The Tribune

By NEIL HARTNELL

Tribune Business Editor

AIR arrivals to the Bahamas are likely to match 2008 pre-recession levels "in six months at the pace we're going", the director-general of tourism said yesterday, telling Tribune Business that the extension of the 'Air Credit' promotion three weeks ago had generated bookings equivalent to almost 6,000 stopover arrivals.

Describing the first eight months of 2008, prior to the Lehman Brothers collapse, as "our best year in quite a while", David Johnson said the Bahamian tourism industry was "very close" to matching those levels, especially on higher yielding stopover arrivals, although more work was required.

He was speaking after Tribune Business obtained Ministry of Tourism data showing that, for January 2012, air arrivals were up 9.9 per cent year-over-year at 89,407, compared to 81,339 in 2010 - a weak comparative, given the snowstorms that impacted travel to the Bahamas from its core US east coast markets.

For January 2012, New Providence air arrivals were ahead 11.8 per cent at 68,308, compared to 61,080 in 2010, while those to Grand Bahama were up 13.1 per cent, albeit at a much lower level of 9,589.

Gary Young, the Ministry of Tourism's director of research and statistics, confirmed to Tribune Business that for the year to end-February 2012, air arrivals were 11 per ahead year-over-year. For March, based on preliminary data, air arrivals/stopovers were up 11.4 per cent on 2011 comparisons, Mr Young added.

All this appears to indicate a steadily improving tourism and hotel industry picture, given the seeming recovery in the all-important air arrivals and stopovers market, the tourists in this segment being the higher yielding big spenders who account for the bulk of annual tourist expenditure.

Yet, distinctly unimpressed, was retired banker Al Jarrett, who disclosed to Tribune Business that data he had obtained from the Ministry of Tourism showed that the Bahamas received 110,909 stopover visitors/air arrivals in February 2012.

While acknowledging that air arrivals levels through the 2012 first quarter to end-March were "9-10 per cent higher than last year", Mr Jarrett argued that they were "about 10.5 per cent lower than in the 2008 first quarter". He said the Bahamas attracted 403,413 air arrivals then.

"They're way behind where they should be if they want to get to that [2008] level," Mr Jarrett, who is an economic adviser/analyst for the Progressive Liberal Party (PLP), told Tribune Business. "While the hotel numbers may be looking good, and better than the first quarter of last year - they were down 7 per cent last year - they're still far away from the pre-recession first quarter.

"Even though airlift increased by 10 per cent this year, in terms of air traffic number of seats, they'd have to have flight occupancy rates of 85-90 per cent to hit pre-recession levels. We've got a long way to go, and 2012 is not as good as you think."

Not surprisingly, Mr Johnson disagreed, telling Tribune Business that the air arrivals and other numbers were "nearer to 2008" than what others were suggesting.

"2008 was our best year in a while. We're very close to 2008 levels, but are not quite there. At the pace we're going, we'll probably be there at pre-recession levels in six months. That's my estimate, and the estimate in the Ministry of Tourism," Mr Johnson said.

Explaining the increase in air arrivals, the tourism director-general told Tribune Business that the Bahamas' cherished group stopover business had "returned to our major properties". Another factor was Freeport.

"We think we've bottomed out in Grand Bahama, and are beginning to show an upturn in airlift in the first quarter," Mr Johnson added. "Overall, in the Family Islands the winter is looking better than last winter. The boating traffic has picked up, increased and rebounded."

While real estate and housing had yet to recover, Mr Johnson said other sectors of the US economy were showing signs of improvement, and consumers seemed to have more money available and better access to credit.

"I think we are seeing better times ahead and the worst is behind us," he told Tribune Business. "We need to make sure fuel costs do not get out of hand, and it looks like they are set to drop back.

"We need a number of things to fall into line to be successful, but the Bahamas is well-positioned with its proximity to the US, and we continue to be very aggressive in stimulating lower cost air travel - although we are doing it artificially."

This refers to the two-tiered Air Credit incentive, one at $400 and $250, depending on length of stay. Noting that the market had "responded very strongly" to the promotion, Mr Johnson said "the individual leisure traveller market surged in terms of bookings" after it was extended three weeks ago.

"We just extended it about three weeks ago, and generated over 2,700 bookings," he added. "That's 2.3 passengers, so it's close to 6,000 passengers. The consumer is still shopping and value conscious, and the Bahamas is still popular if prices are attractive." Under the Air Credit promotion's processes, hotels providing the discounts are ultimately reimbursed by a combination of the Ministry of Tourism and the respective Promotions Boards.

And, with European visitors accounting for just 5-6 per cent of the Bahamas' market, Mr Johnson said this nation was "not reeling" from the slowdown in that continent, unlike southern Caribbean nations that were more reliant on it.