Caribbean Tourism Investment Fund
In May 2007, Peter J. Odle, President of CHTA, announced the engagement of KPMG and Caribbean Financial Services Corporation (CFSC) as advisors to a Tourism Investment Fund (the Fund) that CHTA is seeking to introduce to the market, to help fill a "financing gap" in the regional tourism industry.
The financing gap is primarily defined as being limited access to third-party equity and financing for owner-operators of resorts up to 150 rooms looking to expand, renovate, and/or takeover underperforming assets.
The Fund would support applications evidencing strong management teams with a proven track record and a robust business plan. The next stage in the development of the Fund were to appoint an investment advisory board and to agree on a framework for the Fund. Both steps have now been completed.
At a panel discussion during the Caribbean Hotel and Tourism Investment Conference, held in Curaçao, chaired by Peter Odle and featuring Gary Brough, head of KPMG's regional hospitality group, and Milton Lawrence, Deputy Chairman of CFSC, Odle stressed the importance to the regional hospitality industry of indigenous entrepreneurs participating in its development.
Stressing that no region in the world is more dependent on tourism than the Caribbean, Brough pointed out that such dependency is not likely to change at any time in the foreseeable future. "If anything, the region will become more dependent on tourism as traditional industries, such as sugar and bananas, decline," he added.
Accordingly, Brough suggested that if an opportunity arises to improve the region's tourism industry, it should be taken.
CHTA has identified one such opportunity with the introduction of the Fund. Brough added that should the Fund be successful, it would mean more successful indigenous Caribbean entrepreneurs - a very attractive feature of the engagement for KPMG.
However, he warned that a failed fund would benefit no-one and that its success or failure would be judged in the marketplace as being dependent on whether or not the Fund achieved commercial rates of return for its investors.
Emphasizing this point, Lawrence made it clear that the Fund would not make decisions based on philanthropy, but would judge every application on its relative merits and taking an entirely objective, commercial approach when reviewing applications.
However, he pointed out that through its involvement in the Fund, CFSC will extend to the industry the benefit of its close working relationship with a network of technical support organizations, which may independently help investees to mitigate some of the existing challenges in the sector.
Partnership with FirstCaribbean International Bank
With an estimated 1.3 million people working in the tourism industry in the Caribbean it is expected that an initiative such as this - granting special rates to hotel workers - should greatly facilitate the progress of the region's people as they access financing to pursue their dreams and goals.
In January 2005, FirstCaribbean International Bank and CHTA signed a strategic partnership agreement to work together that, among other things, provides hotel workers across the region with special concessions on loans and mortgages.
Furthermore, FirstCaribbean has also agreed to fund research done by CHTA. As a financial institution, the Bank values timely and accurate information both for an understanding of present realities, as well as to forecast future trends.
The findings of any research undertaken by CHTA should not only help that organization in its planning but provide the Bank with information on an industry that is the main economic plank in most of the territories in which it operates.
Under the agreement, which, in part, should facilitate the development of programs to benefit CHTA member hotels, the association will also make FirstCaribbean International Bank its official bank.
FirstCaribbean is a result of the combination of two complementary and leading financial services businesses in the Caribbean - CIBC West Indies Holdings Limited and Barclays Bank PLC - with the aim of offering its customers enhanced products and improved and extended access to banking services.
FirstCaribbean focuses on the needs of the businesses and people of the Caribbean while delivering the global reach of its founding institutions. FirstCaribbean is the largest locally listed bank in the Caribbean based on market capitalization, with some US $9 billion in assets, 3,300 staff and over 700,000 accounts. More information about FirstCaribbean can be found at: www.firstcaribbeanbank.com
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