The Tribune

• Pre-COVID traffic ‘really impacted experience’ for resort guests

• Top executive says: ‘No booking slowdown’ through June 2023

• ‘No falling off a cliff’: Slow season stronger than 40% occupancy

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Atlantis plans to “moderate” the number of cruise passenger day visitors to 60-70 percent of pre-COVID levels, it was disclosed yesterday, with the resort “definitely” set to meet or exceed its 2022 financial targets.

Vaughn Roberts, senior vice-president of government affairs and special projects, told Tribune Business that the Paradise Island mega property has taken “a strategic decision” to control this visitor segment because it had “really impacted the resort experience” for actual guests staying at Atlantis.

The disclosure came as the destination resort sees “no slowdown in booking pace” through the 2023 first half, which is when it expects to fully return to pre-COVID business volumes. And Mr Roberts said management was “very confident” that Atlantis will outperform budget goals for this calendar year provided there is no major hurricane strike on The Bahamas.

He added that the September to mid-November period, traditionally the slowest part of the tourism year, was “showing strength” instead of “falling off a cliff” as in past years, with Atlantis occupancies for the former month projected to be higher than the “below 40 percent” typical for that time of year.

Revealing that the early December period post-Thanksgiving also appeared stronger than normal, Mr Roberts said that while the resort’s group business has “a ways to go” and will not likely rebound to pre-COVID levels until early 2024, global economic headwinds - especially inflation and fears of a US recession - were not having any impact on forward bookings going into next year’s first half.

While the cruise industry, in common with the wider tourism sector, is still building back to pre-pandemic volumes, the Atlantis government affairs chief indicated the resort is comfortable foregoing some revenue in favour of an improved guest experience and reduced footfall when that segment’s recovery is complete.

“We’ve made a strategic decision to really moderate the amount of cruise day pass visitors we have at the resort, particularly when you go back to 2019 and further,” Mr Roberts told Tribune Business. “We had really opened up the door for that, and it really impacted the resort experience for guests staying at the resort.

“We are selectively and carefully taking that market back on. It was significant, and there were crowds today coming over from the cruise ships to go into the water park. It’s still really strong, but we’re not trying to get back to the levels we were at in 2018 and 2019.

“It’s a definite boost. The ‘cruise passenger for the day’ has good revenue and flow through,” he continued. “But we’re very careful in terms of the quality of the resort experience for our guests. We are encouraged by the new cruise port, and think they will exceed passenger volumes pre-COVID, but we’re not trying to get back to the volumes we had in the water park.

“If we get to 60 percent of what we achieved previously, that’s a comfortable place for us to be, 60-70 percent. But we will not get back to pre-COVID numbers.” Cruise passenger day visitors have provided a lucrative revenue stream for Atlantis since the water park was enhanced as part of the property’s Phase III expansion some 15 years ago, COVID excepted. Mr Roberts, though, signalled a quality over quantity approach with the 30-40 percent cut to pre-COVID volume.

Meanwhile, he said stronger “shoulder period” trends were “holding true” for Atlantis as well as other Bahamian resort properties. Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, recently told this newspaper that resort properties were seeing September/October occupancies up to 10 percentage points higher than normal for that time of year, and Mr Roberts said Atlantis is no different.

“We are seeing different patterns, and it’s the slowest periods showing strength which is playing out for the rest of the year,” he told this newspaper. “After Labour Day [this weekend] it’s normally slow, but we are seeing strong patterns; stronger occupancies than before from the bookings.

“The business would normally fall off a cliff for the rest of September because of the peak of hurricane season. It’s not like we’re getting to 80 percent occupancies, but where we’d normally be below 40 percent occupancy we’re showing much stronger than that. We’re very excited about that. Obviously we want to manage our business to the volume we have, but we’re definitely seeing strength and it is noticeable.”

Mr Roberts said the atypical September/October projections were likely being driven by the combination of pent-up travel demand post-COVID and “greater flexibility” in how persons live and due to the increased use of remote working and technology during the pandemic.

Seasonal bargains, as resorts typically lower room rates and offer incentives to attract business during the slower months, were cited as another factor in play. Mr Roberts said occupancies at open hotels were also probably being aided because Nassau/Paradise Island has lost - for the moment - significant room inventory with the closures of Atlantis’ Beach Towers, British Colonial and Melia Nassau Beach resorts.

As a result, he said he was unsure whether this year’s September/October performance will be repeated in future years as more hotel rooms either come back online or are built. Average daily room rates (ADRs) have also been driven up due to the restricted supply. But, disclosing that business normally “tapers off” after Thanksgiving and the Battle 4 Atlantis college basketball tournaments, he added that “even for December we’re seeing more strength than we typically see”.

“We’re very confident that our business will outperform budget for this year,” Mr Roberts told Tribune Business. “We’re very confident on that, barring something like a hurricane or storm. We will exceed our overall budget for the year. In our case it’s a mix of room rate and occupancy that will get us to the revenue.

“We’re confident on the revenue side, and will get to the profit side based on budget. We will definitely meet or beat our budget. Next year is looking very strong, especially through the first half, which is where we have good visibility at this point. We expect to be back at pre-COVID levels for 2023, probably in the first half.”

With Atlantis’ future bookings and other business indicators showing no ill-effect from inflation and general global uncertainty, he added: “We are very, very optimistic about how we will finish this year and what we are seeing for the first half next year. We’re paying close attention to external factors and the macroeconomic factors around us, but are not seeing any slowdown in the booking pace - at least for the first half of the year.

“We are going through our planning process to understand what the second half of next year and beyond will look like, but we don’t see any of this stuff in our bookings for the first half of next year. We don’t see anything.” Mr Roberts said Atlantis has employed “menu engineering” and buying power to contain food and beverage inflation, although if cost increases persist into the future this will be “more of a challenge”.

The Paradise Island mega resort’s group business, which typically books anywhere from 18-24 months out, “is just rebounding now” with caution remaining about staging overseas meetings given the recent experience with COVID. “We’re starting to see the building of a strong pipeline and need that to convert,” Mr Roberts said. “We’re selling for 2024, and won’t see that come back fully until then.

“There’s a variety of factors, but we have a ways to go to rebound to where we were. We’re not sure if building to where we were is the right mix, but we have a ways to go to get back.”