Published On: Mon, Oct 28th, 2013

“It was not your fault,”

Jacob Gelt DekkerCommenting on the recent failures in the hospitality industry of Curacao, I would like to say, "Mea Culpa, It was my fault," but let me tell you first what happened.

1. Trigger incident.

The failure of major clients in the travel and airline industry caused a domino-effect, a chain reaction. If your largest customers suddenly no longer pay what is owed to you, you can no longer pay what is owed to others? This chain reaction will continue for quite a while. The government authorities did not build in a buffer to these kind of events, in spite of endless, years long discussions on the subject. Their lame excuse that government is not the financier of last resort is false, since they certainly forced themselves to be the preferential beneficiary of all businesses with a 50% take on all revenue, no matter what. A government that is only a taker, is no more than a parasite.

2. Turning point.

A series of large armed robberies, "atrakos", and extensive, large fraud by organized crime, over the last twelve months, shocked the hospitality staff, chased away wealthy guests and ruined hotels operations; for most immediate victims, it became impossible to recover. Total inaction, and even ridicule, by Police and Public Prosecutor, their refusal to investigate and prosecute, left all victims behind, shattering their trust and confidence in a society of law and order; they all became out-laws at the mercy of organized crime without any recourse.

3. Causes.

Underlying causes are always far more extensive and complex than trigger incidents. To mention a few:

- Chaotic political situations on Curacao culminating in the assassination of a major political leader. The bad press, world wide, was devastating for tourism and investors, and the absence of political leadership added insults to injuries.

- Lack of airlift and uncontrolled growth of guests accommodations, legal and illegal. Only the government is entitled to create, accept and expand airlift, no other organization in the market has the market muscle, or the legal authority. Over the last years, airlift shrank, whereas accommodations expanded from 3,000 to 5,000 rooms. A shift from luxury hotels to private, uncontrolled and often illegal guests accommodations turned the Curacao market from a luxury destination to a Jack-in-the-Box place. Thousands of private, discount rooms were created, outside control and regulation of construction laws, operating permits, tourists taxes and staff requirements. The authorities in charge did not perform and fulfill their duties, and politics did not grant them an adequate license to take action.

- The strategy of the Curacao Tourist Board of " Curacao, a Luxury destination" failed. When Hyatt walked out on 1 January 2013, it became very clear that the island was not able to deliver the product it promised to its guests; security, service, hospitality and amenities did not live up to the idyllic promise. Education, work ethics and cleanliness of environment could not compete with alternative destinations in the Caribbean.

- The local economy became incompatible with recent, enormous prize hikes in taxes, levies, import duties, energy costs and minimum wages. The cost of doing business became nearly 40% higher than at any competing destination in the Caribbean.

4. What is next?

- In the absence of local leading policy makers, the global markets will decide. Amateur political leaders---often with the very best intentions--- were deceived by their own faulty, politically-colored and uninformed silly analysis, they preferred to ignore all alarm sounds. Self indulgent politicians have no notion, no experience, no initiative and most of all, no time window in order to develop a lasting, longterm strategy.

Fortunately, Curacao is but a very small entity, and will most likely be pulled along by global events, no matter what.

So, it really does not matter.

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