further, and of crucial importance, the LIH-IBHV model will also slow the advancing degradation of the true and beautiful Caribbean hospitality product. American-style all-inclusive mass-market resorts controlled by large foreign interests are not the true authentic product offerings travellers want; increasingly, the data is saying that too.

Therefore, at a time of major disruption, a grand opportunity emerges in which Grenada can lead in amassing an impressive and genuine authentic Caribbean collection of hospitality properties, and assets, supported by a technology servicing ecosystem. This endeavour can quietly grow to dominate the Caribbean hospitality space, over the long term. Therefore, the LIH-IBHV model harnesses local hospitality assets and leverages them through an end-to-end all-encompassing intelligent marketing-sales, guest booking and servicing engine, owned by local industry stakeholders. This platform will provide the hospitality service sector, and various related, the ability to onboard their products and services independently online, through the power of a secure eCommerce platform.

The global middle-class “experience-based-travel,” is the key demographic increasingly driving this high growth sector. As demonstrated by the enormous success of Airbnb, the key, however, is in the technology applications—optimal digital platforms overlaying traditional businesses, giving them the engine needed to compete with larger-scale entities. Simply stated, giving locals the necessary tools to leverage the internet, also levels the playing field. The smartphone has become the #1 transaction tool in everyday life, businesses are no longer the sole creator of a brand; it is co-created by consumers through shared experiences and defined by the results of online searches and conversations.

If there is any doubt that the future is now, just take a look at Airbnb, which has now become the defacto largest accommodations company in the world. In 2018 Airbnb acquired “HotelTonight” a last-minute Caribbean market hotel booking site, the latest example of Airbnb’s long-term strategic plan to dominate the global vacation rental market; through unique technology platform applications.

“Working to reimagine travel by building an end-to-end travel platform that combines where you stay, what you do, and how you get there, all in one place. This acquisition will lead Airbnb’s boutique hotel category,” Sam Shank, the company’s founder, and CEO.

If Grenada and the greater Caribbean region does not get its head in the game, a new and financially penetrating version colonialism, dominated by technology will set upon Grenada, extracting wealth like never before.

The new Caribbean centric and inclusive LIH model allows for leveraging the trending explosive growth for “culture and experience-based” travel demand. According to the Expedia Group, “rich experiences” travel continues to be the highest trending vacation request, with a 40% growth rate in 2019 alone. Even the cheap mass-market all-inclusive resorts are losing out, and fast! Travellers from low end to high end are now accessing technology to seek out authentic vacation experiences, at reasonable prices, all from their smartphone. In February 2020, right before Covid hit, a survey commissioned by Airbnb showed that 57% of travellers plan and prefer to spend their money on experience-based travel, and 37% plan to increase their spending on experiences in 2020, particularly women (39%) and young adults (Gen Z (46%), millennials (48%). Stepping into the shoes of locals is a favourite way to get to know a destination and culture (32% of Americans would most like to learn about history and culture in 2020.) Experiences have increased 271% in supply in the last year, and in 2020, trending us up 116% in bookings by global travellers, with even stronger interest among Gen Z (up 176%) and millennials (up 118%.)

In short, the report highlights that travellers do not want to be cooped up in a petri-dish all-inclusive resort, unable to socially distance, eating bad food, and experiencing non-authentic entertainment. Instead, LIH-IBHV allows for the authentic experience: authentic cuisine, culture, activities, festivals, entertainment, and simple enjoyment of the natural beauty of the destination they’ve carefully selected.

The report concludes that no matter how deep the pockets or wide the age gap, it finds that the mass market mega-resort domain, is very unlikely not to be a growth area in the future. Deloitte’s Insights report in May 2020; points to 72% of all travellers feeling that health and safety concerns are top of mind when it comes to travel/vacation decisions. Further, the report also points out that “private accommodations” requests are being searched for increasingly, giving support and relevance for the LIH-IBHV agenda. The report’s travel trends analysis paints a future where successful travel hospitality destinations will be the ones that can leverage key technologies, including Artificial Intelligence, to their competitive advantages. The question for Grenada becomes, from an LIH tourism perspective — where is the leadership, infrastructure, strategy, and plan of action required to facilitate online sales/bookings, payments—a robust eCommerce platform agenda. Is the government going to lead or not through policy and technology infrastructure investment? Grenada’s economy and future prosperity depend on the answer to that question above; and fast!

“It’s also been a remarkable decade for travel tech. Digital innovation helped form a lattice for entirely new segments to not only enter the market — but thrive. Some private accommodation and ride-hailing brands just finding their legs in 2009 already sit side by side with the titans of travel.” Deloitte, 2019 Travel and Hospitality Industry Outlook.

The LIH-IBHV vacation supply-side economy must see significant investment very soon and the supply-side infrastructure is ramped up immediately, to capitalise on the expanding demand. Otherwise, other islands or regions around the world will get it done. The government of Grenada has absolutely no plan, strategy, or even a clue about economic growth in the new digital era. Building backward with an old economy mindset, praying for pre-Covid normality, burying your heads in the warm beach sand. It is not a plan. Instead, it’s a sure setup for a precipitating socioeconomic decline of a nation, and it’s economy!

When the data/evidence shows so clearly that the future of tourism-based economies around the world depends on digital technologies. And with the data and intelligence pointing to a digital-centric build, why would a declining mass-market resort product like the Levera project, be so promoted by the government? Why do they not adhere to a basic principle in economics — the law of supply and demand? — continuing instead to promote a narrative of investment towards a market showing negative growth? These are all questions and considerations that the Grenadian people must demand serious answers to from their government. A blueprint for the future prosperity of this nation is urgent. Grenada cannot be left out of the global prosperity pie any longer.

Decentralisation and Digital Transformation. The Future is NOW! 

Again, Caribbean nations more than welcome and encourage foreign investment. It is fundamentally and essential for long-term sustainable growth. Today, more than ever before, due to the rise of the digital economy, foreign capital is critical to build a thriving economy. However, the investments must not solely benefit the investor (or politicians) alone; it must benefit local communities as well. An inclusive approach is good for all sides and promotes a stable, non-corrupt political environment, which is exactly what attracts foreign capital.

The truth of the matter is, with very few exceptions, Caribbean companies, indeed whole industries, like tourism and agriculture have been extremely slow to assimilate the real difference the internet and related digital technologies are making around the world. This lack of preparation, facilitation, innovative policy, and basic lack of leadership from government, has allowed Covid to shine a bright light on many failures. Pre-Covid, much of the Caribbean existed in an old legacy system of centralisation, a manual existence if you will. Centralisation is a choice however, not an inevitability or necessity. Therefore, how one prepares and deals with the new digital reality will determine the arc of their prosperity. For this same reason, it is important to take a holistic socio-economic view of the future — a bold visionary build forward strategy is required. Where Grenada stands right now, however, without any real go-forward plan, the more likely scenario is that Grenada will be left behind, unless leadership is found.

In the pandemic era, health and safety will be of paramount importance in decision making, particularly when it comes to travel. People have determined that it’s just not worth risking their lives for an overseas vacation. Furthermore, with the data showing the rise of the experience-based vacation and the demise of the cheap low-end mass-market traveller, now is the time to execute a digital architecture strategy that is inclusive and bold!

The fact is, increasing numbers of consumers and business customers around the world are continuing to choose eCommerce, and increasing diverse types of services too, including medical, are being demanded more to be delivered virtually. A virtual healthcare application linked to tourism, for example, can address travel health and safety concerns relevant to the Caribbean tourism sector. Access to health care information, quality and dependable treatment locations or doctors, insurance payment ecosystems, even the set-up of top medical procedures and cosmetic surgery can be set into the tourism ecosystem. But it won’t happen if the world does not see transparency, regulation, governance, and the necessary virtual technology platform infrastructure to build confidence upon. If 72% of travellers surveyed, according to Deloitte, put health and safety as a top priority, it would seem only logical or make good business sense, to undertake at the very least, serious consideration towards building virtual healthcare services into a broader tourism services ecosystem?

The clear opportunity in this extant era of global socio-economic transitioning to the digital economy is the opportunity for the region to diversify and deepen the economic structure of its economies. To diversify and build forward with technology platform architecture that supports the digital acceleration of all sectors, including tourism, healthcare, agriculture, and information technology, being the most critical ones. If this critical juncture of transcending opportunity is missed, history shows, like in other periods of great technological transition before, could set the region back behind the prosperity curve, for another 100 years.

“World inequality today exists because during the 19th and 20th centuries some nations were able to take advantage of the Industrial Revolution and technologies and methods of organisation that it brought while others are unable to do so. Technological change is only one of the engines of prosperity, but it is perhaps the most critical one.” (Why Nations Fail, 271) 

Disadvantaged countries around the world have been hit the hardest by Covid. For a resilient and sustainable come back, Grenada, and the greater Caribbean region for that matter cannot spend its time lamenting about returning to the old economy. That no longer exists. It is gone now; for good!!!

Economics is not a morality play and there are going to be winners and losers. However, Grenada can avoid the narrative of the loser, if leaders decide to lead. There are no guarantees that the strategies presented will prevail, but if we do nothing, we are guaranteed nothing in return. The future growth of Grenada like elsewhere in the world today, rests on the firm application of intelligent and advanced technologies, for those economies to thrive in the digital era.

Famous Chinese General and strategist, Sun Tzu, in his writings (544 BC) wrote about great leadership and societal progression, saying that “The good fighters fight old systems by using new methods and technologies” and most importantly focus on putting their societies first, “beyond the possibility of defeat.” For Grenada to succeed in the digital era, we must have a vision and proper leadership in place, which can lead through inclusiveness, putting the interest of the people first, beyond anything else!