The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The tourism industry’s revival has suffered “a body blow” by the continued Atlantis and cruise industry uncertainty, a Cabinet minister has conceded, as commercial travel to the US was yesterday cut-off.

Dionisio D’Aguilar, minister of tourism and aviation, told Tribune Business that The Bahamas’ efforts to restart its major industry had fallen “victim” to the inability of its largest visitor source market to bring the COVID-19 pandemic under control.

Acknowledging that this nation’s fate was “tied hook, line and sinker” to that of the US, which provides 82 percent of its tourist market, Mr D’Aguilar said Atlantis had simply decided it was “too risky” to re-open on July 30 given the ongoing surge in COVID-19 cases in Florida, Texas and other states that provide a significant percentage of its customer base.

The Paradise Island mega resort on Friday opted for “an extended closure” until the health risks subsided, its move coming just days after the US Centres for Disease Control and Prevention (CDC) extended its ‘no sail’ order on the cruise line industry until September 30, 2020.

The final blow to any lingering hopes of a swift tourism recovery was dealt yesterday evening when the prime minister announced the suspension of all commercial flights and passenger vessels between The Bahamas and US, with effect from Wednesday, July 22, in a bid to contain the renewed COVID-19 outbreak on New Providence and Grand Bahama.

“Once again we are a victim of the events that are unfolding in our number one market, which is the US,” Mr D’Aguilar told Tribune Business. “That is not lending itself to further expanding the opening of the tourism sector in The Bahamas given our economic dependency on the US for our foreign visitors.

“We continue to be a victim of what is happening in the US, and our major hotels that rely on that market are unfortunately being impacted by that. Our fate is tied to what happens in the US, and until that gets sorted our largest hotel properties are so concerned they don’t want to risk opening until the US gets a handle on the pandemic.”

Mr D’Aguilar disputed suggestions that The Bahamas was too swift to re-open its borders, especially to US visitors and travel by Bahamians in the other direction, arguing that the country had been seeking to strike “the balance” between the health risks and preventing a total economic collapse.

Acknowledging that many European states, and countries in the southern Caribbean, had chosen to not encourage travel by American tourists, he argued that The Bahamas’ near-total dependence on the US for more than four out of every five visitors meant it “did not have the luxury” to follow their lead at a time when COVID-19 had initially appeared to be contained in its northern neighbour.

“The safest thing to do is nothing,” Mr D’Aguilar said. “At the time when we made the decision [to re-open the borders] in May/June, Florida and Texas were not in the state they are now. As we have said over and over again, we’re trying to get the balance right and adjust as things unfold.

“Everyone can armchair quarterback this decision, but we made one and as events unfold you make adjustments. The key is to make the right decision based on the information you have....

“Clearly, the longer we take to open the tourism sector, the more impactful it is on our economy. Every delay is a body blow. Unfortunately we are in the throes and grip of a worldwide pandemic we cannot control, and that is continuing to have a deteriorating effect on our economy.”

Atlantis, in confirming that it has now abandoned its fifth re-opening date, elected not to give a revised re-opening timeline. However, its website gives an indication of what it is thinking, as it informs potential guests that reservations booked from June 15, 2020, “can be cancelled at no charge up to 72 hours before your scheduled arrival” through to November 20, 2020.

That indicates that the Paradise Island destination resort, widely regarded as the flagship brand and property for The Bahamas, is unlikely to reopen for several months until early fall - and possibly as late as the Thanksgiving holiday. The timing will depend heavily on when The Bahamas’ re-opens its borders to US travel and whether that market has COVID-19 under control.

Audrey Oswell, Atlantis’ president and managing director, said in a weekend message to guests: “As we all adjust to living and operating in our new normal, one thing that continues to prove constant is change.........

“While our resort and incredibly professional team members are prepared and trained to welcome guests and ensure the health, safety and well-being of every individual that walks through our doors, as you are aware, the variables surrounding the COVID-19 virus have not improved. The continuous rise in confirmed COVID-19 cases in many of our key US markets has impacted our decision to reopen.

“From the onset of the pandemic, the health and safety of our team members, guests and community is our highest priority. For this reason, we are extending Atlantis’ closure for the time being. While we are fuelled by the opportunity to welcome our guests back, we believe that remaining closed is in the best interest of public health at this time.”

Ms Oswell said the decision to postpone had “weighed very heavily on our entire Atlantis team”. With Baha Mar, too, not scheduled to re-open until October 2020 at earliest, the move by its Paradise Island rival means that The Bahamas’ two largest resorts and private sector employers will be off-line for at least a further two-and-a-half months if not more.

It will also result in the several thousand Bahamians who would have expected to return to work as part of Atlantis’ phase one re-opening having to remain on home on temporary furlough, resulting in continued pressure on the National Insurance Board (NIB) and government for income support and the payment of benefits.

While the fiscal impact may be minimised to some extent because the Government’s 2020-2021 Budget anticipated no tourism sector revenue contribution until November and the Thanksgiving holiday, the delayed re-opening will also depress purchasing power and disposable income among Atlantis employees.

The ‘ripple effects’ will thus be felt throughout the economy, with the move also likely to undermine what fragile business and investor confidence remain. Many other resorts and companies take their cue from Atlantis, and those which supply products and services to the property, and/or cater to their guests, may now be forced into cost cutting measures that include permanent staff terminations.

However, Friday’s announcement from Atlantis may have made it easier for the Prime Minister to yesterday announce the closure of The Bahamas’ borders to international commercial flights travelling between this nation and the US.

With both Atlantis and Baha Mar closed, along with other prominent properties such as Sandals Royal Bahamian and Club Med, the loss of business and any reputational damage will be minimised - especially since the move is occurring just as The Bahamas enters the slowest part of its tourism season.

“International commercial flights and commercial vessels carrying passengers will not be permitted to enter our borders, except for commercial flights from Canada, the UK, and the European Union. This will come into effect as of Wednesday, July 22, 2020 at midnight,” Dr Hubert Minnis said. “Bahamasair will cease outgoing flights to the United States of America, effective immediately.”

Some may view the suspension as being more about preventing Bahamians travelling to COVID-19 hot-spots in the US. Private aviation, and boaters and yachters, will still be permitted to enter The Bahamas, which is likely to create some relief for the Family Island economies that have received a much-needed boost from the tourism restart.

Mr D’Aguilar, meanwhile, conceded that the COVID-19 crisis and economic fall-out will last “probably longer than we thought it would”. He added: “Now nobody knows when it’s really going to be over. Everyone thought the summer would be when we get an abatement of the virus, but it seems like it’s spiralled out of control and we have not got to winter yet when people think it will get worse.

“It’s a little disappointing that the situation in the US continues to head in the direction it is, and that is impacting the ability of the tourism sector to bounce back. The bottom line is that until certain states in the US get this pandemic under control, we’re going to continue to suffer sadly. I don’t care what business you’re in right now, you’re going to be impacted.”