The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Room rates for Bahamian vacation rentals continue to move in the opposite direction to their hotel industry counterparts, with Airbnb bookings increasing 41 percent year-over-year for August.

The Central Bank of The Bahamas' monthly report for August, released last night, said vacation rentals continued to grow in popularity among stopover visitors with average daily room rates (ADR) jumping by 1.8 percent to $319.77.

Not only is the yield/margins significantly higher, but vacation rental ADRs appear to be going in the opposite directions to comparable hotel listings, which dropped by 3.1 percent to $132.19.

"Indicative of the growing popularity of the short-term private rental market, data from AirDNA showed a 41.2 percent increase in booked listings via the Airbnb platform during August for all Bahamas in comparison to the same period in 2017," the Central Bank said.

"These results are also influenced by the fact that more properties are listing on the site each year. In terms of the broad trends in the major markets, the number of listings in Exuma firmed by 54.7 percent, while gains of 37.8 percent, 34.8 percent and 28 percent were noted for New Providence, the Abacos and Grand Bahama, respectively.

"In terms of the key segments, the ADR for the entire place listings rose by 1.8 percent to $319.77, while that of hotel comparable listings fell by 3.1 percent to $132.19."

The vacation rental market performance was part of a continued improvement in the Bahamian tourism sector, although much of the upswing in stopover visitors, room revenue and room nights sold is likely due to the full opening of Baha Mar earlier this year.

"The ongoing gains in air arrivals translated into an improvement in stopover metrics, as information from the Bahamas Hotel and Tourism Association and the Ministry of Tourism's survey of large hotels showed that total room revenue expanded by 30 percent during the first seven months of 2018," the Central Bank said.

"This outcome was supported by a 26 percent increase in the number of room nights sold, although the growth in overall room capacity led to a 1.3 percentage point reduction in the occupancy rate to 66.9 percent, while the average daily room rate (ADR) rose by $8.75 (3.5 percent) to $255.77."

This corresponded with passenger data from the Lynden Pindling International Airport (LPIA), with the Central Bank adding: "Partial information from the Nassau Airport Development Company (NAD) revealed that the gain in tourist arrivals was sustained during the month of August, as total departures - net of domestic passengers - rose by 11.7 percent relative to a 0.3 percent contraction in the previous year.

"This outturn reflected a 10.6 percent increase in the US segment, compared to a 0.6 percent uptick a year earlier, and a 20 percent expansion in the non-US international component, in contrast to a 6.9 percent decline in the previous year.

"Information compiled over the eight-month period showed similar trends. Total departures grew by 11.8 percent, a reversal from 2017's 1.5 percent reduction, with both US and non-US international departures increasing by 10.9 percent and 17 percent, in comparison to declines of 1.5 percent and 1.7 percent, respectively, a year ago."

On the monetary front, credit extended to the Bahamian private sector fell by $8.3m year-over-year compared to a $5.9m increase the year before, as consumer credit and mortgages fell by $6.9m and $3.1m respectively.

The Central Bank added that any banking industry concerns were mitigated by high levels of bank capitalisation that were double the regulatory target. "Banks' average capital levels - estimated at 33.65 percent in August - are forecasted to remain well above the Central Bank's target and trigger ratios of 17 percent and 14 percent, respectively, thereby mitigating any financial stability concerns," it said.