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CHTA warns Aruba against limiting all-inclusive development

The Caribbean Hotel & Tourism Association (CHTA) is urging Aruba Prime Minister Michiel Eman to abandon proposed legislation in its present form that would limit and control the growth of the all-inclusive segment of the Aruban hospitality and tourism business.

"Evidence suggests that such legislation, if put into effect, will be counterproductive to the health and growth of the Aruba tourism industry, reversing the progress the destination has made in recent years. CHTA strongly advises against the adoption of the legislation as has been proposed," said Frank Comito, CEO and director general of CHTA.

It has been seen that excessive government interference in free enterprise typically erodes business confidence, increases operating costs, and stifles investment, noted CHTA, adding, "Recognising consumer behaviour patterns, a growing number of traditional EP hotels (European Plan, providing lodging only) are also offering full or limited meal-inclusive packages, enabling these hotels to increase business activity, consequently retaining and growing staff while generating additional revenue for their company and taxes for the Government."

In a letter to the prime minister, CHTA states: "We urge stakeholders from government, the Aruba Hotel and Tourism Association, and other interests to work together to fully assess the AI (all-inclusive) offerings, trends, and positive approaches that can be undertaken to address some of the concerns that underpin the reasoning for introducing the proposed legislation."

CHTA sent this letter to the prime minister in response to concerns about the all-inclusive accommodations sector and the false belief that the economy would benefit through legislation limiting its growth by stand-alone, all-inclusive properties as well as by traditional EP hotels, which are incorporating AI packages into their offering.

The letter from CHTA further states: "We strongly disagree with the premise being advanced and counsel that the reverse effect would occur should the legislation be adopted, ultimately negatively impacting employment levels, the cost and availability of air transportation, and government revenues, while reversing Aruba's enviable growth and positioning in the regional and global tourism arena."

SUPPLY AND DEMAND

CHTA added: "Consumers determine demand and drive supply. The global growth of the AI accommodations sector is being driven by a significant and growing segment of the travelling public, which prefers the AI offering."

CHTA advises that all-inclusive resorts have changed considerably in recent years and now appeal to a vast spectrum of consumers. "The high-spending luxury traveller represents the fastest-growing market segment turning to AIs."

The CHTA report quotes Ernst & Young's 2014 Global Hospitality Insights Report, which cites the changing demographics of market segments, which are attracted to AI resorts at all price points. These include couples, singles, multi-generational families, foodies, health and fitness devotees, honeymooners, active vacationers, millennials, incentive groups, and weddings. It points to the changed and changing nature of AI operators to adjust their product to meet consumer demand.

CHTA adds, "All-inclusive guests spend time and money outside of the hotel property and will spend more if enticed. This particularly pertains to the growing high-end luxury AI guest. Destination stakeholders that recognise this and work together to develop strategies to encourage AI guest spending beyond the property benefit significantly."

The report shows that 60 per cent of guests purchase excursion packages for organised tours and attractions outside of the AI property. Average sale per excursion sold is US$90. 

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