Leading Grenadian hotelier, Sir Royston Hopkin does not share the views of those pundits that the continuing drop in oil prices on the international market will result in lower airfares in the near future.
Speaking on a local radio station on Monday night, Sir Royston, the Managing Director of the luxurious Spice Island Beach Resort said he believes that the drop in oil prices will not adversely affect airfares but will encourage profitability for those airlines.
He said the airline industry is already in a precarious state and incentives had to be given to get them to fly to certain destinations.
He also said that some of the airlines were forced to go into mergers in order to continue in the business and to salvage their financial situations.
Sir Royston gave examples of some of the mergers that took place over the years.
“Most of the airlines in the world today, the large airlines that serve us were in bankruptcy or bad financial state. You have British Airways merging with Iberia Airlines because both of them were in problems. You had American Airlines that went into bankruptcy, as soon as they came out of the bankruptcy they merged with US Airway”, he said.
“You have Caribbean Airlines, which is losing $145 million US a year. You have LIAT losing over 100 million EC a year, which has to be financed,” added Sir Royston who served for many years on Grenada’s airlift Committee.
He believes that it would be prudent upon the airlines to use the drop in oil prices to help turn around their financial position.
“I would say …in my opinion … the airlines are going to use that difference in the fuel prices not to drop airfares but try to get them back into profitability because unless you are in profitability you would go under and as I’ve said all the larger airlines have had vertical integration which is merging with one another to get the economies upscale,” he said.
According to Sir Royston, the local hoteliers are faced with many challenges but despite all of this, the hotels have been doing good business this year.
“This year I think it’s evident that hotels are doing better, marginally better than the year before. It’s known that Grenada after the end of September had a 17% increase in visitor arrivals – a large percentage of that is due to the opening of Sandals and the operation of Sandals”, he said.
“…In addition, I think overall there have been increases in the other hotels in Grenada and the reason is that since Sandals came to Grenada as I always said it is a win, win, you have more airlift,” he added.
Several local hoteliers have admitted that Grenada as a destination is much known internationally due to the heavy marketing and advertising by Sandals of its prize property on the island – The Sandals/La Source Resort at Point Salines.