The Tribune

• Demand ‘rising quicker than airlines can adjust’

• BHTA chief brands it as ‘nice problem to have’

• ‘Value for money’ critical on Florida routes

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Hotel and Tourism Association’s (BHTA) president yesterday voiced concerns that high airline ticket prices, especially at peak weekends and holidays, “could be a deterrent” for travel to this nation.

Robert Sands told Tribune Business that tourism demand outstripping airlift capacity was “a good problem to have” as The Bahamas seeks to rebuild its major industry following COVID-19’s devastation, with the desire to travel to this destination “growing quicker than some airlines can adjust”.

He spoke out after other tourism executives interpreted $650 weekend round-trip costs between Nassau and Florida as a sign that pent-up demand for The Bahamas may be exceeding the airline industry’s capacity as key source markets, especially the US, maintain the pace of their COVID-19 vaccination roll-outs.

Kerry Fountain, the Out Island Promotion Board’s executive director, told this newspaper: “I have to fly to Nassau for a funeral this weekend, but I can tell you air fares for Nassau are already high. This means to me there is a huge demand and we may not have enough seats because the prices are alarmingly high.

“I’m coming in on a JetBlue flight costing $450 one-way, and on Sunday I’m flying on Bahamasair, travelling on two airlines because of availability. The one-way ticket there is $200. You’re talking $650 for a two-way ticket. I’m complaining because we have to pay out of pocket, but it signifies we have more demand than supply, and signifies more people are travelling. I can live with it.”

His assessment was echoed by Mr Sands, who said: “I am concerned that the level of [airline] pricing is currently where it’s at. As we continue to add additional airlift, where the loads are not as high we’ll see more price elasticity. We have to believe the airlines are yield managing. They’ve been through a difficult, hard time, and what they’re doing is yield managing.

“That is not working to our advantage at this point in time, and price sensitivities can be a deterrent to pent-up demand and persons wanting to travel to a particular destination. We’ve seen some of that, particularly at weekends and peak holiday weekends, but we’re beginning to see some levelling off of the rates.

“The demand, certainly peak demand weekends and prime time dates, is growing quicker than some of the airlines can adjust to put on additional capacity. They’re working with us. It’s a continual work in progress. In a way, and I don’t say this tongue in cheek, it’s a good problem to have,” Mr Sands continued.

“It’s obviously something where we want to have value for money coming to the destination, especially if they are coming from Florida. It shouldn’t be more expensive to fly to Nassau from Florida than it is from New York.”

Mr Sands said the start of cruise line home porting in The Bahamas means “the management of airlift into the destination is going to have to be closely monitored as a result of this new sector”.

Noting that airlines engage in “tier pricing in terms of availability on planes”, he added that a bulk booking of seats for passengers flying into Nassau to meet the vessel or leaving after disembarkation could both drive up ticket prices and reduce capacity for stopover visitors unless the issue was addressed.

And, with Canada still barring direct airlift to The Bahamas and other destinations, the BHTA president said there were “a number of COVID-19 related issues still impacting demand” into The Bahamas.

“We’re always looking for incremental airlift into the marketplace, but as demand increases so will the number of airline seats, and we see week-over-week, month-over-month the introduction of additional airlift into the destination,” Mr Sands added.

“Once we adjust to the demand continuing to increase, and airlift continues to flow, we’ll see the impact on pricing structures at certain gateways to The Bahamas. I’m not aware of any instances where persons cannot get flights. We continue to add to the pool of airlift coming into the destination. We’re nowhere near where we used to be, and as we grow the tourism business so airlift will increase at the same time.”

Mr Sands pointed to the recent returns of both British Airways, from London, and Copa Airlines out of its Panama gateway to Latin America, as signs that airlift is returning as demand for Bahamas vacations increases.