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September 13, 2018
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October 4, 2018

DCSX @ NTC 2018

The Curaçao Tourist Board (“CTB”) along with its industry partners Ministry of Economic Development (“MEO”), Curaçao Hospitality & Tourism Association (“CHATA”), Bureau Telecommunicatie en Post (“BTP”), Curaçao Ports Authority (“CPA”) organized the National Tourism Conference 2018 (“NTC 2018”), which was held on September 26th and 27th, 2018 at the World Trade Center Curaçao.

The Dutch Caribbean Securities Exchange (“DCSX”) had the opportunity to participate in the concurrent session “Vast Opportunities in Tourism – Stimulate Lucrative and Profitable Investment Possibilities?” on September 26, 2018. René Römer, CEO of the DCSX, was the keynote speaker of this session along with panel members, Solange Fingal (“APC”), Raymond Jamanika (“CINEX”), and Leo Rigaud (“Vidanova Bank N.V.”). The session was moderated by Greg Klassen, Tourism Development Strategist Partner at Twenty31 Consulting Inc. from Canada.  Mr. Klassen was the keynote speaker during the lunch break and went thru the several ways of how countries, cities can best finance their tourism branding.

  

During this session, Rene discussed the challenges of creating investment opportunities in the Tourism sector in Curaçao. One of the first challenges we face is changing our thinking from traditional ways of financing to alternative ways of financing. Traditional ways of financing include of course getting a loan from the bank or financing from a pension fund. An example of alternative ways of financing is the issuance of bonds on specific touristic projects. It is for the organization to decide whether these bonds should be marketed with financial institutions as project investors or structure these in such a way that the local and/or international average person can also participate in such bond issuance.

For example, let’s look at who our tourists are and especially how many repeat tourists we have. This class may well be a possible investor in local tourism-related projects. It may well be plausible and possible for the Tourism organization to choose for a bond issuance of say USD20 million where the denomination of each bond is set at USD1,000 or US$ 5,000. The identified return tourist is offered the opportunity to invest a destination that it knows and has obviously appreciated Curaçao. How could we make it attractive for the returning tourist to be interested and receive not only an interest return on its investment? Could one make the bond issuance attractive by partnering with hotels, restaurants, and other stakeholders in order to link other incentives like discounts, special treatment, etc for such return tourist investor?

How does one go about this? You start with creating a prospectus or information memorandum which is nothing more then a somewhat detailed business plan of the project that will include what the project is about, who is running it and how is their expertise/track record, and ultimately a clear “level 101” description on how you plan to reach the offered return on investment. Preparing a prospectus shouldn’t be difficult but know that there are listing advisors on the DCSX that can assist with the preparation of such a prospectus for the issuance of bonds.

Crowd funding is another alternative, especially for smaller businesses to obtain financing. The restaurant “La Cantina” was a local example of this. These were just some example of alternative ways of financing.

Another great example of thinking differently was the recent takeover of several real estate properties in Pietermaai by the Curacao Heritage Fund. All these properties had been leased for several years to businesses with a very direct tourist-related business model. The takeover at Ang 10.5 million was ultimately financed for about 70 % thru the issuance of a bond on the DCSX. A clear sign of appetite by the public to participate in the financing of well-run businesses.

What we need is the courage to look into these and other alternative ways of financing Tourism and a change of mindset. In order to do that, more education is needed for people to understand the importance of Tourism for the economy but also for people to understand how to manage their finances and invest in the local economy.

In addition, we need to give more attention to our young generation that has innovative ideas but don’t have the platform they need to execute those ideas. Much time is taken in analytics in order to determine which section is more profitable or not. With the current disruptive technological advances, this way of thinking is outdated, especially for the Tourism sector.

It is time for action!

  • Start your project. What do you want to do? How do you plan to do it? How will investors get ROI?
  • Choose the right partners to help you. Depending on the type of financing you need there are experts that can help you. If we are talking about a bond issuance specifically, on the DCSX we have our professional listing advisors to help you.
  • Get on the Road. Together with your partners start to promote your projects and get local and international investors interested.

We would like to thank the Curaçao Tourist Board for the opportunity to be one of the keynote speakers and the opportunity to participate in the panel discussions at the National Tourism Conference 2018.

 

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