Young Bahamian Entrepreneurs in the tourism industry ...and the revitalisation of The Bahamas as a competitive touristic destination

 

Negotiating With The Gatekeeper: Young Entrepreneurs And Tourism

By Noelle Khalila Nicolls
Tribune242
Nassau, The Bahamas



IF the movements made by a handful of young Bahamian professionals over the past year in tourism are any indication of the entrepreneurial thinking of their counterparts, then there is some hope for the future outlook of tourism in the Bahamas.

 

Entrepreneurs such as Alanna Rogers, Jamie Lewis, Adlai Kerr and Scott Turnquest, owners of tourism startups Tru Bahamian Food Tours, Islandz Tours, and BahamaGo, are breaking barriers in tourism by going head to head with established businesses in nontraditional areas of the business. Their starups are refreshing additions to the product offering, and reflect a break from the tunnel vision way of thinking about tourism in terms of traditional service jobs, foreign direct investment and hotels.

 

The tour business in the Bahamas is not an easy one to get into. Ancient companies such as Majestic Tours, the last of the original travel agents from the days of white-only operators, have an effective monopoly over the key supply chains of visitors. And yet, Majestic Tours only places 19 amongst the 22 sightseeing tours ranked on Trip Advisor for Nassau based activities.

 

In the top spot on the Trip Advisor listing is Tru Bahamian Food Tours, with Islandz Tours following closely behind in the number four spot. As far as Trip Advisor is concerned Majestic Tours is essentially a nobody, despite their relative operational size and level of business experience. Old school business minds with an analogue outlook would not understand the significance of such a ranking. They miss how the Internet acts as a great democratic equalizer in this digital world, particularly for those with Rocky-style ambition and fight.

 

These young entrepreneurs are attempting to solve long-standing problems that the industry has been incapable of solving. The Downtown Nassau Partnership has doled out big dollars to revitalise downtown, focusing in large part on upgrading infrastructure. Their efforts are all well and good, but the creation of new businesses that add value and enhance the downtown Nassau experience could do just as well in the revitalisation efforts.

 

That is what Tru Bahamian Food Tours and Islandz Tours have proven, with Islandz also operating in the merchandising side of the business, with authentic Bahamian souvenirs.

 

Innovation and the expansion of existing products and business services are critical for the revitalisation of the Bahamas as a destination, which is on the decline. Sometimes it seems as though leaders in the business sector are either comfortable or complacent. Either way, it is leading to a lack of improvement and modernisation in our tourism offerings.

 

As far as downtown goes, our city centre is a stale, dry place at night, notwithstanding the few bars and clubs that make an effort. Why haven’t existing businesses figured out a way to make downtown vibrant at night? Why haven’t entrepreneurs seen this need as an opportunity to create new businesses? When the Downtown Nassau Partnership ran its successful bar crawl promotion on the Heineken bus, I immediately wondered why a private group hadn’t made a successful business out of a Nassau at night bar hop.

 

Why haven’t downtown businesses figured out a way to bring more Bahamians downtown? Not all of them are convinced that central to downtown’s success is bringing the city back to life for Bahamians. In fact, there is a night spot off Bay Street that has a notorious reputation for being racist and discriminatory towards black Bahamians. During the recent Goombay Summer festival in Pompey Square, I heard a tourism official say, “It was good, except, not many tourists came out.” Meanwhile, the square was jam-packed with Bahamians, starved for outlets to enjoy downtown.

If businesses are supposed to solve problems, fill needs, serve markets, it seems we are going year to year without innovating solutions and creating products to plug the market gaps; without solving problems and keeping pace with the under-served and emerging markets.

 

The startup BahamaGo is doing just that. It is attempting to solve two critical problems that the Ministry of Tourism with its $80 million annual budget has been unable to do in its more than five decades. So far BahamaGo has had success, not because it has the financial resources to do so, but because it has financial accountability; it has the business motivation combined with passion and drive; and most importantly, it does not have an analogue mind.

 

The reality is most hotels in the Bahamas are in fact small hotels, strung amongst the Family Islands; they are using outdated hotel management tools with no access to the large online travel agencies (OTAs) such as Travelocity and Expedia. This lack of access to OTAs is a major challenge for small hotels, which cannot accept online bookings for their properties, and have no way of offering booking packages that pair airfare and accommodation.

 

Many hotels are using manual ledgers or telepathic room inventory management systems. BahamaGo is an niche OTA created by Bahamian entrepreneurs with technology and finance backgrounds who understand the specific demands and challenges of the local market and are centrally focused on meeting the local needs.

 

Unfortunately, BahamaGo is not only competing against the large OTAs, it is also competing against the Ministry of Tourism (MOT). The MOT is simultaneously pursuing a strategy to solve the same problem, investing big bucks to contract an international company. It is not that the MOT is oblivious to the problems; even though they often take a while, they do act. But it is their action that often undermines entrepreneurial opportunity. And in the long run, the bureaucracy often underserves the market.

 

Small startup businesses in the tourism sector quickly come to learn that the tourism market is not free and open; it has a gate keeper known as the MOT. Large developments, particularly that bring foreign direct investment, need not worry, because the political leadership which sets the tone in tourism always has time for that.

 

A business’ size, bank balance, credit history, experience and level of connections correlate to level of trust that is inherently granted by the gate keeper. The problem for small startups, particularly those put forward by young entrepreneurs, is obvious. They suffer the most having to navigate their own way around the bureaucratic gate keeper.

 

I don’t believe it is intentional, but the MOT is a large bureaucracy that in some instances undermines economic opportunities for small businesses and innovation in the tourism sector. Whereas business is about taking risks, the bureaucracy is about playing it safe (routine processes aimed at protecting the country’s resources and not screwing things up; utilizing public funds in low risk investments); the different modes of being naturally conflict with each other, particularly when it comes to dealing with small businesses.

 

A small business might offer a service that the MOT is willing to pay for, but the MOT will always defer to the company that is perceived to present fewer risks. From a public sector management point of view it makes sense, but we must acknowledge how and when it creates an unsupportive, even anti-competitive environment for small Bahamian businesses.

 

A group of artists and photographers were having a conversation online the other day about Bahamian photographers joining together to create an online stock images website. The discussion was lively and interesting, and when I made my contribution I threw a wrench in the mix. If the MOT operates a free stock images website in partnership with an international stock images company, how could a local company compete? Wouldn’t the MOT’s free service undermine the business efforts of the private group?

 

The MOT has its fingers in many pots, and it often has a possessive like sense of ownership over anything that it is involved in. This posture inevitably becomes the elephant in the room when a private business tries to enter the market.

 

For large players the point is not so relevant, but for young entrepreneurs and small businesses it is critical. At some point, there will have to be a negotiation, whether spoken or unspoken, or some sort of mediation, with the MOT, before the gates of opportunity are fully opened. In the meantime, these businesses are forced to work in spite of the MOT.

 

The events market is a classic area. The MOT is committed to events. However, when the MOT stages an event, it often undermines the capacity of a private business to operate or manage an event in the same market place. On the flip side, if a private individual or company has an event it will not be legitimized as a marketable event to the tourist market unless it has the stamp of approval of the gate keeper.

 

The People to People programme is another example. People to People is a signature MOT programme that pairs visitors with a volunteer Bahamian host to experience Bahamian life and culture. The People to People programme is a successful MOT programme. But, it could also be a great business. The MOT innovated a great product for an important niche sector, but might it not be the time for a Bahamian to pursue it as a private business venture?

 

We must ask the question, what is the MOT really about? Justifying its own existence – its $80 million budget – or supporting a local business market? Shouldn’t we encourage and celebrate the creation of businesses to service areas previously subsided by the MOT? In a thriving tourism market, shouldn’t the MOT theoretically become more and more specialized, because the needs of the market would create viable businesses opportunities that are filled by Bahamian businesses.

 

I am not certain our thinking has reached that level of consciousness. More than likely, if a Bahamian saw an opportunity to create a People to People like business, it would attract resistance from those in tourism responsible for People to People, particularly its founders. And if the MOT was so inclined, it could undermine the business efforts of the private individual.

 

In this respect I sympathise with the civil servants who work at the MOT, because their public service often means missing out on business opportunities. However, their experience in the MOT also creates for them a wealth of knowledge and networks that would be vital assets in business. Instead of normalising career service, I think civil servants should be encouraged to take their experience into the public sector, where they can step out and take on the risks of entrepreneurship.

For all of its shortcomings, there is no question, the MOT has over the years plugged important market gaps with its own innovations, not only in marketing, but also product development. The civil servants who work for the MOT do mean well and they work hard to fulfil the mission of the organisation. In many respects the public/private sector relationship that exists in the tourism industry is something to be celebrated and modelled.

 

But we must not let our pride and good intentions make us blind to our own weaknesses or limitations. From some angles, the enviable relationship between the MOT and the private sector looks incestuous.

 

As the need for product expansion and innovation becomes more and more critical and young entrepreneurs mature, Bahamians are not going to just pass up emerging opportunities. They are going to take risks and start new businesses that defy the logic of the analogue mind. The MOT must examine its role and function in light of this approaching wave.

 

Fundamentally, the MOT has a delicate balance to strike: it must act like a business (for marketing is a core business strategy aimed at achieving business objectives), but it should not be in business. And if its service to the business community is justified in support of big business, then it should also be justified in support of small businesses.

 

I am encouraged by young Bahamian entrepreneurs and I know they will do what is necessary despite the MOT or the wider business environment. There is no question, tourism in the Bahamas is badly in need of product development and modernization and it is the innovators, the young entrepreneurs, small and niche businesses that are the hope for the future.

 

As for the MOT, it if wants to do right by the future, it needs to engage in self-examination and create a way forward that reshapes its relationship with innovators, startups and small businesses, who possess different needs to established and large businesses.

 

The MOT’s challenge is to value and support small and niche businesses; facilitate modernisation in the small business sector; encourage product development, especially through diversification into non-traditional areas of the business; recognize and nourish the talents of true innovators. Fundamentally, the MOT is called to be a facilitator not a gatekeeper; be a partner not a competitor; and to truly support the business of tourism, not merely justify its own existence.

 

• (Noelle Khalila Nicolls is The Tribune’s Features Editor. Follow her on Twitter @explorebahamas. For questions or comments, email nnicolls@tribunemedia.net).

 

September 23, 2013

 

Tribune 242

 

Bahamas Blog International

 

If we are to empower Bahamians in the 21st century Bahamas, creating jobs alone from foreign direct investments and empowering a handful of Bahamians is not the course of action to be taken... ...Bahamians need a government in place that is sensitive to the needs of its people at large... ...Sir Clifford Darling, Sir Randol Fawkes, Sir Milo Butler, Sir Lynden Pindling and Arthur D. Hanna, among others are men who were radicals of their time, understood the needs of the people and fought for majority rule

The Bahamian Dream II

By Arinthia S. Komolafe

The hope and expectation of every parent is to produce offspring who attain higher levels of success than they did.  The genuine desire of each generation should be one that is built around the attainment of higher heights and charting of new territories by successive generations.

The Bahamian Dream was born out of dissatisfaction with a substandard life and discomfort with the status quo.   It is one of deep aspiration, a cherished desire, unique ambition and daring vision of a Bahamas in which the average Bahamian can be all that he/she hopes to be.   It is a dream embedded in the minds of our forefathers and defined by the achievement of feats unimaginable in that era, but conceived in the hearts of our founding fathers.  This dream peaks at the juncture where Bahamians hold their destinies in their own hands and their strength lies in their unity, fortitude and beliefs.

It has afforded Bahamians like myself, born in Farm Road to parents who formed part of the working class at the time, educated in Bain and Grants Town at the Willard Patton Primary and C.R. Walker Secondary schools with opportunities to receive tertiary level education, command decent salaries and become homeowners.   The pursuit of this dream has also encouraged some of us to take risks and become entrepreneurs in spite of the challenges associated with such endeavours – a sacrifice made willingly to provide a better way of life for our children and generations yet unborn.   However, as impressive as this may sound, reality dictates that far too many Bahamians, particularly of my generation, have yet to claim the same testimony.

It appears that the Bahamian Dream is met by roadblocks due to an inability to foster ownership of the economy by a wide cross-sector of Bahamians.   This is ‘the tragedy of the shrinking middle-class and select upper class’ that characterizes the 21st century Bahamas and threatens the very essence and crux of the dream.   There is the accepted fact that there are more educated Bahamians up to post-graduate levels today than there were before, as well as more Bahamian entrepreneurs.   In addition, we acknowledge that The Bahamas has the third highest per capita income in the Western Hemisphere and it can be argued that we enjoy a decent standard of living as a result.  However, one may ask the following questions: Why aren’t we satisfied?   What more do we want?  The reality is that as a people collectively, we are yet to lay hold of the entire dream.  There is still much more to be achieved, more grounds to cover and we owe it to ourselves and future generations not to stop until we have done so.   The dream encourages us not to become complacent or lackadaisical, but to continue pressing until we have witnessed widespread prosperity.   To many this is a utopian outlook and nearly impossible, but I belong to the more optimistic crew of believers who dare to believe that it is possible and at the least, we should attempt to make it possible.

  

Banks and the government

The global economic crisis is real and has impacted us severely.  Atlantis, the country’s largest private employer which has created thousands of jobs for Bahamians and effectively improved the standard of living and quality of life for many, has been plagued with rumors of possible defaults on their obligations which can place thousands of jobs at risk.  There is a rising concern that the inability to bring this matter to a quick resolve can have a negative impact on an already depressed Bahamian economy.  The inability of successive governments to diversify the economy and reduce our vulnerability and dependency on employment by foreign employers has contributed to the catastrophic position that we find ourselves in today.  A robust small-medium sized business sector would have safeguarded to some extent against such possible misfortunes.  We are still waiting on the government to pass legislation concerning SMEs and it is unclear why such an important piece of legislation has not been enacted to date.  In the same manner that we passed vital legislation to save the turtles and the sharks almost overnight to preserve our marine resources, the passage of legislation to make Bahamians more self-sufficient should have been met with equivalent and perhaps more priority.

It is challenging for today’s Bahamians to become entrepreneurs being faced with start-up costs that many of them are unable to meet.  There are insufficient venture capital funds to provide access to seed money and there are limited alternative sources of funding.   Bahamians complain regularly that financial institutions won’t lend them money to start a business, but instead are quick to provide funds to finance the purchase of vehicles, vacations, grocery, furniture, etc.   If this is in fact true and the facts suggest that it is, why do they continue to enjoy our patronage?  After all, they have made millions and billions of dollars which some of them have expatriated back to their home countries or issued in dividends.   We must come together to demand more from these institutions and in the mean time patronize the financial institutions, banks, co-operatives and credit unions that will assist us in achieving the Bahamian Dream and provide more attractive rates and offers based upon the credit risk posed to each customer.   The power rests with the people and this power should be activated to make this dream a reality.

  

Empowering Bahamians

In recent times, the government has made several moves that will delay the economic advancement of the average Bahamian and defer the attainment of the Bahamian Dream.  In addition to the questionable levels of borrowing, the country’s fiscal position forced the government to carry out what was viewed by many as a fire sale of the Bahamas Telecommunications Company (BTC).   The firm was sold to foreigners reportedly under value and the bidding process appears to have been tainted.   A Bureau of Public Enterprise should have been formed to oversee the privatization process to ensure transparency in the bidding process and lack of political interference by politicians who are primarily concerned about the electorate’s and/or special interests’ concerns.   It is worth considering the approach adopted by the U.K. in privatizing its equivalent of BTC about three decades ago.   In 1981, then British Prime Minister Margaret Thatcher’s government announced that her government would be privatizing British Telecommunications (BT), which held the monopoly on telecommunication and informed the public of a program to phase in liberalization of the market prior to the sale.   The irony of this transaction from a Bahamian perspective was that Cable & Wireless, who bought BTC, was the first firm to offer alternative telephone service and receive an operating license through their subsidiary Mercury Communications in this newly liberalized market.   In 1984, legislation was passed empowering the state to sell BT.   In the same year, up to 51 percent of BT shares were sold to “British” private investors.   Legislation was also enacted that enabled BT to be in a position to succeed in the midst of an already established local competition by allowing BT to form joint ventures, expand globally and manufacture its own apparatus.   The remaining government shares were eventually sold in 1991 and 1993.

What Thatcher effectively did was expand the middle class and create wealth for hundreds of thousands of Britons through liberalization and eventual privatization.   Contrasting the U.K.’s approach to the government’s modus operandi in choosing to sell to foreigners, one wonders whether the government is a proponent of the Bahamian Dream or whether it has a vision for its people.   It is little wonder that we are faced today with a tragedy of the shrinking middle class and select upper class.

If we are to empower Bahamians in the 21st century Bahamas, creating jobs alone from foreign direct investments and empowering a handful of Bahamians is not the course of action to be taken.   Bahamians need a government in place that is sensitive to the needs of its people at large.   Sir Clifford Darling, Sir Randol Fawkes, Sir Milo Butler, Sir Lynden Pindling and Arthur D. Hanna, among others are men who were radicals of their time, understood the needs of the people and fought for majority rule.  They denied themselves and swallowed their pride to meet those needs.   That is why, more than half a century later, they are still loved by many Bahamians.  We cannot allow our progress in advancing economically to be retarded.

This generation and future generations will not be satisfied with just a job in the civil service, hotels or banks, which are not owned by Bahamians.   An economy dominated by job seekers, as opposed to job creators, will not experience the rebuilding or expansion of the middle class.   The lack of ownership within The Bahamas’ economy by a broad spectrum of Bahamians fosters job insecurity and impedes the chance for a better way of life thereby choking the Bahamian Dream.

  

•Arinthia S.Komolafe is an attorney-at-law.  Comments can be directed to: arinthia.komolafe@Komolafelaw.com

Jan 26, 2012

thenassauguardian

The Bahamian Dream pt.1