The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian marinas were yesterday said to be facing “the worst US Labour Day weekend we’ve seen in the last decade” with electricity costs up 25 percent “over usage” under BPL’s new rate structure.

Peter Maury, the Association of Bahamas Marinas (ABM) president, told Tribune Business that the industry is “hanging in there” amid ever-escalating cost and booking fall-off pressures while describing present business volumes as “very slow”.

With larger marinas, which rely more heavily on transient boats passing through, “not seeing the numbers they have in the past”, he explained that this did not bode well for ABM members and others in the central and southern Bahamas because they are typically “fed” by their Nassau counterparts.

Mr Maury blamed the drop-off on several factors, telling this newspaper that increased fuel, utility and grocery costs were likely making US boaters question whether visiting The Bahamas is “just too expensive now” especially when combined with the increase in foreign yacht charter fees/taxes and the cumbersome process involved in clearing and entering this nation.

“I think I can safely say this is probably going to be the worst Labour Day we’ve seen so far in the last decade for sure,” the ABM president told Tribune Business. “All you’ve got to do is look around the marinas. There’s not a lot of boats in The Bahamas right now.

“The big transient marinas that support the boats that travel to the Out Islands, the island groups, are definitely down for this summer. From here in Nassau, in the central Bahamas and southern Bahamas, for Labour Day it’s going to be very slow.

“You have boats that stay here typically at a lower rate on longer stays, but the bigger marinas as far as rates go depend on the transient boats coming in and spending time, and they are definitely a lot less. We know that the transient marinas, which depend on the visiting boats, they’re not seeing the numbers they have in the past.” Mr Maury said he was unable to give figures or percentages for the drop-off in boating/yachting business ahead of this weekend’s US Labour Day holiday, which marks both one of the busiest periods in - and the end to - The Bahamas’ summer boating season ahead of peak hurricane season and the return to school.

Affirming that his statements were based on his personal observations at many marinas, as well as speaking to multiple industry counterparts, he added: “I would say it’s down quite a bit compared to last year. Compared to last year, it’s down pretty high. We’ve had some things happen in the industry.”

Mr Maury said potential uncertainty caused by the upcoming US presidential election may also be a factor keeping some boaters at home, but added: “Some of the difficulties with entry and the bookings and stuff, and everything is going up; fuel, groceries and everything else, so The Bahamas is becoming a very expensive place for these guys to visit.

“It’s starting to definitely affect our occupancies for sure. They’re not seeing the numbers they did before, which were keeping a lot of things going. If boats don’t get the charters they are unable to cover their expenses, and a lot of them are asking for discounts from the marinas. Say they used to do 20 charters a year and are now doing 12, that’s a big expense to cover, bridge and pay.”

Bahamas Power & Light’s (BPL) new equity rate adjustment (ERA) tariff structure has increased base electricity rates for the utility’s largest customers, which is says number no more than 400. Mr Maury, though, told Tribune Business that marinas were included in that number as among the biggest energy consumers, and the new rate structure’s implementation from July 1 had forced the sector to raise its costs.

“Most marinas have had to go up on their utilities because of power,” he explained. “As far as business goes, marinas probably use more power than others per capita than others through plugging the boats in. They use a lot of electricity.

“Whatever formula they [BPL] are using, we are at the peak. We’ve had to increase our electricity costs. The boats are plugged in every day, using the power, and are not getting the charters. We’ve had to drop our dockage rates [to compensate]. We warned about this two years ago. The increase, even in grocery bills, at some point becomes not worth being here. It’s just adding up.”

Mr Maury said that marinas, unlike other businesses and homes, do not have the luxury of turning electrical supply to their docks off as they must keep them fully powered even when boating numbers are down. “I think a lot of us were shocked when we saw our bill,” he told this newspaper of the BPL bills issued post-July 1.

“It went up quite a bit. For us, the increase over usage was probably 25 percent. We have to have power on all the time. It’s not always getting used. Docks, even if you do not have boats, we still have to provide power. We have transformers that are on using heavy power.

“It’s not like a house. These things burn energy sitting there. It’s like a power plant. I cannot turn off part of any dock; I have to have the whole thing running even if I have only one boat there. I cannot turn it off. If I have a dock for ten boats, three are there and I had eight the year before, the dock is using more energy even with only three boats,” Mr Maury continued.

“It’s a very confusing number to put your finger on. Where some businesses may have seen an increase of 20 percent, we’re seeing higher even though we’ve not sold all the slips because we are still using energy. It can get costly.:

Voicing fears that The Bahamas could ultimately hit a so-called tipping point for boaters on overall costs, Mr Maury said: “Our biggest question mark is just at what point are the customers going to say it’s just too expensive now and we will spend less time going to The Bahamas.

“That cannot work for us. A lot of marinas need boats all the time. As costs go up, they will go back to the US and wait for a charter. It’s not just the marina business that is affected; it’s the businesses around it. The grocers, the restaurants, the provisioners, all those Bahamian businesses are beginning to suffer.

“We’re hanging in there and will see what the next cycle brings, I guess. Hopefully fuel goes down, our utilities go down and we get people back over here. Right now, it’s very slow... I’m sure the hotels are seeing some of the same thing. Some of them are seeing lower occupancies, they’re adjusting their room rates, and some of the bigger hotels are doing less than they were at this time last year,” he added.

“The hotels are in competition now and, like the marinas, when we start cannibalising each other for rates that’s never a good thing. It’s pretty slow and I know some of the other marinas are complaining. The Nassau marinas are where a lot of boats come. All those marinas in Eleuthera and Exuma are fed out of here.

“They may not see it in Bimini, as those are small boats that run across for the weekend and don’t spend a lot of time here, but for the central and southern Bahamas marinas it’s definitely down. It’s not just a couple of marinas; it’s definitely all of them.”

Mr Maury said there has yet to be any contact between the ABM and DigieSoft Technologies, the company contracted for $3.65m to develop a new online portal to facilitate the clearance of visiting boats into The Bahamas and their payment of the associated fees, even though the necessary project funding has been allocated and released in the 2024-2025 Budget.

“It seems like the Government really came down on this industry a lot,” he added. “It’s not just the taxes. It’s getting harder and harder to clear boats in. It’s the whole process. The portal was supposed to make everything easier. They keep saying they’re going to do it but nothing is ever done.”

The ABM created its own online portal, SeaZPass, to facilitate fee payment and entry by visiting boaters but it was told to close this by the Ministry of Finance following the Davis administration’s election amid a dispute with the company that was facilitating payment of the fee income to the Public Treasury.

“The Prime Minister came out and said he wanted to make The Bahamas a larger yacht registry. It would be great because there are shore side businesses in The Bahamas that would benefit from it, but we’re just not finding that support for what his intentions were,” Mr Maury added. “I don’t know what it is. I don’t want to speculate. I don’t know if there’s a reason for it.”