The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Cabinet minister yesterday said “old school businesses” will find it hard to remain relevant in a rapidly-changing world where services are increasingly the preferred product.

Dionisio D’Aguilar, pictured, minister of tourism and aviation, told Tribune Business that companies reliant on “selling stuff” such as retailers would have “a tough time” making it in an environment where The Bahamas’ visitor base was increasingly focused on finding new experiences.

Urging budding tourism industry entrepreneurs to focus on service-oriented opportunities, Mr D’Aguilar said: “There are a number of business people complaining that their business is not turning around, but the world is a changing place and what was relevant five to ten years ago is not so relevant today.

“So if you are in the business of selling retail and what I call ‘old school’ business, the world is changing. If I had to pick a business I would go into services. People want experiences. There are 6.6m foreign visitors wanting to buy experiences, see something new.

“If you’re business is all about buying stuff, as opposed to buying experiences, you may have a tough time, but if you’re selling a service you likely have a good future. If you’re going into business make sure you pick a business that’s relevant.”

Mr D’Aguilar’s comments came as he described Bahamian tourism as “hotter than it’s ever been”, with the early peak winter tourism season creating increased employment, incomes and business opportunities for Bahamians.

With Nassau/Paradise hotel rooms revenues up 48 percent year-over-year for January, the minister said: “The most important thing is occupancies, because if occupancies are up that translates into more jobs, additional monies in the hands of workers working in those hotels.

“It will inevitably have led to an increase in employment as the hotels could not have absorbed that amount of an increase without increasing the level of employment. It’s led to improved foreign currency reserves and, most important, it continues to buttress the level of optimism in the economy.

“You can never under-estimate how important optimism is to cause increased investment not only by non-Bahamians but Bahamians.... You have increased employment, more money in the hands of Bahamians, which is causing banks to consider lending again now they’ve had a chance to clean up their balance sheets,” Mr D’Aguilar continued.

“All of this contributes to an increase in the amount of hard, cold cash in the hands of Bahamians and causes local businesses to hopefully start to see a turn in their fortunes.”

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.