Not going to sit here and fret, stress over recession says Richard Wallace

Not going to sit here and fret, stress over recession says Richard Wallace

Negril Chamber president believes we have to plan for those times and manage the ups and downs

Observer Business Writer

Sunday, August 25, 2019

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As speculation continues surrounding a possible upcoming global recession, Richard Wallace, hotelier, entrepreneur, and president of the Negril Chamber of Commerce, believes Jamaica's tourism industry should prepare in a positive, pragmatic way for any possibility.

Fears around the world have risen as economists warn that there are signs a recession is just around the corner. However, this has not come without debate as to whether or not such a crisis will happen. The questions are many. Will it be as severe as the 2008 recession? how will businesses and people be affected on a personal level and how resilient the world's economies are at this moment?

Wallace believes a recession could present various options on how to mitigate its effects and the island's tourism industry must be creative, positive, and proactive in finding different solutions if it comes to that.

“What we can do is look at other markets,” he suggested. “For example, if the recession hits the United States hard, other countries or other markets may not be hit as hard so we could focus our attention there to get business from those areas.”

Wallace made the point that travellers within the United States affected by a slowdown in the economy may opt for closer destinations.

“People staying in the US would be less able to afford a trip to Europe or other far away places like Asia and there are a lot of people who go to those places,” he informed. “So maybe instead of going to Asia or Europe they may say let's go somewhere cheaper, let's go somewhere closer like the Caribbean”.

“In times of recession you can also look to the local market, do discounts and whatever it takes to attract local business,” he added.

One of the characteristics of a recession is decreased spending power among consumers. That would translate into decreased spending power among travellers, as well. This means that while hotels may be able to still fill their rooms, related businesses such as gift shops, restaurants, tours, and attractions would suffer because guests would not have the money for extra activities and purchases.

In response to this possibility, Wallace noted that even in the best of times such a scenario is not unknown. Negril, a resort town that has a mix of both all-inclusive and European plan (EP) hotels, is no stranger to this kind of situation.

“That is a factor but that also applies during the slow season as well because during the slow season you have a lot of tourists that have smaller budgets that travel during the slow periods when the rates are lower,” he revealed. “So we are accustomed to that situation where you have tourists in house but they are low spenders.”

Wallace related that in those periods hotels and tourism businesses “reduce costs because you know there are two ways to increase your profit, either increasing your revenue or reducing your cost.”

“As a seasoned business person you have to understand that you have to plan for those times,” he emphasised. That is part of running a successful business and managing the ups and downs. You just have to prepare for them and mitigate as much as you can.”

In light of the speculation among economists regarding the extent or scope of a possible recession and whether or not it is inevitable, Wallace is not willing to give in to unnecessary negativity.

“I am very positive and I am not going to sit here and fret and stress over it and worry,” he insisted. “I am not being naive or careless but at the same time you do what you can do, prepare and hope for the best and expect the worst”.

“I believe that Jamaica is a sufficiently strong destination that we will survive and come out on the other side looking good,” he added with confidence.

Wallace indicated that his views were strictly his personal opinions and that the Negril Chamber of Commerce and businesses in Negril have not officially met to discuss the possibility of a recession.

The Negril businessman is the owner of The Boardwalk Shopping Village and the Boardwalk Village Resort and Hotel on Norman Manley Boulevard in the western resort town. The Wallace family also owns Jungle Nightclub in Negril and the Negril Escape Hotel (formerly Mariner's Inn).

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