The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading tourism executive yesterday said predictions that the industry’s contribution to Bahamian GDP will increase almost 8 per cent this year reinforce the need to ensure it remains “globally competitive against any other destination” post-fiscal reform.

Robert Sands, Baha Mar’s senior vice-president of external and government affairs, told Tribune Business that the World Travel & Tourism Council’s (WTTC) assessment of the industry’s economic impact on this nation showed just how “tourism puts the Bahamas in the world’s spotlight”.

The WTTC’s annual 2014 forecast projected that the travel and tourism industry’s direct contribution to Bahamian gross domestic product (GDP), aided by the likes of Baha Mar and Albany’s expansion, would grow by 7.8 per cent this year.

The WTTC projected that the Bahamian tourism sector’s GDP contribution was set to enjoy a 3.2 per cent annual growth rate over the decade to 2024, increasing from last year’s $1.729 billion to $2.562 billion in that year.

And, while tourism directly supported 53,000 jobs in 2013, the WTTC said this number was expected to grow by 5.8 per cent this year (Baha Mar and other hirings), with sector employment growing at a rate of 1.5 per cent annually over the next decade to hit 65,000 by 2024.

And, more importantly, the WTTC added: “In 2013, the total contribution of travel and tourism to employment, including jobs indirectly supported by the industry, was 54.5 per cent of total employment (102,500 jobs).

“This is expected to rise by 5.4 per cent in 2014 to 108,000 jobs, and rise by 1.5 per cent per annum to 125,000 jobs in 2024 (63.1 per cent of the total).”

The WTTC report provides further evidence to support the notion that the Bahamian economy is set to become ever-more reliant, not less so, on the tourism industry to create the bulk of economic activity and jobs in this nation.

The data will also strengthen the hotel and tourism sector’s position with the Government over Value-Added Tax (VAT), and the need to ensure the already high-cost Bahamas remains price competitive regardless of whatever tax reform option is chosen.

“That speaks precisely to what we have been saying; that the Bahamas must remain competitive,” Mr Sands said, when informed of the WTTC report’s findings. “The fact of the matter is that the statistics point directly to that.

“From a jobs perspective, tourism is the lifeblood of the economy, creating 33 per cent of the jobs in 2012, and almost half of the GDP, 48.4 per cent. In 2015 and beyond, we are going to see new jobs created, with Albany, Atlantis, Baha Mar and Resorts World.

“The important thing is that tourism puts the Bahamas in the world’s spotlight. The Bahamas must remain globally competitive against any other destination. Travel and tourism drives the lion’s share of dollars in this economy.”

When it came to tourism’s total GDP contribution, a measure that includes both the direct and indirect economic impacts, the WTTC said this was expected to grow 7 per cent this year, increasing last year’s $3.898 billion or 46 per cent share.

The industry’s total economic contribution is, according to the WTTC report, set to increase by 3.3 per cent per annum over the next decade to hit $5.75 billion or 53.6 per cent of GDP - more than half the total Bahamian economic output - in 2024.

“Visitor exports are a key component of the direct contribution of travel and tourism,” the WTTC report said. “In 2013, the Bahamas generated $2.42 billion in visitor exports.

“In 2014, this is expected to grow by 8.4 per cent, and the country is expected to attract 1.469 million international tourist arrivals.

“By 2024, international tourist arrivals are forecast to total 2.138 million, generating expenditure of $3.685 billion, an increase of 3.5 per cent per annum.”

Mr Sands, meanwhile, suggested that the Government could generate more than $14 million in extra revenues annually if it ensured the per head cruise passenger departure tax did not drop below $10.

“Our concern is that they have a passenger tax per head, but then have rebates that take them below the $10 figure [usually $7-$8 per head],” he told Tribune Business.

“Incentives are always important, but perhaps incentives should not take them below $10, which means an increase of $3 per person more from the cruise lines. That would be of tremendous assistance to the Government of the Bahamas.”

Given that the Bahamas received 4.7 million cruise passenger visitors in 2013, a $10 departure tax could gross $47 million and result in a revenue increase of $14.1 million.

Elsewhere, the WTTC report added: “Travel and tourism is expected to have attracted capital investment of $487.9 million in 2013. This is expected to rise by 3.8 per cent in 2014, and rise by 3.2 per cent per annum over the next ten years to $693.7 million in 2024.

“Travel and tourism’s share of total national investment will rise from 18.3 per cent in 2014 to 20.3 per cent in 2024.”

Again illustrating tourism’s importance to the Bahamian economy, the WTTC report said the industry accounted for the fifth-highest direct GDP share, and seventh-highest direct employment share, out of 184 economies.

When it indirect impacts were factored in, the Bahamas’ was the world’s 10th most-reliant nation on tourism for GDP growth, and ninth most-reliant for total employment.