The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

TOTAL air arrivals to The Bahamas in May hit 94.2 percent of pre-COVID’s 2019 high, the Central Bank revealed yesterday, with overall visitor numbers for the first five months of 2023 some 68 percent ahead of last year.

The monetary policy regulator, in its monthly report on May’s economic developments, said the tourism-led recovery from the pandemic was maintaining its momentum with air and sea arrivals to New Providence up by 30 percent and 85.2 percent year-over-year, respectively, for the first five months of 2023. Combined, total arrivals were ahead of 2022 figures by 64 percent.

“Monthly data suggested that the tourism sector continued to register healthy growth, as increased demand for travel in key source markets contributed to robust growth in both the high value-added air segment and sea traffic,” the Central Bank said.

“Official data provided by the Ministry of Tourism showed that total visitor arrivals rose to 0.8m in May from 0.5m visitors in the same month of 2022. Specifically, the dominant sea component grew to 0.6m from 0.4m passengers in the prior year. In addition, air traffic stabilised at 0.1m, representing 94.2 percent of the pre-pandemic high that was recorded in 2019.

“A breakdown by major port of entry showed that total arrivals to New Providence expanded to 0.3m from 0.2m a year earlier. Supporting this outcome, the sea segment increased to 0.2m from 0.1m in the preceding year, while air traffic steadied at 0.1m visitors,” the regulator continued.

“Further, foreign arrivals to the Family Islands amounted to 0.4m, extending the 0.3m visitors recorded a year earlier owing to increases in both the sea and air components to 0.4m and 34,410, respectively. In addition, arrivals to Grand Bahama measured 42,710, surpassing the 24,990 registered in the corresponding period of 2022, as respective sea and air visitors amounted to 38,572 and 4,138.

“On a year-to-date basis, total arrivals rebounded to 4.2m vis-à-vis 2.5m in the comparative period of 2022. Underlying this outturn, air arrivals increased to 0.8m passengers from 0.6 million in the previous year, bolstered by growth across all major source markets. Similarly, sea arrivals accelerated to 3.4m from 1.8m visitors in the preceding year.”

Turning to the departure figures provided by the Nassau Airport Development Company (NAD), the Lynden Pindling International Airport (LPIA) operator, the Central Bank said: “The most recent data provided by the Nassau Airport Development Company (NAD) indicated that total departures - net of domestic passengers - rose by 17.7 percent to 132,367 in May compared to the same period last year.

“Specifically, US departures strengthened by 21.8 percent to 115,074 vis-à-vis the previous year. Conversely, non-US departures fell by 4 percent to 17,293 relative to the comparative period last year. On a year-to-date basis, total outbound traffic advanced by 33.5 percent to 684,468 passengers.

“In particular, non-US departures grew by 34.7 percent to 102,294, vis-à-vis the same period in 2022. Likewise, US departures expanded by 33.3 percent to 582,174 visitors, compared to the corresponding period last year. As for vacation rentals, the Central Bank added: “Positive trends were mirrored in the short-term vacation rental market. The latest data provided by AirDNA showed that, in May, total room nights sold moved higher to 189,398 from 136,311 in 2022.

“Contributing to this development, the occupancy rates for both entire place and hotel comparable listings appreciated by 61.4 percent and 57.7 percent, respectively, relative to 54.7 percent and 51.7 percent in the preceding year. Further, price indicators revealed that year-over-year, the average daily room rate (ADR) for entire place listings rose by 18.1 percent to $612.66, and for hotel comparable listings by 4.1 percent to $200.59.”

Pointing to the recent unemployment data released by the Bahamas National Statistical Institute, the Central Bank added: “The unemployment rate declined by 70 basis points to 8.8 percent in May 2023 compared to May 2019, as the number of self-employed persons rose by 5 percent to 34,095 relative to May 2019.

“However, the number of employed persons decreased by 6.8 percent to 200,175 vis-à-vis May 2019. The labour force participation rate also fell to 75.9 percent compared to 82.9 percent in May 2019, as the number of discouraged workers increased by 2.3 percent to 2,035 in the review period.

“Analysis by major markets revealed that the jobless rate in New Providence, the most populated centre, reduced by 50 basis points to 8.9 percent compared to May 2019. Likewise, the unemployment rate in the second largest market, Grand Bahama, fell by 10 basis points to 10.8 percent vis-à-vis May 2019. The jobless rate in Abaco was also 22 basis points lower at 7.1 percent over May 2019.”

The Central Bank largely kept its economic outlook unchanged, stating: “The domestic economy is projected to maintain its growth trajectory in 2023, supported by a robust recovery in the tourism sector. However, as indicators return to pre-pandemic levels, the pace of expansion is expected to slow.

“Moreover, downside risks to the tourism sector persist, associated mainly with exogenous factors, such as elevated global oil prices, which could dampen the travel industry’s competitiveness. Further, major central banks’ counter-inflation policies could constrain the spending capacity of key source market consumers. Nonetheless, new and ongoing foreign investment-led projects are anticipated to provide support to the construction sector, and by extension to economic growth.

“Monetary sector developments will include high levels of banking sector liquidity, as commercial banks retain their conservative lending stance. Further, external reserves are projected to remain buoyant in 2023, remaining above international benchmarks, buttressed by expected foreign currency inflows from tourism and other net private sector receipts. Consequently, external balances should remain more than adequate to sustain the Bahamian dollar currency peg.”