Business

BTB, FECTAB see eye to eye on ‘price war’

The Belize Tourism Board agrees with the Federation of Cruise Tourism Association of Belize (FECTAB)’s position that Carnival Cruise Lines recent price changes are dangerous for the industry, BTB Director of Tourism Laura Esquivel-Frampton said Tuesday.
“We agree with FECTAB on this, because it is not good for the local industry,” Frampton explained.
She pointed out that while the regulation that sets the guide-to-tourist ratio would prevent Belizean tour companies from firing employees, it won’t protect employees from suffering wage cuts, as local tour operators start to cut prices for cavetubing and ziplining tours.
According to Frampton, the price slashing is also undervaluing the Belizean tourism product. “Our product is worth far more than what they are now charging,” she said.
The BTB has since written to Carnival Cruise Lines to inquire into their rationale for the move, but are still awaiting the official response.
Frampton, however, was quick to make the point that, under free-trade regulations, Carnival isn’t doing anything illegal by lowering their prices.
“Although the CARICOM Single Market Economy (CSME) has rules against unfair trade practices, Carnival is an American company,” Frampton explained.
As it pertains to Chukka Caribbean, a Jamaican-based tour company that partners with Carnival, she suggested that they may be simply obligated to accept Carnival’s new prices, based on the terms of their partnership agreement.
FECTAB’s President Tom Greenwood, speaking with Reporter this week, explained that the association noticed the price dip for the two activities about a month ago.
On Carnival’s website (www.carnival.com/Activities/Excursion/509063), the price for cave tubing, for example, has been reduced to US$49.99 per child and US$55.99 per adult.
Greenwood said this price change comes in direct competition with what local operators have been charging, forcing some operators to respond by lowering their prices, due to tour cancellations.
“There has been several cancellation of tours with local tour operators, because the tourist, when they see Carnival’s prices, they naturally gravitate towards what seems cheaper,” Greenwood informed.
“Traditionally, our prices for packaged tours for cavetubing and ziplining would have been, on average, $10 or so below the cruise ship’s packaged prices,” he said, adding that he has been informed that the other cruise lines have said that they won’t change their prices.
“It’s only Carnival that’s engaging in this aggressive price war with us.”
He added that he finds it “encouraging that FECTAB and the government are on the same page with this issue, in terms of its potential damage to and undervaluing of the industry.”
Chukka’s Country Manager Valerie Woods told Reporter that although FECTAB often singles them out, the fact is that they don’t set the prices.
“We [Chukka] don’t sell directly to cruise passengers; Cruise Lines can sell at whatever price they choose,” Woods explained.
In reference to the suggestion that the price change can affect the tourism product, Woods said: “If it is that the media is getting statements that the pricing by Carnival is undervaluing the tourism product, it begs the question if that tourism product has been undervalued for many years, because the price is what has been charged by many other operators for many years now.”

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