The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A top hotelier yesterday said tourism demand for the post-Easter weekend period is “higher than it’s ever been” and “going beyond the traditional ring fencing” that usually marks the peak winter season climax.

Robert Sands, the Bahamas Hotel and Tourism Association (BHTA) president, told Tribune Business that business volumes for May and June are “extending the winter season” past the holiday weekend that traditionally marks its ending and the start of the slower summer period.

“We’re seeing the pent-up demand for the destination is going beyond the traditional ring fencing, which is after Easter, and seeing it extend to May and June, which are higher than they have ever been,” he said. “It appears to be extended, and every indication is that it is going longer, which is great.

“Easter this year is late April, and it is normally much earlier. It’s giving the destination an extended winter season, and I’m using that as an acronym for the high season. We look forward to it, and let’s pray that it’s the start of a trend.”

Mr Sands described the upcoming Easter weekend as “a mixed bag” for the Bahamian tourism and resort industry, with occupancies and bookings varying from island to island depending on factors such as airlift and available room inventory. He added that the sector is “not always comparing apples with apples” given that this year’s holiday period is later than those for prior years, while 2019 - the last full pre-COVID period - was a “banner year” for tourism.

“Notwithstanding these factors, New Providence and the Family Islands definitely are on a firm road to recovery and, for Easter, many hotels are citing better than or the same occupancy against 2019. For some of the hotels they’re running behind, and in some Family Islands that have been impacted by reduced airlift and reduced inventory, they are finding challenges and occupancy levels have followed suit.

“I can give you Eleuthera, Exuma and Abaco as examples where occupancies are meeting or exceeding 2019 levels in some instances. That’s where airlift has improved, but where it has dropped occupancies have followed suit. This firm recovery is not applicable to all at this point in time. Grand Bahama as a destination continues to face challenges. It’s a mixed bag, but the overall impact is positive. Not every island is in the same condition for airlift and hotel rooms.”

Mr Sands said hotel yields, and average tourist length-of-stay, were both increasing although he did not provide any figures. “For the most part, there has been growth in average room rates year-over-year,” the BHTA president said.

While air fares were rising under pressure from increased fuel costs, he added that it was “very difficult to judge” how much of this was driven by global oil prices versus “yield management” by airlines as they sought to maximise revenues by focusing on more profitable routes given the industry’s issues with pilot shortages.

“The room inventory available post-COVID is not the same as the inventory available pre-COVID,” Mr Sands said. “The positive news is that recovery is taking place and also that business is improving, and that the demand for the islands of The Bahamas continues to be strong. Our business is currently headed in the right direction.”

Tracy Cooper, Bahamasair’s managing director, recently confirmed that the national flag carrier has been forced to respond to aviation fuel price volatility through raising its air fares by $3 on domestic routes and by $10 internationally.

With fuel costs soaring by an “extra $100,000 per week”, Mr Cooper said the airline had no choice but to pass some of the increase on to passengers as it was impossible to “absorb all of that” within its existing expense structure. He added that aviation fuel prices had risen by $1.50 per gallon over the past six to seven weeks after Russia’s invasion of Ukraine sparked sudden volatility in global oil prices.

He added of current aviation industry conditions: “What we have is the fact that the fuel prices have gone up significantly. We’re up $1.50 or so more on a gallon of aviation fuel. It’s over $4.12 a gallon of aviation fuel.

“This has obviously been the impact of the Russian invasion. Unfortunately, Bahamasair is using 90,000 to 95,00 gallons of fuel a week, so it’s a significant impact. It’s easily costing the airline an additional $100,000 a week in fuel costs. We don’t have any choice but to pass some of that on to the consumer because we cannot absorb all of that.”

Based on the $1.50 per gallon increase figure supplied by Mr Cooper, and the 90,000-95,000 gallons consumed by Bahamasair per week, this newspaper’s calculations show that the airline’s fuel costs have risen by between $135,000 and $142,500 per week. Based on a four-week month, that means monthly costs have jumped by between $540,000 and $570,000. Over a year, that translates into between a $7.02m and $7.41m expense hike.