The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading Bahamian hotelier yesterday said resorts were looking at a 5-7 per cent year-over-year room rate increase for the peak 2013 Winter season, adding that it was “premature to ring the Doomsday Bell” over the so-called US ‘fiscal cliff’.

Robert Sands, Baha Mar’s senior vice-president of external and government affairs, told Tribune Business that while bookings for the first five weeks of the New Year were slightly down on previous years, they appeared “a little stronger” than 2012 comparatives for the February-April period.

He added that those three months represented the peak Winter season for the Bahamian hotel/tourism industry, and the forecast combination of occupancy and average daily room rate (ADR) increases “augurs well” for 2013.

Mr Sands, though, acknowledged that the political deadlock in Washington, which could see the US fall off the ‘fiscal cliff’, was “concerning”.

With the US providing 80-85 per cent of the Bahamas’ stopover, land-based tourists, failure to reach agreement on Capitol Hill before the New Year (and there are only four days to go) could unlock a $480 billion tax rise/spending cut package.

That could hit US consumers hard, denting still-fragile confidence and reducing disposable incomes and spending power, none of which would bode well for the Bahamian tourism industry and wider economy.

Still, Mr Sands and other top Bahamian hotel industry executives yesterday downplayed any fears over the ‘fiscal cliff’ impact on the sector, acknowledging that whatever happened was out of their hands.

Most media reports and commentators yesterday suggested that the US falling over the ‘fiscal cliff’ is increasingly likely, but Mr Sands told Tribune Business: “We have to wait and see. We can’t be premature in jumping to any conclusions.

“We have to not be premature in ringing the doomsday bell. We have to wait and see. There is no indication it has had an impact on bookings for the second part of the winter season. The jury is not in yet.

“We’ve already got indications of what bookings are looking like for February, March and April. The first part of the winter season is not as robust as previous years, but the second part if looking strong.”

Mr Sands explained that the ‘first part’ referred to January and the first five weeks of 2013. This is typically the slowest part of the winter season, as travellers head back to school and work following Christmas and the New Year.

While that period was still being impacted by the after-effects of Hurricane Sandy and continued softness in the US economy, Mr Sands said the February-April period, which is “traditionally stronger”, appeared much healthier.

“The bookings are looking better than the first part of the year,” he told Tribune Business, “and a little bit stronger than last year. That is very encouraging. That’s the sort of pattern we like to see, steady, consistent growth - perhaps not in leaps and bounds, but at least it’s going in the right direction. That’s extremely important.

“The first five weeks are being impacted by Hurricane Sandy and slowness of the US economy.”

When it came to Baha Mar’s properties, the Wyndham and the Sheraton, Mr Sands said they were predicted to “be ahead of where we were last year”.

“My conversations with other industry colleagues are that they are in a similar position for the second part of the winter,” he added.

“Hopefully, it will all pan out. Airlift is in place. While improvement in the North American economy is not as robust as anticipated, improvement is still taking place and we think it will manifest itself in some growth over last year.”

Pointing to further optimistic signs, Mr Sands told Tribune Business: “Rates are also improving.

“I would say we’re looking at rates being up 5-7 per cent on last year. When you have the combination of small occupancy increases and average rate increases, that augurs well.”

George Markantonis, Kerzner International (Bahamas) president and managing director, also downplayed and concerns over the US ‘fiscal cliff’ situation.

He told Tribune Business: “This reminds me a little bit of Y2K, which was a fizzle. I’m not anticipating the next day we will have several thousand cancellations of bookings. We’re not paying too much attention to it.”