Hospitality and the tourism market are notorious for slower periods of business, off-peak seasons and short-lead times. This can have a profound effect on cashflow. So, what can be done to fill these holes and keep businesses afloat during these downturns?
When an operator at a hotel, café, or restaurant is dealing with distressed inventory (i.e. rooms or seats that can’t be sold via the usual cash market), they can turn to alternative non-cash markets such as Bartercard. The inventory can be exchanged for a digital currency known as Trade Dollars which can then be used to purchase goods and services required to operate their business, removing the need for cash.
Bartercard Travel recognises that if the sun sets on an empty room in a hotel or resort, the operator can never realise any value for that room, as rooms are a finite commodity of time-sensitive expiring stock. Of course, the preference would be to get cash for that room, but if that’s not possible, they’ll want to get some value for it rather than it sitting empty. That’s when Bartercard becomes a viable option. Bartercard generates purchasing power which can be used to help with business cashflow and allows the operator to generate incremental cash revenue when guests stay at the property.
Bartercard member, Tata Crocombe, Owner and Managing Director of The Rarotongan Beach Resort & Lagoonarium, Sanctuary Rarotonga and Aitutaki Lagoon Resort & Spa, explains how Bartercard has helped his resort flourish.
Bartercard Member Story: Tata Crocombe of The Rarotongan Beach Resort & Lagoonarium
“The role for us in non-cash markets is primarily in Bartercard selling rooms that would otherwise not be sold by way of their closed-user group of business members. We target Bartercard sales into specific need periods i.e. shoulder and low season and combined with stringent scrutiny of purchasing, Bartercard plays a very important role in converting empty rooms into some form of value. Our target is a maximum of 10% of bookings in the non-cash Bartercard and contra market.”
Make Bartercard a part of your business plan
Using trade exchanges, tourism operators are increasingly trading their distressed inventory to offset consumable business expenses typically paid for with cash. Cash can be preserved and used elsewhere within the business. It doesn’t just stop at funding idle rooms, Bartercard is also used to fund refurbishments, renovations and redevelopment of their properties. Bartercard has also helped Pacific Island accommodation operators recover from emergencies such as natural disasters by facilitating the purchase of re-building materials with trade dollars generated by empty rooms.