Caribbean hotels demand UK operators pay upfront after being left owed millions

Some of the top luxury hotels in the Caribbean could insist that UK tour operators pay for rooms upfront after being left with millions of dollars of unpaid bills during the lockdown.

They say they’re no longer willing to offer credit to tour operators as some – including TUI, Virgin Holidays and Dnata Travel Group in the UK – have yet to pay for guests who stayed during the first quarter of the year, before the pandemic.

The debt could force some hotels to close, according to Frank Comito, CEO of the Caribbean Hotel & Tourism Association (CHTA).

"They [the tour operators] have had the cash in hand but they have opted not to reimburse that cash. We find that a really unfortunate practice," he said during an interview with TravelMole’s Graham McKenzie.

"We think the region has been incredibly loyal to tour operators and they really should be looking out for them."

He claimed some tour operators owed millions to hoteliers in the Caribbean and said that their refusal to pay was ‘causing tremendous hardship’.

Speaking after the interview, Frank said Barbados hotels were leading the way in making pre-payment a condition of future contracts.

While other destinations are keen to follow their lead, Frank said: "This can only be done if there is sufficient scale, along the lines of what Barbados has done where most of the hotels are on board."

He said some of the CHTA’s 1,000 member hotels are close to reaching an ‘arrangement’ with TUI, the biggest UK tour operator with outstanding debt.

In April, Frank revealed that TUI was trying to tie the payment of its bills for the first-quarter to ‘more onerous’ terms and conditions for future contracts, prompting him to write to the operator’s UK MD Andrew Flintham with a request for the company to pay up.

TravelMole understands that the Barbados government has since suggested it will refuse financial support to hotels that offer cedit to tour operators.

A dnata Travel Group spokesperson said in statement to TravelMole: "We regret the points raised in this report and any hardship experienced by dnata Travel Group’s valued suppliers across the Caribbean following the recent unavoidable disruption to our operations and agreements.

"We have resumed normal payment schedules and can assure them that we’re working hard to get through the backlog as quickly as volumes allow.

"We want to thank them for their support for all of our brands, and their continued patience during this exceptional period. We’re committed to maintaining an open dialogue with them, the CHTA and other regional authorities, to develop collaborative solutions for how we work together in the future."

TUI and Virgin have been approached for comment but did not respond at time of publication.

By Linsey McNeill, Editor (UK)