The Tribune

By NEIL HARTNELL

and YOURI KEMP

Tribune Business Reporters

Atlantis yesterday revealed that normally-buoyant occupancy levels for the peak winter period have fallen to 50 percent as "tourism and commerce grinds to a halt" amid the coronavirus pandemic.

A spokesperson for the Paradise Island-based mega resort told Tribune Business: "While the present occupancy rate is hovering around 50 percent, the current occupancy and any forecast is irrelevant given the fact that circumstances are changing. Our primary focus at this time is the health and safety of our guests and staff."

Atlantis is far from the only Bahamian resort feeling a sharp COVID-19 related decline in business during a peak winter season when it should be enjoying occupancies consistently in the high 80 percent to low 90 percent range, as fearful travellers opt to cancel planned vacations and stay at home, both to avoid infection and to conserve funds.

Graycliff revealed to this newspaper that it has seen a 60 percent booking cancellation rate as the pandemic continues to spread worldwide. Roberta Garzaroli said the cancellations had been split "evenly at 50/50" between the resort and restaurant.

"We've had mostly cancellations for group business, though for now a few have pushed to later date in the year, but that doesn't help in this immediate time," she said. She added that the magnitude of the decline in business compared to the aftermath of previous 21st century economic shocks, such as the September 11 terror attacks and the 2008-2009 global economic recession.

Dionisio D'Aguilar, minister of tourism and aviation, told Tribune Business yesterday that the tourism sector's forward bookings have suffered "a tremendous and significant" decline due to the deepening coronavirus crisis.

This fall-off has gathered pace since Donald Trump announced the US was closing its borders to air traffic from Europe. This was swiftly followed by the cruise line industry's move to shut down for 30 days, with Mr D'Aguilar acknowledging that "tourism and commerce worldwide is grinding to a halt" with The Bahamas not immune from the impact.

"Back-of-the-envelope" calculations by Tribune Business, using arrivals figures from March 2019, give an insight into the potential economic impact from the cruise industry shutdown alone. Some 547,464 cruise passengers visited The Bahamas during that month last year, based on Ministry of Tourism data employed by the Bahamas Hotel and Tourism Association (BHTA).

Multiplying that number by $18, representing the per head departure tax that the Government stands to earn, indicates that the sector's 30-day shutdown will cost the Government some $9.854m from this one revenue stream alone. It does not include all the Value-Added Tax (VAT) that the Public Treasury would also stand to earn from cruise passenger spending.

Using the $70 to $131.95 range, representing the per capita cruise passenger spending figures provided by the Government and cruise industry, respectively, suggests The Bahamas will lose between $38.322m and $72.238m in economic impact due to the shutdown.

Should it be prolonged beyond 30 days, a sector that delivered 5.4m or 75 percent of The Bahamas' total 7.2m visitors in 2019 will be under threat. With tourism accounting for both 50 percent of Bahamian jobs and economic output, the cruise industry closure - combined with the drop-off in stopover visitors - represents a potentially huge blow that will spare no Bahamian or resident.

The Prime Minister, in his national address last night, said "no sector is more at risk" than The Bahamas' number one industry and largest employer as he bemoaned the coronavirus's emergence at a time when the economy is still recovering from the $3.4bn worth of losses and damage inflicted by Hurricane Dorian.

"This coronavirus crisis represents yet another risk to our economy, and the country's finances and fiscal sustainability plans," he affirmed. "This crisis will have a growing adverse impact on confidence, travel and supply chains across the globe. This will affect Bahamian workers and businesses, and will have an impact on the poorer and more vulnerable in our country."

Dr Hubert Minnis said he would be meeting with major businesses and private sector organisations to help develop a strategy on how The Bahamas should respond. "This crisis will have a tremendous and widespread economic impact," he reiterated.

"Tourism accounts for an estimated 50 percent of our gross domestic product; just under 50 percent of direct employment, and has a cascading impact across the broader economy. Another important fact is that over 80 percent of our stopover visitors are from the US, which is reporting increasing cases of the virus, and 75 percent of our visitors come by cruise ships, which are suspending cruises.

"All of these developments signal to us the huge exposure our economy faces from the spread of the virus, which has already began to show up."

K Peter Turnquest, deputy prime minister, could not be reached for comment yesterday on the potential fiscal impact from the coronavirus fall-out. However, one source, speaking on condition of anonymity, said the Ministry of Finance had "provided him with some of the likely scenarios and impacts, and some of the potential policy prescription" for mitigating the effects.

These have to be discussed with Cabinet before being unveiled in the House of Assembly. "We will get a significant impact, but hopefully it will be fairly short-term - a matter of months, not a matter of years," the source said.

"It will be short lived, hopefully. It will be severe, but hopefully will not last too long. It's not what happens but how you respond. The challenge is how do we respond effectively."

Mr D'Aguilar, meanwhile, told Tribune Business of the cruise ship shutdown: "The economic impact, of course, will be tremendous throughout the length and breadth of The Bahamas. It impacts the Government's revenues, employment opportunities, taxi drivers - all of them. The financial impact is quite significant."

As for the sudden plunge in bookings for The Bahamas' more lucrative stopover tourism segment, he added: "I don't think anybody on the planet is thinking about a vacation right now. One anticipates, without looking at the forward booking numbers, a tremendous drop-off."

However, Mr D'Aguilar argued that The Bahamas' proximity to the US meant it was better positioned than most to rapidly rebound from a tourism perspective once the coronavirus crisis has passed. And he added that tourism, and its importance as the country's leading economic growth and jobs creator, needed to take a temporary back seat to the health and well-being of all Bahamians and residents.

"On the other end of the storm, I think The Bahamas is most suited from a speedy recovery for a number of reasons. People don't want to go far and we have proximity a short distance from the US," he said.

"While there will be a tremendous and significant short-term downturn, for any recovery we're well-positioned to take advantage of it. As more and more countries move to isolate themselves from the rest of the world, it's probably something we need to start considering ourselves.

"As we move to protect our citizens, while tourism is our number one industry, that's trumped by the need to protect our citizens and ensuring our health resources are not overwhelmed by foreign visitors to the country. All this comes into play."

Mr D'Aguilar argued that all sectors apart from healthcare were likely to be impacted by the coronavirus, and said of its potential impact: "The only bit of evidence I have is when I was in the private sector and ran Superwash. It took four years to get back to 2008 sales levels after the 2008-2009 recession.

"I think the whole world is grinding to a halt. Everything involved in the movement of people is grinding to a halt. Everyone is running into their home to hunker down. It's not only tourism but commerce in general. Worldwide commerce is going to take a significant hit because of this."