The Tribune

By NEIL HARTNELL Tribune Business Editor THE Royal Oasis and Nassau Beach Hotel closures left the Bahamas as the "most exposed destination by far" in the Caribbean when the recession hit, the minister of tourism and aviation yesterday telling Tribune Business this eliminated more than 1,200 mid-priced rooms. Explaining that this blunted the Bahamas' competitive edge during a four-year period when stopover visitors were seeking discounts/deals on room rates, Vincent Vanderpool-Wallace said the loss of both properties meant this nation was "caught on the wrong foot" from 2008 onwards. The result was that the Bahamian hotel sector was largely left with higher-priced properties unable to reduce rates to the same extent, and level, as many Caribbean counterparts, Mr Vanderpool-Wallace said, hence the reason why some regional rivals' arrival statistics were better than this nation's. "The rooms we lost at the Royal Oasis and Nassau Beach Hotel were the leading priced properties," the minister told Tribune Business. "As a result, we got caught on the wrong foot and could not recover because of the loss of entry level rooms. "When the recession hit, we were the most exposed destination by far, because we did not have the same reasonably priced rooms to compete effectively." The 840-room Royal Oasis has yet to re-open almost some eight years after it was closed following damage sustained during Hurricane Frances in 2004. This was despite the property being purchased for $33 million in 2007 by Irish-based real estate developer, Harcourt Developments. Meanwhile, the 400-room Nassau Beach Hotel, located on New Providence's Cable Beach strip was closed to facilitate the $2.6 billion Baha Mar redevelopment. The property is now in the final throes of being completely demolished. Explaining the unforeseen consequences of the loss of their 1,200-plus rooms, at least in the short-term, Mr Vanderpool-Wallace said: "Those 1,200 rooms disappeared at precisely the [point] we needed to deal with the recession. We were caught on the wrong foot when the recession hit." Due to the Bahamas' market position as a relatively high-priced destination, Mr Vanderpool-Wallace said large numbers of Canadian and European stopovers tended to bypass this nation in search of cheaper rates elsewhere in the Caribbean, especially in the likes of Jamaica, Cuba and the Dominican Republic. "We see large number of Canadians fly past us because we do not have the price points they seek. They go to Cuba and the Dominican Republic, and their low priced properties," the minister added. He said it was the same with Europeans, who were constantly seeking all-inclusive, low cost vacations "at price points we can't afford in the Bahamas". The latest 2011 stopover visitor comparatives provided by the Caribbean Tourism Organisation (CTO) place the Bahamas among the minority of nations who suffered a stopover visitor decline last year. For January-October 2011, the Bahamas suffered a 3.7 per cent year-over-year decline in stopovers, with winter arrivals down by 0.6 per cent and summer arrivals off by 5.9 per cent. The only other countries suffering a year-over-year decline in stopover visitors were Dominica, Montserrat, St Lucia, St Maarten and the US Virgin Islands, four of them suffering a greater decline than the Bahamas. Mr Vanderpool-Wallace said the 8 per cent stopover arrivals drop that the Bahamas suffered in January 2011, the greatest decline of any Caribbean nation, stemmed from the fact this nation was "affected disproportionately" by the US north-east winter snowstorms because it was more reliant on this market than anyone else. The Bahamas also saw year-over-year stopover declines in 2011 for March (down 3.5 per cent); May (off 8.1 per cent); June (down 2.4 per cent); July (off 1.2 per cent); August (down 13.8 per cent); and October (off 11.9 per cent). Mr Vanderpool-Wallace said the August decline was caused by the aftermath of Hurricane Irene, together with the loss of 4,000-5,000 visitors who departed before the storm hit. He added that the declines seen in other months likely stemmed from the fact that group business had not returned as anticipated. "March was very likely due to the fact that we had not recovered in terms of group business," Mr Vanderpool-Wallace said. "We saw that come back with a vengeance this year. This March was a special March for us because of the return of group business." The Bahamas' October 2011 performance was likely impacted by the loss of room capacity at Sandals Royal Bahamian and SuperClubs Breezes, while Mr Vanderpool-Wallace said Grand Bahama's hotel industry was impacted by the loss of seaborne stopovers brought in by Discovery Cruise Lines.s "In the Bahamas, we have to look at business destination by destination," Mr Vanderpool-Wallace said. "It's not a single land mass. We have to make sure Exuma is right, Grand Bahama is right and make sure New Providence is right. We have different challenges to other nations." When it came to the Bahamas' stopover performance by source market, its 2011 figures were dragged down by the 5.5 per cent decline in its main source market, the US. Europe was relatively flat at 0.9 per cent down, the growth coming from Canada at 3.1 per cent, and 9.3 per cent from 'other markets' such as Latin America.