The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

ASTRONOMICAL boat insurance costs are having a “huge” impact on Family Island hotels and marinas through shortening the tourism season by a month and leaving many “empty” over the summer.

Emanuel “Manny” Alexiou, the Bahamas Out Island Promotion Board’s president, told Tribune Business that whereas resorts and marinas used to be “busy through” to the early September Labour Day holiday in the US most boaters now depart this nation’s waters in early August and do not return until early to mid-November.

He explained that, for many owners, insurance costs meant it was simply too expensive to keep their vessels in The Bahamas during hurricane season. Mr Alexiou, also the Abaco Beach Resort’s proprietor, revealed that one Carolinas resident had informed him he was moving his boat from The Bahamas to Georgia this summer to save around $40,000 in insurance costs.

Disclosing that insurance costs were an issue now on the Bahamas Out Island Promotion Board’s “agenda”, he told this newspaper that the impact represents a “big cost” to this nation’s resort, marina and boating industries in terms of reduced business volumes and bookings during the summer months.

“As for the boating industry, I think we in this survey found that airlift and related infrastructure were most, most important, and the high operating costs of doing business in The Bahamas and boat insurance, especially the fact most boaters have to leave at the beginning of August and not return to the beginning or end of November. That’s a big cost to The Bahamas in terms of occupancy,” Mr Alexiou said recently.

Speaking subsequently to Tribune Business, he explained that owners face “add-on” insurance costs if they keep their vessels in this nation during peak hurricane season. This is because, “if the boat sinks or has major damage here, they will have to get to the US to fix it, so the extra cost of salvage and transportation adds on to it” and represent increased expenses that insurers factor into premium rates.

“It’s a huge impact,” Mr Alexiou said of the now-typical August exodus. “There’s increased costs, like insurance for boats. If we can’t cure that, boats will leave in August and not come back until November.

“I think a lot of those people in the past, before, would leave their boats here and pay people to keep an eye on them. Our obligation was to go in, make sure batteries were charged, the fridge was kept on - do it once a day - and that there was no water in the bilge.

“Now a lot of boats leave. We have empty marinas and empty hotels for September, October and November, and part of August. When the boats are here they tend to have some people on them, and people in the hotel. It creates a bit of life in the restaurants and bars, and outside our gates as well,” the Bahamas Out Island Promotion Board president continued.

“That’s a huge impact. When I first came up here and got involved with the hotel, we were busy through September 5 and Labour Day. That was the last summer holiday with family and they kept their boats here. Now, they leave.” Besides peak hurricane season, Mr Alexiou said he felt part of the increasingly earlier exodus was also being driven by an earlier start to the school calendar in Florida.

“As an Out Island Promotion Board, we have put this on our agenda,” he told Tribune Business, “and started to have discussions with local insurers to see what the issues might be and if they can approach US insurers and US yacht clubs.

“What are they selling yachts for? The boating industry is wanting to have a vibrant place to go and have fun. Whether we can talk to salvage people here, or create a salvaging Bahamas fund, I don’t know. I only learnt this this year.

“A Carolinas guy is taking a boat to Georgia because he’s saving $40,000 a year in insurance. That’s just to take it away from here at the beginning of August, and he can bring it back at the beginning of November or end of November.”

Mr Alexiou’s concerns were backed by Peter Maury, the ex-Association of Bahamas Marinas (ABM) president, who told this newspaper: “August seems to be the time now. After COVID we had a good run where they stayed here all the time, but now with all the taxes and insurances and everything else it’s become difficult for these guys to do anything.

“We know that in the hurricane season a lot of boats have to leave because costs have become so high that nobody wants to pay for that coverage. I don’t know how we fix that. We’ve talked to the insurance companies before about it. The insurance companies here are just brokers, not underwriters. I don’t know how that’s going to change.

“Insurance period has just got out of control. Liability insurance, everything has just gone through the roof it seems like. There’s no offset. Everything is higher; higher insurance, higher taxes, so you just take the boat and take it somewhere where you can shut it down.”

Mr Maury described higher insurance costs as simply “another nail in the coffin” as they were compounding increased taxes, such as VAT, and difficulties that visiting boaters were encountering in easily paying this levy and other fees, as well as the lengthy process to enter and exit The Bahamas.