The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

TOURISM industry performance "remained weak" through October 2017, it was disclosed yesterday, with hotel room revenues off 7 per cent due to occupancy and rate declines.

The Central Bank of the Bahamas' monthly economic report for November, which disclosed significant October arrivals jumps due to the weak Hurricane Matthew-related comparisons of the year before, noted that key hotel industry indicators for the first 10 months of 2017 were all down.

Using data from the Bahamas Hotel and Tourism Association (BHTA), the Central Bank said: "Total room revenue fell by 7 per cent over the 10-month period, due to declines in both the average occupancy rate, by 4.5 percentage points to 64.8 per cent, and the ADR (average daily room rate), by 2.4 per cent to $234.76.

"Over the first 10 months of the year, tourism inflows remained weak, as visitor arrivals contracted by 3 per cent vis-à-vis a 2.8 per cent uptick in the comparable period of 2016. This reflected declines in both the air and sea segments, by 6.9 per cent and 1.8 per cent, a reversal from gains of 0.9 per cent and 3.4 per cent, respectively, recorded in the prior year."

Much of the decline related to the Grand Lucayan's continued closure, with the Central Bank revealing: "In Grand Bahama, arrivals plunged by 29.9 per cent, amid contractions in both the air and sea segments by 48.6 per cent and 26.5 per cent, respectively.

"Comparatively, visitors to the Family Islands fell by 2.4 per cent, reflecting a fall-off in the dominant cruise segment by 4.8 per cent, overshadowing the 11.7 per cent gain in air arrivals. Further, in New Providence, total visitors firmed by 3.7 per cent, as the 7.7 per cent increase in sea visitors eclipsed the 5.9 per cent fall-off in air tourists." The Central Bank report provided some modest encouragement, disclosing that November data from the Nassau Airport Development Company (NAD) revealed a 4.9 per cent year-over-year increase in international departures from Lynden Pindling International Airport (LPIA).

This compared to the prior year's 0.9 per cent decline, and the regulator added: "In terms of the components, non-US international traffic rebounded by 5.1 per cent from an 8.8 per cent contraction last year, while the growth in US departures quickened to 4.9 per cent from a mere 0.6 per cent in 2016."

October's tourist arrivals data, not surprisingly, showed a 30.2 per cent total increase compared to the prior year's 10.8 per cent decline, with both figures stemming entirely from Hurricane Matthew's impact.

However, the Central Bank added that arrivals were also up by 16.1 per cent when compared to October 2015 numbers, and it suggested there "was the potential for some quickening in the pace of expansion" for the Bahamian economy as a result of this and Baha Mar's full opening.

"Indications are that the domestic economy should maintain its mildly positive growth trajectory over the near-term, with the potential for some quickening in the pace of expansion," it said.

"Notably, tourism output is projected to be supported by the conclusion of the phased opening of the Baha Mar resort in the first half of 2018, while a number of varied-scale foreign investment projects should sustain activity in the construction sector. In this environment, labour market conditions (job creation) are expected to continue to gradually improve."

Turning to the Ministry of Tourism's arrivals data, the Central Bank said: "In terms of the major markets, traffic to Grand Bahama - which was severely impacted by the storm in 2016 - nearly doubled on a yearly basis. This outturn reflected gains in sea and air visitors of 116.8 per cent and 26.8 per cent, compared to reductions of 84.1 per cent and 72.3 per cent, respectively, in the prior year.

"Similarly, Family Island markets firmed by 67.7 per cent, buoyed by gains in cruise and air arrivals, by 72.2 per cent and 32.3 per cent, reversing respective contractions of 30.6 per cent and 14.7 per cent in the previous period.

"In a modest offset, the growth in total visitors to New Providence slowed to 17 per cent, from 21.5 per cent a year earlier, as the gains in sea traffic eased to 16.6 per cent from 40.3 per cent in 2016. However, the air component firmed by 18.9 per cent, a reversal from the 24.7 per cent decline a year earlier."

As for the hotel industry, its October performance also saw a year-over-year improvement in contrast with that for the first 10 months. "Preliminary data from the Bahamas Hotel and Tourism Association showed a 13 per cent increase in estimated room revenues for October, relative to the prior year, supported by a 6.1 percentage point rise in hotel occupancy to 47.9 per cent," the Central Bank said, "although the average daily room rate (ADR) softened by 0.8 per cent to $171.06."

Elsewhere, the Central Bank's outlook for the Bahamian economy, monetary and banking system, and fiscal position was little changed from prior months and the rest of 2017.

"In the fiscal sector, potential improvements in the deficit will continue to hinge on the success of measures to strengthen revenue administration and constrain expenditure growth," it added.

"Modest improvements in banks' credit quality indicators are expected, as institutions ratchet-up efforts to address the high level of non-performing mortgages on their balance sheets. Banks are expected to remain well capitalised, thereby mitigating any financial stability concerns."