The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The hotel industry's "most robust performance for 12 years", highlighted by January's 48 percent year-over-year room revenue increase, was maintained for the entire 2019 first quarter.

Robert Sands, Baha Mar's senior vice-president of government and external affairs, told Tribune Business yesterday that Nassau/Paradise Island's eye-catching growth was achieved "to the detriment of no one" as all resort properties benefited from January's double-digit rises in occupancies and room nights sold.

With the data confirming that "the rebound in Bahamian tourism is certainly taking place", Mr Sands said the hotel and tourism sector was optimistic that 2019 first quarter trends will persist for the remainder of the year provided this nation - and the Caribbean at large - escape "unwelcome visitors" in the shape of major hurricanes.

He cautioned, though, against reading too much into comparisons with January 2018's figures for Nassau/Paradise Island hotels as "the dynamics" this year in terms of hotel room and product availability - especially at Baha Mar - were much different.

Still, Mr Sands said the latest performance data proved beyond any doubt that there was "momentum" at all resort properties on New Providence, and suggested this was "the first time" since the 2008-2009 recession when the industry had not been impeded by negative factors restraining its development.

"It is difficult to compare 2018 with 2019," the Baha Mar executive said, "but what it [the data] does show is the momentum at all hotels in Nassau/Paradise Island and the fact that the hotels at Baha Mar are more stabilised in their opening after a year.

"Occupancy levels are improving, occupied rooms are improving, rates are improving, and more rooms are online compared to the year before. There were a number of dynamics. What it does show is a level of improvement year-over-year for all hotels and, in no small way, Baha Mar contributed significantly to that increase."

Mr Sands was speaking after the Central Bank of The Bahamas, in its just-released economic developments report for February, revealed that the peak 2019 winter tourism season started with major gains across all major hotel industry performance indicators.

Apart from the near-50 percent increase in Nassau/Paradise Island room revenues, room nights sold and occupancy rates rose year-over-year by 36 percent and 16.9 percentage points, respectively. The latter averaged 69.9 percent for January 2019.

And, besides volume-related improvements, the Central Bank's report showed that yields and pricing power increased despite the greater room inventory supply, with average daily room rates (ADRs) up by 9.4 percent to $265.39 per night.

Describing the figures as evidence of "a strong performance where all Nassau/Paradise Island hotels "showed growth", Mr Sands added: "It's a very positive indicator that the rebound of Bahamian tourism, certainly in New Providence, is taking place to the detriment of no one. Everyone is improving.

"Once you look at the first quarter in totality you'll see that trend continue, and that's all very positive for Bahamian tourism. It continued in January, February and certainly into March - the latter not at the same track - but the positive trend continued.

"The first quarter has certainly been a robust one for The Bahamas, and we're hopeful this trend continues for the rest of the year. The Bahamian hotel industry has not performed as robustly as this for at least 10-12 years, and there have obviously been a number of factors behind that," he continued.

"The denial of new hotel product; we've gone through recessions, gone through hurricanes. This is perhaps the first time where a lot of those elements - touch wood - have not negatively impacted us, and we've begun to see the level of hard work and investment by all hotel brands in the destination.

"I think all these things - improved airlift, the arrival of high-profile brands, customer service elements are up. The Bahamas as a worldwide brand has significant equity, and its closeness to the US, level of advertising in the market to create awareness, low tourism-related crime and the return of group and conventions - all of these things have come together for us, certainly in the first quarter."

Not to mention an improved US economy and consumer confidence, notwithstanding concerns expressed yesterday by Christine Lagarde, the International Monetary Fund (IMF) chief, that there are storm clouds on the horizon as it relates to the world's economic well-being.

The figures thus provide encouraging reading for a Bahamian economy where the hotel industry is the largest private sector employer, and the Government will be hoping that at least some of the revenue rises will trickle down through society sufficiently to cut the persistent double-digit unemployment rate.

Mr Sands, though, conceded that year-over-year comparisons were difficult especially since Baha Mar had yet to open its Rosewood property at this point in 2018, while both its Grand Hyatt and SLS resorts were still gradually ramping up operations and room availability.

"You have to put it in context," he explained. "It's a great improvement over the year before, but the dynamics of what is available now and what was available the year before have to be put into context."

The Baha Mar executive added that the industry continued to drive for increased airlift that opened up new tourism source markets, and which served these and existing hubs more frequently, in an effort to stimulate demand for its greater room inventory.

The Central Bank's report, meanwhile, confirmed that the tourism industry improvement also extended to the fast-growing vacation rental market where room nights booked via Airbnb soared by 20.6 percent in February compared to the prior year.

It added that there were gains in "the entire place and hotel comparable categories" of 17.7 percent and 42.2 percent, respectively, with the average daily room rate (ADR) for the latter category rising by 1.3 percent to $141.39. The ADR for "entire place listings", though, slipped by 1.8 percent to $327.40.

"An analysis of the major markets showed that for February 2019 the number of rental room nights booked in New Providence for hotel comparable and entire place listings rose by 44.8 percent and 18.7 percent, respectively," the Central Bank said. "In contrast, the ADR for entire place listings contracted by 11.1 percent to $257.56, while the hotel comparable ADR edged up by 0.6 percent to $117.51.

"In Grand Bahama, the number of room nights booked for entire place listings declined by 2.7 percent as renters showed a preference for the hotel comparable category, which grew by 54.8 percent. In addition, the ADR for both entire place and hotel comparable listings fell by 17.5 percent and 7.2 percent, respectively, to $156.41 and $92.23.

"Exuma maintained its status as an attractive Family Island destination, as bookings for hotel comparable and entire place listings expanded by 61.8 percent and 45.3 percent, while the ADRs firmed by 12.4 percent to $168.75 and 15.4 percent to $437.10, respectively.

"Similarly, in Abaco, booked nights for hotel comparable listings expanded by 42 percent and the ADR increased by 12.9 percent to $175.15, while the number of room nights sold for entire place listings increased by 14.4 percent. However, the ADR contracted by 15.8 percent to $286.48."

Combining both January and February, the Central Bank added: "Vacation rental trends broadly strengthened over the first two months of 2019, as the total number of room nights booked across the archipelago advanced by 25 percent, reflecting gains in both the hotel comparable (46.1 percent) and entire place (22.2 percent) segments, with the ADR for the former up by 3.1 percent at $141.90 and the latter down, by 1.8 percent, at $328.87."

The regulator's report said Nassau Airport Development Company (NAD) data on passengers transiting through Lynden Pindling International Airport (LPIA) also reflected the strengthening tourism performance, with total departures "net of domestic travellers" up by 26.4 percent for February and 24.1 percent for the first two months.

This compared to a 9.4 percent rise for the first two months, and the Central Bank said: "Indicative of the ongoing economic improvement in the key source market, US tourist traffic firmed comparatively by 30 percent in February, and firmed by 27.1 percent for the year-to-date.

"Among non-US departures, the review month gained by 10.6 percent, sustaining a 10.9 percent boost over the year-to-date."