The Tribune

• Average visitor stay increases up to two days

• LPIA ability to ‘sustain growth’ needs analysis

• Closed hotel return to ‘move beyond recovery’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Resorts are enjoying room rates that are 10-15 percent higher than pre-COVID levels because “the perfect storm of demand is working for The Bahamas”, a senior hotelier said yesterday.

Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, told Tribune Business that an increase in how long stopover visitors spend in this nation - anywhere from one to two days more - is also making “a significant difference” to the industry’s performance as it enters the peak Easter holiday period.

With many hotels either matching or exceeding their performance projections through the 2023 first quarter, he added that the stresses imposed by COVID-19 had “opened our eyes” by highlighting how the industry can operate more efficiently and control costs.

Suggesting that the tourism and resort industries are “moving just beyond recovery”, Mr Sands nevertheless told this newspaper that a full COVID rebound will not be achieved until shuttered properties such as the British Colonial and Melia Nassau Beach bring their room inventories back online.

And he suggested that “an analysis” must be done to determine whether Lynden Pindling International Airport (LPIA), its runways, terminal buildings and other amenities should be expanded “to sustain the level of growth” in tourism without causing any negative impact on its ability to service passenger flows.

The Easter holiday weekend typically marks the end, as well as the peak, of the high winter tourism season, and Mr Sands said: “I think Easter will be very strong for the islands of The Bahamas, and certainly very strong for New Providence and certainly very strong for us here at Baha Mar. Understand that the Easter break is traditionally always one of the strongest periods.

“We are seeing a difference in the average length of stay and the [room] rates that are being achieved. The occupancies are traditionally high during this period. We’re certainly looking at another day, day-and-a-half, two days on the length of stay, which makes a significant difference, and we’ve gained on the average room rate anywhere between 10-15 percent, depending on the property, compared to pre-COVID levels.

“We don’t have a real handle on the impact of Airbnbs, but we are told those are also yielding much higher rates as well. I think it may be fair to say for many hotels that their expectations have been met, and for others their expectations have been exceeded. There still continues to be very strong demand for the islands of The Bahamas.”

Data unveiled by the Central Bank of the Bahamas earlier this week showed that air arrivals for February 2023 were just 2.5 percent below pre-pandemic levels from the same month in 2019, and it forecast that gross domestic product (GDP) growth rates will “moderate as the recovery from COVID-19 becomes more complete”.

“Initial data suggested that the tourism sector continued to register robust growth during the month of February, surpassing pre-pandemic levels. The performance continued to benefit from relaxed pandemic-related conditions and heightened demand for travel in key source markets,” the Central Bank said.

“Official data provided by the Ministry of Tourism showed that total passenger arrivals rose to 0.8m in February from 0.4m in the corresponding period of 2022. In particular, the dominant sea segment more than doubled to 0.7m from 0.3m visitors in the prior year. In addition, air traffic stabilised at 0.1m, exceeding pre-pandemic levels and representing 97.5 percent of the air arrivals recorded in 2019.”

Mr Sands backed this assessment, telling Tribune Business: “We continue to see a strong demand for business, and when we compare things month over month in terms of the previous years, we’re fairly strong. That’s against the backdrop of having no group business for the past three years. Therefore, with the re-emergence of group business and the robustness of transient business, the perfect storm of demand is working for the islands of The Bahamas.

“We’re hopeful it will carry through the rest of the year, and we see no indication why it should not. I think we need to be looking forward, and forward thinking, in terms of the growth potential of tourism.” Mr Sands, though, acknowledged that some of The Bahamas’ pricing power and yields on room rates was being driven by a reduced supply of room inventory as well as demand.

With the closure of properties such as the British Colonial, the Melia and Atlantis’ Beach Towers impacting New Providence’s ability to accommodate visitor demand, the BHTA president said returning the hundreds of rooms represented by those properties to full service will mark the last steps in post-COVID recovery.

“There’s no question that will make a significant difference to the supply chain, and it will also have a multiplier positive impact on revenues in the country,” Mr Sands added of that inventory. “Understand that even though we’re running very high occupancies and rates, that’s against the backdrop of the available amount of rooms.

“As we bring those additional rooms back into place we will be able to generate even more business and get ourselves into an even more favourable position for growth in the years beyond.” Once that occurs, he said the Bahamian hotel and resort industry will have completed its recovery from the COVID pandemic.

“I think we are moving just beyond recovery,” Mr Sands added. “I think we’ll be able to say that once we get back to the volume of rooms we had pre-COVID. Then I think we’ll be in a much better to say we’ve passed that point simply because a lot of those rooms that we lost offline, as a result of some of the impacts and conditions that forced their closure, have returned.

“It’s always a work in progress, but I think that collectively everything is working in the right direction. I think we’re looking beyond Easter. We’re looking to the rest of the second quarter and looking to the third quarter now. The unknown that picks up the slack is Airbnb and the higher than normal occupancies at some hotels.

“I think the industry has responded quite well to the issues that COVID has certainly introduced to us. It’s opened our eyes to operate more efficiently, and I think all those things will begin to pay dividends.” The BHTA chief described hotel employment levels as “a mixed bag”, with some properties having returned to pre-COVID staffing levels, others exceeding those numbers and a few still “getting there”.

Mr Sands, though, said there needed to be an assessment of LPIA’s capacity to handle the surge in stopover visitors over a sustained period of time. “We must do an analysis of our airport capacity, its ability to expand and I think we have to be judicious in looking at what investment may be necessary to sustain the level of growth without having a negative impact on the airport’s infrastructure to deal with increasing demand,” he told Tribune Business.