The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian tourism industry has produced “mixed results” for 2013 to-date, with hotels having increased room rates by almost 5 per cent but suffered a decline in large group business.

Writing in the Bahamas Hotel and Tourism Association’s (BHTA) August newsletter, Stuart Bowe, its president, said that while resorts had largely managed a slight increase in average daily room rates (ADRs), most other key indicators were down year-over-year.

“While some Family Island hotels have reported their best performance since 2007, overall the Bahamas’ tourism industry is showing mixed results, with year-to-date visitor arrivals and room occupancies down over 2012, while average daily rates are up,” Mr Bowe said.

“We expect this trend to continue through the rest of the year.”

Apart from the reduction in large group business, Mr Bowe attributed the year-over-year drops to a combination of reduced airlift; “aggressive marketing and price competition by rival lower-cost Caribbean destinations; high travel costs and a still-struggling US consumer.

Data contained in the BHTA newsletter backed up Mr Bowe’s position, with available room nights and occupied room nights for the entire Bahamas down by 3 per cent and 8.6 per cent, respectively, for the year to end-May 2013.

Over the same period, total hotel occupancies had dropped from 59.8 per cent to 56.4 per cent year-over-year, while total room revenue among properties surveyed was off 4.3 per cent - down from $228.91 million in 2012 to $218.962 million.

Of the five indicators surveyed, only ADR was up year-over-year, standing at $224.01 compared to $214.06 in 2012.

This pattern (only ADR being up year-over-year) for both New Providence and Grand Bahama hotels. For the former, which includes Nassau, available room nights and occupied room nights were down year-over-year by 4 per cent and 8.8 per cent respectively.

Total room revenue for the New Providence hotel properties included in the sample was off 5.3 per cent, down at $186 million compared to $196.425 million the year before.

Average occupancy levels, meanwhile, were down by 3.3 percentage points, standing at 62.5 per cent compared to 65.8 per cent in 2012.

The major bright spot for the Bahamian hotel industry is the Family Islands, where for the year to end-May all indicators were trending positively apart from average occupancy levels, which were down 1.1 percentage points.

But, outshining this, Family island resorts in the sample saw a 7.5 per cent ADR increase to $189.95, while room revenue rose by 8 per cent to $23.104 million compared to $21.395 million in 2012.

Data produced by Smith’s Travel Research showed that the Bahamas largely mirrored Caribbean trends of ADR increases for the 2013 first half.

But, while most other jurisdictions saw increases in occupancy and the critical indicator, Revenue Per Available Room (RevPAR), the Bahamas went backwards on both these statistics compared to 2012 levels.

In particular, on RevPAR, the $177.58 average achieved by the Bahamian hotel industry was almost $6 down on what it earned in 2012.

Still, Mr Bowe largely echoed the thoughts of David Johnson, the Ministry of Tourism’s director-general, who last week told Tribune Business that the hotel and resort industries were enduring a “transition year” for 2013 - and the immediate future looked much brighter.

“The outlook for 2014 is more promising, but is also laden with uncertainty,” Mr Bowe said in the BHTA newsletter, noting that major hotels were reporting a likely upswing in the “all-important” group business next year.

And he added that Genting’s investments in Bimini, including a 350-room hotel, and the re-opening of the Grand Lucayan’s Reef Village as a Blue Diamond Resort should boost the Bahamas’ tourism performance in 2014.

Robert Sands, Baha Mar’s senior vice-president of governmental and external affairs, added that the Bahamian resort industry had avoided room rate increases since the 2008 recession.

But, with operating costs increasing “significantly” over that same period, he indicated to Tribune Business that ADR rises could no longer be held back, although they were “in line” with 2013 global trends.

As for group business, Mr Sands told this newspaper that the Bahamian hotel industry was up against tough year-over-year comparatives, as this segment had almost matched pre-recession levels in 2012.

“Unfortunately, this year we have not had as many large groups, hence the decline in business,” he told Tribune Business.

“Large groups and conventions typically book two-three years out. Baha Mar’s properties are already working on this, and have booked some group business already.

“From what I understand, Atlantis and others are encouraged by the advance group bookings for 2014 and 2015.”