The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

TOURISM is showing “record growth” according to a new report from the Central Bank of The Bahamas - while economic growth continues at a moderate pace.

The Monthly Economic and Financial Developments report said: “Tourism sector output continued to record strong growth, bolstered by robust gains in the high value-added air component and in the sea segment, attributed to the ongoing demand for travel in key source markets.”

It also said: “The domestic economy is projected to sustain its positive growth trajectory in 2023, buoyed by ongoing gains in tourism sector output. However, as indicators return to pre-pandemic levels, the pace of expansion is expected to moderate. Further, downside risks to the sector persist, related mainly to exogenous factors, such as elevated global prices, which could disrupt travel sector activity. In addition, major central banks’ counter-inflation policies could weaken the travel spending capacity of key source market consumers.”

The report added: “Monthly data revealed that tourism maintained a healthy growth momentum in July, amid strong gains in both the high-value air traffic and the sea segment, on account of the ongoing demand for travel in the major source markets.”

The number of departures in July by passengers also rose - with the Nassau Airport Development Company reporting total departures - net of domestic passengers - were up by 15.7 percent to 167,052, compared to last year.

The report said: “Specifically, US departures increased by 16.1 percent to 149,967, while non-US departures grew by 12.5 percent to 17,085, compared to the previous year. On a year-to-date basis, total outbound traffic expanded by 28.1 percent to approximately one million passengers. In particular, US departures moved higher by 28.0 percent to almost 0.9 million visitors, vis-à-vis the same period in 2022. Likewise, non-US departures rose by 28.8 percent to just over 0.1 million visitors, compared to the prior year.

“Positive trends were mirrored in the short-term vacation rental market. The latest data provided by AirDNA showed that in July, total room nights sold increased to 201,530 from 170,904 in the corresponding 2022 period.

“Reflecting this outturn, the occupancy rates for both entire place and hotel comparable listings rose to 67.0 percent and 60.2 percent, respectively, relative to 61.8 percent and 55.0 percent in the prior year.”

Year on year, the average daily room rate for entire place listings also increased by 4.7 percent to $563.52 and for hotel comparable listings, by 1.9 percent to $199.58, according to the report.

The employment rate is also expected to improve associated with job gains concentrated largely in the construction and tourism sectors. With regard to construction the signing of several foreign direct investment projects expected to commence and continue, gives the bank the confidence that employment gains will be sustained.

The report also noted that the improved tourism performance is positively correlated with the country’s fiscal performance. “….The Government’s net financing gap is anticipated to sustain its downward trend. The recovery in revenue is expected to be significantly connected to tourism-led improvements in taxable economic activities,” the report said.