The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A top hotelier yesterday said the Bahamas has lost regional market share to the “pricing disadvantage” created by Caribbean-high utility costs and labour rates that are triple those of rival destinations.

Stuart Bowe, the Bahamas Hotel and Tourism Association’s (BHTA) president, told Tribune Business that this nation’s 2013 market share had also been hit by a year-over-year group business drop.

Responding to Moody’s concerns that the Bahamas’ largest industry has suffered a loss of competitiveness, Mr Bowe conceded: “The Bahamas has lost regional market share in recent years, primarily to the Dominican Republic, Cancun and Cuba.

“Most of the other destinations throughout the Caribbean have lost share or remained constant. Throughout the recession and continuing this past year, the low-cost destinations have seen growth as consumers continue to look for bargain travel.”

Identifying the reasons for the Bahamas’ drop, the BHTA president added: “With labour costs two-three times higher than Spanish-speaking competitors, and utility costs the highest in the region, our competitors have a pricing advantage.

“We have also seen a reduction in room inventory over the past five years, with several hotels closing or downsizing. In 2012 our market share was higher than this past year, primarily due to having more group business.”

Moody’s, in its latest country analysis on the Bahamas, noted that 2012 stopover visitor numbers were still 7 per cent below the pre-recession peak.

And, with stopover visitor numbers down 7.3 per cent year over-over-year for the first eight months of 2013, the rating agency said the Bahamas was continuing to lose market share to cheaper Caribbean rivals.

Drawing on Caribbean Tourism Organisation (CTO) statistics, Moody’s said the Bahamas’ share of total Caribbean stopover visitors had slipped from 10.2 per cent in 2007 to 9.1 per cent in 2010. And this number had fallen even further to just 7.8 per cent in 2013, a loss of 2.4 percentage points share in six years.

Over the same period, the Dominican Republic saw its share of Caribbean stopover visitors grow from 26.6 per cent in 2007 to 27.5 per cent in 2010, and then jump further to 30.2 per cent last year.

Cuba, too, saw a similar pattern of growth, with its Caribbean stopover share increasing from 14.4 per cent in 2007 to 16.9 per cent in 2010, and on to 16.8 per cent in 2013.

Jamaica, regarded as a relative economic basket case, also saw its Caribbean stopover share increase slightly over those six years - from 11.4 per cent in 2007 to 12.1 per cent last year.

“The Bahamas has been losing market share to other Caribbean destinations, and the loss is more pronounced if destinations in Mexico are factored in,” Moody’s warned.

“The erosion of the country’s competitive position explains why tourism revenues have yet to recover to 2007 levels.

“In addition, average daily tourist revenues are down, as hotels and airlines continue to offer discounts to attract consumers. Tourism earnings have been depressed also by shorter visits and lower spending per visitor.”

Mr Bowe told Tribune Business: “The reality is that the Bahamas must find innovative ways to compete based on other differentiators. These include: a renewed focus on customer service delivery in all sectors; improved product offerings like the airport, roads, upgraded facilities; new rooms from Baha Mar; other new properties coming on stream; the steady revitalisation of downtown Nassau.

“These are all positioning us to offer a higher value product. Much has been done, but much more is required from all stakeholders.”

Mr Bowe added that the hotel and tourism industries were projecting “a better 2014, with new and upgraded products, a stronger group business, and continued inroads with sports tourism and religious tourism”.

He said the Nassau Paradise Island Promotion Board was continuing to work with the Ministry of Tourism, the Nassau Airport Development Company, Atlantis and Baha Mar to increase airlift ahead of the latter’s late 2014 opening.

“Our individual and collective marketing strategies, and resolution to previous airline fee concerns, will be important aspects to supporting the additional airlift,” Mr Bowe said.