The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas could endure tourism volumes up to 75 percent below last year's record-breaking 7.2m visitors "through 2021", the Inter-American Development Bank (IDB) warned yesterday.

The multilateral lender, in its latest Caribbean Quarterly Bulletin, said data measuring year-over-year airplane booking search changes showed that this nation and other tourism-dependent Caribbean nations face the prospect of a protracted recovery in their major industry.

"Internet search data suggests that future travel for the rest of 2020 and through 2021 will remain 40 to 75 percent below 2019 levels in Barbados, The Bahamas, and Jamaica," the IDB warned.

"A major caveat, however, is that people might respond with last-minute bookings as health circumstances evolve in both source and destination countries. The response is likely to depend on the evolution and distribution of a vaccine, and a better understanding of how sanitary measures reduce the risk of infection, particularly in airplanes and airports."

The IDB's forecast was backed by Dionisio D'Aguilar, minister of tourism and aviation, who told Tribune Business that tourism was likely to be "a sliver of its former self but certainly better than we're doing now, which is very limited" once 2021 was reached with both Atlantis and Baha Mar having re-opened.

Based on the United Nations' World Tourism Organisation (UNWTO) forecast that travel and tourism is down some 70 percent globally, Mr D'Aguilar said the tourism industry was likely to restart at some 30 percent of its former capacity.

"I think Americans are still willing to travel, but they are being bombarded daily about the state of affairs in their country," he added. "It makes it difficult, but we soldier on."

The IDB report also revealed that the Government is "looking into issuing bonds with a guarantee from the Multilateral Investment Guarantee Agency (MIGA), an arm of the World Bank.

This was first revealed by the International Monetary Fund (IMF) earlier this year, which said: "They [the Bahamas] are also seeking two guarantees from the World Bank’s Multilateral Investment Guarantee Agency (MIGA) for COVID-19 healthcare expenses and capital spending. The associated guaranteed commercial bank loans would have maturities exceeding five years."

Marlon Johnson, the Ministry of Finance’s acting financial secretary, confirmed to Tribune Business that the World Bank guarantees, which would ensure private sector lenders to The Bahamas are repaid, was among the $1.327bn deficit financing options being explored.

“We haven’t finalised the specifics of how we will make use of that facility,” he added. “Yes, we are looking at the MIGA facility as a way to secure private financing on favourable terms. It guarantees lenders will be repaid. It’s being explored to optimise the kind of rates we’re able to get out there in the marketplace."