The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas was close to hitting the one million stopover target for 2021 set by his ministerial predecessor, the deputy prime minister told the House of Assembly yesterday.

Chester Cooper, also minister of tourism, investments and aviation, said this nation received “almost” one million such arrivals which represent the higher-yielding, greater spending portion of its tourism base as travel demand began its rebound from the COVID-19 pandemic.

With arrivals figures getting ever closer to pre-pandemic 2019 comparisons as 2021 progressed, he added: “Our international air travel [arrivals] were down just 5 percent in December compared to 2019. For the full-year 2021, The Bahamas welcomed almost one million stopover visitors according to our preliminary numbers.”

While that was well below 2019’s total, Mr Cooper said figures from the United Nations World Tourism Organisation (UNWTO) showed international tourist volumes globally were off by 72 percent.

And the December 2021 report from Forward Keys, the travel bookings analyst, showed The Bahamas was 4.5 percent ahead of 2019 arrivals in its main US source markets. Mr Cooper’s figures indicate that the one million stopover target set by his ministerial predecessor, Dionisio D’Aguilar, was not far off the mark.

Elsewhere, Mr Cooper confirmed previous Tribune Business revelations that the Grand Bahama International Airport’s (GBIA) previous owners, Hutchison Whampoa and the Grand Bahama Port Authority’s Port Group Ltd affiliate, pocketed the Hurricane Dorian insurance money and left behind a facility losing $300,000 per month.

The deputy prime minister said: “In summary, the sellers took the insurance money and we spent in the region of $1m upfront. We inherited the ongoing operation and losses to the tune of 300,000 a month for a total roughly $3.6m per annum.”

He warned that since very little repaur has been done since Hurricane Dorian, the US government plans to “cease pre-clearance” operations out of Grand Bahama - something that has already been suspended.

Mr Cooper said: “We’re not going to sit on our hands. We’re going to begin the remedial work at the GBIA. These works will include the reinstallation of generators to ensure that recent incidences of lighting delays at night that have been endured by our residents on Grand Bahama will not recur.”

Tribune Business previously reported how a $200m investment is required for the “comprehensive redevelopment” of an airport that lost more than $13m in the two-and-a-half years before the government acquired it.

The extent of the potential liabilities facing Bahamian taxpayers as a result of the purchase, which closed on June 1 last year, was fully exposed during a briefing for private sector groups interested in bidding on public-private partnerships (PPPs) to redevelop, finance and manage Grand Bahama’s major aviation gateway and six other Family Island airports.

Data disclosed during the briefing revealed that Grand Bahama International Airport generated an operating profit in just one of the five years prior to the sale to the government, providing further insight into why its former owners were both so reluctant to rebuild it post-Dorian and so eager to offload a regular loss-maker to the taxpayer.

The financials, based on audited and unaudited financial statements for Grand Bahama Airport Company, reveal that it suffered an operating loss (based on earnings before interest, taxation, depreciation and amortisation or EBITDA) of $5.567m during the 2019 calendar year.

Some $9.608m in revenues were dwarfed by $15.1276m in total operating expenses, of which $3.69m related to staff costs and $11.486m to non-labour expenses. Those figures likely resulted from the catastrophic damage that Hurricane Dorian inflicted on Grand Bahama International Airport, and its closure to income-generating commercial and private aviation traffic for several months.

And the COVID-19 pandemic, with the closure of international and domestic aviation traffic, was probably the major contributing factor that plunged Grand Bahama Airport Company into a further $6.663m operating loss for 2020.

Total revenues, both aeronautical and non-aeronautical, dropped by almost two-thirds year-over-year to $3.046m, while total operating expenses were down by more than one-third at $9.708m. However, the ‘red ink’ continued to mount with a further $1.105m worth of operating losses during the first four months of 2021 to end-April.

As a result, Grand Bahama International Airport has collectively generated some $13.3m worth of operating losses in the near two-and-a-half years immediately prior to its acquisition by the Government, and further multi-million dollar taxpayer subsidies may well be required to ensure the facility remains a “going concern” until a private sector developer is found to take over all responsibilities.