The Tribune

By Fay Simmons

Tribune Business Editor

jsimmons@tribunemedia.net

A senior Citi executive yesterday said he was “neutral to mildly optimistic” that travel and, by extension, The Bahamas’ tourism industry will not be impacted by a global recession in 2024.

David Bailin, chief investment officer for Citi Global Wealth (CGW), speaking with journalists from the Caribbean and Latin America region, said international travel industry performance now closely matches that of 2019, indicating volumes have returned to pre-COVID levels despite fears of a US slowdown.

Referring to expectations for the US economy’s performance in 2024, he added: “We’re actually of the opinion that earnings will grow, that the GDP will be up and what’s very interesting about travel - when you start to look at the data for travel specifically - our travel rates now resemble a lot of 2019.

“If you look at American travel, in particular, this was a huge year for American travel in Europe; I think the highest on record potentially. And so in the event that travel cools, it will probably cool into more expensive destinations, like Europe rather than necessarily in the Caribbean. So there’s no data that I have to suggest that there would be a recession in travel.”

Mr Bailin added that the post-pandemic travel boom will level off over time, as increased fuel costs will affect airline ticket prices, leading to him have a “mildly optimistic” view for the global tourism industry over the next year.

“I would say it’s pretty clear that the level of travel this year does reflect the very last remnants of COVID, and the fact that people were locked down. So everybody, you know, there was a burst of travel that lasted the better part of 12 months after COVID has been abating, and then normalisation is underway,” he said.

“And then secondly, you know, higher fuel prices, which have caused the airlines to have to increase fares has been a bit of a headwind, too. And right now, that doesn’t seem to be changing at all. So, I guess I would describe my view as sort of neutral to mildly optimistic rather than neutral to negative.”

Mr Bailin explained that although the US manufacturing and real estate markets are in recession, sectors of the economy such as travel and services are “doing extremely well”.

He said: “The big question that keeps coming back again and again in the US is: The yield curve has been inverted now for 14 months-plus. Are we going to have a recession?

“Everyone tells you that the yield curve has been a very reliable indicator of recessions in the US. And people even said: ‘Well, we had one last year’, but what’s very interesting to us is that the data suggests that right now we’re in a situation where parts of the US economy have already gone through a recession... large parts of our manufacturing industries.

“And certainly the real estate industry in America is in a recession relative to where it was. Real estate activity in the United States is down probably 23 percent year-over-year. So with that there are parts of the economy, like travel and services, that are doing extremely well.”