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Published on Tuesday, May 5, 2020

Pay up or we'll shut down, Caribbean hotels warn UK operators

The Caribbean Hotel & Tourism Association is warning UK operators that if they don't pay up hotels across the region could close down.

CHTA chief Frank Comito claimed many tour operators have yet to pay for services provided earlier this year, before travel ground to a halt.

His association says 69% of hotels are owed payment for services provided in the first quarter of 2020.

Comito said he has written to tour operators' organisations in the UK as well as in the rest of Europe and in Canada and the US warning that the future of some hotels is in doubt unless payments are made quickly.

"We have become alarmed in recent weeks to learn of the extent to which some of your member tour operators are withholding reimbursements to hotels for services which were rendered as early as January and into February and March," Comito wrote.

Hotels are owed an average of $219,000, with several owed more than $1 million.

"One hotel is out-of-pocket $15 million," Comito said, adding that small and mid-sized independent properties are most at risk.

Tour operators have said reimbursement could take 60-120 days longer than normal, citing staff shortages due to stay-at-home restrictions and their own cashflow problems.

The CHTA says it understands the entire industry is experiencing severe financial strain but each company should 'make every effort to expedite their obligation to reimburse Caribbean hotels for services which have been rendered'.

Comito asked international tour operator associations to help by 'reaching out to your member operators who work with the Caribbean urging them to make every effort to expedite their obligation to reimburse Caribbean hotels for services which have been rendered'.

The CHTA chief said he understood the dilemma facing all in the travel industry, but he said money paid by customers 'far in advance' should be passed to hotels as a matter of priority.

Comito also asked travel trade associations to rein in some tour operators considering 'one-sided attempts to revise future contracts as they seek new rate and payment terms, already asking for deep discounts which are difficult to provide in an extremely high-cost/low-revenue operating environment'.

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