Hotel room revenue grew by 24 percent
NASSAU, BAHAMAS — The Bahamas’ tourism sector maintained its strong growth momentum in the second quarter, supported by gains in the key stopover visitor segment, the Central Bank has reported.
In its Quarterly Economic Review for the second quarter of 2019, the Central Bank of The Bahamas noted that based on data provided by the Ministry of Tourism, total visitor arrivals strengthened by 16 per cent during the second quarter, when compared to the same period in 2018, outpacing the 5.4 per cent gain recorded in the previous year and the average five-year two per cent expansion.
“The high value-added air segment firmed by 14.5 per cent, following a 12.6 per cent advance a year earlier,” the Central Bank said. “Similarly, the dominant sea passenger component grew by 16.6 per cent, notably higher than the 3 per cent increase in 2018. A disaggregation by major ports of call, showed that total visitors to New Providence strengthened by 18.5 per cent during the review quarter to 1.1 million, vis-a-vis a 5.8 per cent reduction last year.”
The regulator added, “The key air component grew by 18.4 per cent, while sea passengers expanded by 18.6 per cent. Further, visitors to the Family Islands increased by 18.9 per cent to 0.7 million, albeit a slowdown from the 28.4 per cent increase recorded in the previous year, as the growth in sea traffic tapered to 21.3 per cent from 34.4 per cent a year earlier. In contrast, despite an increase in cancellations to one major market due to power outage-related challenges, air arrivals rose by 8.1 per cent, surpassing the preceding year’s 6.6 per cent uptick.”
The Central Bank noted that the Grand Bahama market “continued to face headwinds”, as total arrivals declined by 5 per cent, a reversal from a 9.5 per cent expansion in the prior period, as both air and sea traffic fell by 13.4 per cent and 3.9 per cent, respectively. This was attributed in part to poor weather conditions, which resulted in cruise ship itinerary changes and cancellations.
“Amid the improvement in the key stopover visitor segment of the market, information from the Bahamas Hotel and Tourism Association and the Ministry of Tourism from a sample of large properties in New Providence and Paradise Island, showed an improvement in hotel earnings during the second quarter. Specifically, total room revenue grew by 24 per cent, following a similar gain of 26 per cent a year earlier. Underlying this outturn was a firming in the average hotel occupancy rate by 7.3 percentage points to 75.4 per cent, as the number of room nights sold rose by 14 per cent, albeit a slowdown from the prior year’s 27 per cent expansion. In addition, the average daily room rate (ADR), grew by 8.9 per cent to $261.98, vis-à-vis a 1.5 per cent decline in 2018,” the Central Bank said.
The Central Bank noted that the increasing demand for short-term vacation rentals, particularly in New Providence and the smaller Family Islands, highlighted continued gains in off-resort business.
“Indeed, the latest data from AirDNA1 showed that during the second quarter, the total number of room nights sold strengthened by 39.3 per cent over the same period last year. In terms of the components, bookings for “hotel comparable” and “entire place” listings, rose by 48.6 per cent and 38.5 per cent, respectively. In particular, hotel comparable rentals recorded an average occupancy rate of 50.6 per cent, a gain of 5.2 percentage points over the same period a year earlier; however, the average rental rate decreased by 10.5 per cent to $152.72,” the bank noted.
The record high tourist arrivals is expected to be impacted substantially following Hurricane Dorian, which decimated Grand Bahama and Abaco on September 1-3. Both islands remain in recovery mode with public infrastructure, businesses and homes badly damaged.
While the rest of The Bahamas remains “open for business”, tourism officials noted that they expect a significant decrease of foreign visitors on Grand Bahama and Abaco, which significantly contribute to the country’s tourism product.