The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

International analysts are predicting that the Bahamian travel and tourism industry will shrug off the Baha Mar debacle to deliver a $47 million economic output increase in 2016, growing this to $1.889 billion.

The World Travel and Tourism Council (WTTC), the industry’s global advocacy body, is forecasting that the sector’s direct and indirect economic impacts for Bahamas will both expand by 2.6 per cent this year, notwithstanding Baha Mar’s failure to open.

“The direct contribution of travel and tourism to GDP in 2015 was $1.841.9 billion (20.9 per cent of GDP),” the WTTC revealed in its annual analysis of the Bahamian tourism industry’s economic impact. “This is forecast to rise by 2.6 per cent to $1.889 billion in 2016.

“This primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). But it also includes, for example, the activities of the restaurant and leisure industries directly supported by tourism.”

This positive near-term outlook for the Bahamian hotel and tourism industry will provide a much-needed boost for the Christie administration, which has been struggling to facilitate more rapid GDP expansion in the post-recession/Value-Added Tax (VAT) era.

However, the sector, which is the Bahamas’ largest industry, has yet to see any major employment rebound, although the re-opening of properties such as the former Nassau Palm Resort, on West Bay Street, and the imminent unveiling of the Warwick International resort on Paradise Island, will produce some growth.

This is highlighted by the fact that tourism/hotel industry employment in the Bahamas is projected to grow at a slower rate than the sector’s impact during 2016.

“Travel and tourism generated 55,500 jobs directly in 2015 (28.9 per cent of total employment), and this is forecast to grow by 0.6 per cent in 2016 to 56,000 (28.9 per cent of total employment),” the WTTC analysis said.

“This includes employment by hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). It also includes, for example, the activities of the restaurant and leisure industries directly supported by tourists.”

The WTTC, meanwhile, suggested that the medium-term outlook was even more positive, with the industry’s direct economic impact set to grow at an average rate of 3.1 per cent per year over the next decade.

“The direct contribution of travel and tourism to GDP is expected to grow by 3.1 per cent per annum to $2.56 billion (22.9 per cent of GDP) by 2026,” the WTTC said.

As for the industry’s total contribution to Bahamian GDP, which also includes indirect effects from investment, government marketing and promotions, and the ‘supply chain’ impact of purchasing from Bahamas-based vendors, the WTTC said there would be a matching growth rate.

“The total contribution of travel and tourism to GDP (including wider effects from investment, the supply chain and induced income impacts, was $4.129 million in 2015 (46.9 per cent of GDP), and is expected to grow by 2.6 per cent to $4.238 billion (47. per cent of GDP) in 2016.

“It is forecast to rise by 3.1 per cent per annum to $5.725. billion by 2026 (51.3 per cent of GDP).”

However, the outlook for direct tourism industry employment in the next 10 years does not suggest such a fast growth rate.

“By 2026, travel and tourism will account for 65,000 jobs directly, an increase of 1.4 per cent per annum over the next 10 years,” the WTTC predicted.

“The total contribution of travel and tourism to employment (including wider effects from investment, the supply chain and induced income impacts) was 107,000 jobs in 2015 (55.4 per cent of total employment).

“This is forecast to rise by 0.8 per cent in 2016 to 107,500 jobs (55.5 per cent of total employment). By 2026, travel and tourism is forecast to support 125,000 jobs (60.4 per cent of total employment), an increase of 1.5 per cent per annum over the period.“

While positive, the WTTC forecasts suggest that the Bahamian economy is set to become ever-more reliant on tourism to drive economic growth, not less. This is likely to strengthen calls from persons such as Democratic National Alliance (DNA) leader, Branville McCartney, who have consistently argued that the Bahamas needs a more diversified economy.

Still, total tourist arrivals to the Bahamas are projected by the WTTC to grow by almost 800,000 over the next 10 years to hit 2.23 million in 2026 (even, presumably, with Cuba opening up).

“Money spent by foreign visitors to a country (or visitor exports) is a key component of the direct contribution of travel and tourism,” the WTTC study said.

“In 2015, the Bahamas generated $2.538 billion in visitor exports. In 2016, this is expected to grow by 3 per cent and the country is expected to attract 1.539 million international tourist arrivals.

“By 2026, international tourist arrivals are forecast to total 2.230 million, generating expenditure of $3.663 billion, an increase of 3.4 per cent per annum.”

As for industry investment, the WTTC forecast that the Bahamian tourism and hotel industry would grow last year’s $458.1 million by 4.2 per cent in 2016.

Sector investment was forecast to increase by an average 3 per cent annually over the next decade, striking $644.3 million in 2026.

“Travel and tourism’s share of total national investment will rise from 19.1 per cent in 2016 to 20.8 per cent in 2026,” the WTTC said.