The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The start of tourism’s revival has been “pushed back” beyond the peak winter season, the Central Bank’s governor warned yesterday, with a return to top performance not expected until 2023.

John Rolle, delivering a grim but not surprising outlook as the regulator unveiled its assessment of 2020’s economic performance, said continued COVID-19 outbreaks in The Bahamas’ key tourist source markets amid the wait for a vaccine roll-out meant this nation will be “most significantly challenged” during the 2021 first half and enjoy a minimal full-year recovery from the pandemic.

“Generally speaking, the period that would mark the start of the recovery, it has been pushed back,” he explained. “I would estimate that The Bahamas needs to be patient through at least the first quarter of 2021 on the assumption that countries wrestling with outbreaks will need several weeks in each case to get the outbreaks under control and need time to bring the numbers down.”

While that had started to happen, and progress had been made in distributing COVID-19 vaccines, Mr Rolle added: “We are not yet in a material period of rebound. It’s good there’s some business moving about the sector, for all intents and purposes our analysis and forecasts tend to put us beyond the first quarter of the year, and recently beyond April.

“When you think about that, as the first four months of the year being gone, we are not in any rebound state yet.” The first four months of the calendar year traditionally represent the peak of the winter tourism season, and Mr Rolle warned this would be impossible to replace even if the industry and its key source markets recovered later in 2021.

“If we are not getting any business now, even if we have a strong second half it will not outweigh the foregone business,” he added. The Central Bank governor described 2023 as “an outer point” when tourism’s performance will match or exceed pre-COVID highs in every month, adding that this trend would likely start to emerge in the 2022 second half.

With COVID-19 continuing to weigh heavily on the global economy, Mr Rolle added: “For The Bahamas, this limits the degree of economic strengthening that would be observed in 2021. The most significant upside potential for tourism recovery remains getting the virus under control in North America...

“It is estimated that the economy contracted by at least 16 percent in 2020. For tourism, cruise visitor activity was on pause since mid-March and stopover arrivals are projected to have achieved no more than one-quarter of the levels reached in 2019.

“In the stopover segment, revenue loses have been more severe for the hotel sector than for vacation rental properties because Bahamian residents have made greater use of short-term rentals. Indications are that sales of vacation rentals achieved nearly 50 percent of the 2019 levels, compared to a much weaker result for hotels,” he continued.

“In the outlook, the economy is expected to remain most significantly challenged in the first half of 2021, and begin to show improvement in the second half of the year. The recovery should become much stronger over the course of 2022, at which time the private sector should revert to being a net contributor to growth in the foreign reserves.”

In the meantime, though, total visitor arrivals in November 2020 were down almost 98 percent despite the tourism industry’s soft re-opening at the start of the month. “The most recent data provided by the Ministry of Tourism revealed that total foreign arrivals reduced by 97.9 percent in November, relative to a 7.3 percent growth during the same period in 2019,” the Central Bank reported yesterday.

“Specifically, year-to-date air traffic decreased by 89.4 percent, extending the 12.5 percent fall-off in the prior year. Similarly, sea passengers declined by 99.6 percent, a reversal from the 12.5 percent gain a year earlier.

“A disaggregation by market revealed that total visitors to New Providence matched just 1.6 percent of the prior year’s outturn, amid declines of 99.8 percent and 94.2 percent in the sea and air components, respectively,” the Central Bank added.

“Similarly, total arrivals to Grand Bahama corresponded to 4.2 percent of the previous year’s volumes, as air traffic reached 80.7 percent of last year’s results. For Family Islands, total visitors matched a mere 2.6 percent of the 2019 levels, with air passengers corresponding to 33.1 percent of the preceding year’s levels.”

As for the first 11 months of 2020, the Central Bank added: “On a year-to-date basis, activity remained contracted, as total foreign arrivals fell by 73.1 percent, a turnaround from a 9.9 percent growth in the prior year.

“Contributing to this outturn, air arrivals reduced sharply by 74.5 percent, following an 8.2 percent gain in 2019. Similarly, sea arrivals declined by 72.6 percent, vis-à-vis a 10.4 percent rise last year. “

Turning to traffic through Lynden Pindling International Airport, the Central Bank said “total international departures fell to 21,040 passengers during the month of December, overturning the 9.9 percent increase to 140,633 passengers in 2019”.

It added: “For the year, total foreign departures decreased markedly by 74.2 percent, a reversal from a 12.8 percent growth in the prior year. By market, the US component, which is higher by volume, declined by 75.2 percent, contrasting with a 14 percent improvement last year. Likewise, the non-US international component was lower by 67.8 percent after a 5.7 percent expansion a year earlier.”

Finally, on the vacation rental front, the Central Bank said: “Short-term rental data provided by AirDNA revealed positive activity within the market throughout December, buttressed by domestic demand.

“In particular, compared to 2019, total room nights sold rose by 27 percent although a moderation from the 50.8 percent increase in the prior year as entire place listings and hotel comparable accommodations grew by 28.3 percent and 25.4 percent, respectively.”

It continued: “However, pricing indicator outcomes were mixed, as the average daily room rate (ADR) for entire place listings firmed by 5.1 percent to $474.12, while hotel comparable listings fell by 0.8 percent to $162.30.

“For all of 2020, total room nights sold still declined by 46.9 percent given the importance of international travel, reflecting a 47.8 percent fall-off in bookings for entire place listings and a 38.6 percent reduction in private room listings.

“Pricing data varied, as the ADR for entire place listings grew by 4.6 percent to $412.07, while the ADR for hotel comparable listings decreased by 1 percent to $152.88.”