The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank’s governor yesterday moderated his 2022 economic growth projection to “over 5 percent” with the tourism industry not returning to pre-COVID levels in the year’s first half.

John Rolle, speaking at the regulator’s 2021 fourth quarter and full-year economic developments briefing, said: “Economic growth in 2022 is expected to exceed 5 percent, which would be significantly stronger than the recovery onset of just above 2 percent in 2021.

“For the first time in two years, the tourism product is positioned to experience uninterrupted business over the entire calendar period. In contrast, both industry segments only recorded partial year performances in 2021.

“Again, however, the industry will have to wait until 2023, at the earliest, to be fully recovered. In particular, neither the seasonal capacity for cruise lines nor hotels is being projected to reach pre-pandemic earnings levels during the first half of 2022,” he added.

“This is noteworthy because it is during the first half of each year that the industry records more than half of its revenues.....The indicative information on employment is that it will keep closer pace with the recovery and in 2022 than it did in 2021.”

Mr Rolle’s gross domestic product (GDP) growth projection of “exceeding 5 percent” is slightly less bullish than the “8 percent of just over” forecast he gave at the Bahamas Business Outlook forecast last month, with the latter prediction mirroring the International Monetary Fund’s (IMF) estimates.

Elsewhere, the Central Bank governor said The Bahamas’ first-ever credit bureau’s benefits will become more evident in the medium-term as it is still compiling information Bahamian borrowers to build a full, accurate picture of their loan history.

He added that the roll-out of the Sand Dollar, the Central Bank-backed digital currency, was focusing on completing the links between digital wallets and bank deposit accounts amid plans to ramp-up the recruitment of businesses as consumers.

And the financial services ombudsman hired in the 2021 third quarter is focusing on developing recommendations for legal reforms that will address “consumer financial protection issues in The Bahamas”, of which bank fee and service charges are “one element”, as well as ensuring there is more transparency and disclosure by the commercial banks.

Central Bank data confirmed that stopover tourism led The Bahamas’ rebound, with total air arrivals up by 97.8 percent year-over-year for the 11 months to end-November compared to a 74.5 percent fall-off in the COVID-ravaged year that was 2020.

However, sea arrivals for the 11 months to end-November 2021 were down year-over-year by 40.1 percent due to the fact the cruise industry did not resume sailings until June and the fact that 2020 saw almost three months’ worth of business in the first quarter prior to the end-March shut down.

“Consequently, total visitor arrivals still declined by 9.7 percent, which was tapered from a 73.1 percent reduction in the same period of 2020,” the Central Bank said. “The most recent data provided by the Nassau Airport Development Company (NAD) revealed that total departures - net of domestic passengers - rose to 98,305 in December from 21,040 in the corresponding month of 2020.

“In particular, US departures increased to 83,115 from 16,009 in the prior year, while non-US departures advanced to 15,190 from 5,031 a year earlier. On a year-to-date basis, total outward bound traffic moved higher by 80 percent following a decline of 74.2 percent in 2020.

“Underlying this outcome, US departures grew by 99.2 percent after a 75.2 percent fall-off in the previous year. Further, the decline in non-US departures slowed to 13.7 percent from 64.4 percent in the previous year.”

As for vacation rentals, the Central Bank added: “Positive trends were also mirrored in the vacation rental market, as the demand for short-term rentals accelerated. The latest data from AirDNA revealed that, in December, total room nights sold rose more than two-fold to 124,096, from 50,692 in the comparative 2020 period.

“Reflective of this outcome, both entire place and hotel comparable listings increased to 52.4 percent and 49.3 percent, respectively, from 31.9 percent and 31 percent in the corresponding period last year. Price indicators strengthened year-over-year, as the average daily rate (ADR) for hotel comparable listings firmed by 11.6 percent to $181.14, and for entire place listings by 7.2 percent to $508.33.

“On a year-to-date basis, vacation rental room nights sold grew by 62.8 percent, occasioned by respective gains in bookings for entire place and hotel comparable listings by 64.8 percent and by 47.4 percent. Further, ADR for hotel comparable and entire place listings increased by 12.8 percent and by 16.2 percent, respectively.”