The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Foreign air departures from Nassau’s Lynden Pindling International Airport (LPIA) declined by 11.1 percent year-over-year in October 2024 to signal the extent of the fall stopover tourism slowdown.

The Central Bank, unveiling its monthly economic developments report for October, said departures via The Bahamas’ major aviation gateway excluding Bahamians and residents dropped to just under 91,000. Based on Tribune Business calculations, this represented a decline of around 11,300 compared to the numbers achieved in October 2023.

“Monthly data suggest that the tourism sector continued to post healthy gains during the review month, although at a more tempered pace given stopover capacity constraints,” the Central Bank said. “According to the most recent data provided by the Nassau Airport Development Company (NAD), total departures - net of domestic passengers - reduced by 11.1 percent to 90,900 in October compared to same period in 2023.

“Leading this outcome, US departures contracted by 13.9 percent to 75,186. In a slight offset, international departures grew by 5.6 percent to 15,714 relative to the comparative period in the preceding year.” NAD is LPIA’s operator.

The Central Bank data underscores the September and October year-over-year occupancy decline reported by many hotels. However, rather than capacity constraints, the drop-off was blamed on hurricane-related fears and the devastating impact of storms on Florida and other key visitor source markets, as well as the ‘wait-and-see’ attitude adopted by many Americans to the then-impending US presidential election.

Pointing to a better year-to-date performance, the Central Bank report added: “On a year-to-date basis, total outbound air traffic grew by 3.5 percent to 1.4m, although markedly less than the 25.2 percent growth in the previous year. Specifically, US departures increased by 3.6 percent to 1.2m, while international departures rose by 2.9 percent to 200,000.”

As for vacation rentals, the regulator said: “Data provided by AirDNA revealed that, total room nights sold increased by 2.6 percent to 30,478 in October vis-à-vis the corresponding period last year. However, the occupancy rates for both hotel comparable and entire place listings decreased to 37.8 percent and 38.1 percent, respectively, from 40.2 percent each in the corresponding period in the year prior.

“Further, the average daily room rate (ADR) fell for hotel comparable listings by 4.5 percent to $163.58 and for entire place listings by 2 percent to $605.55. On a year-to-date basis, total room nights sold grew by 6 percent reflecting increases in both hotel comparable bookings (7.2 percent) and entire place bookings (5.4 percent).

“However, occupancy levels for entire place and hotel comparable listings declined by 5.5 percent and 3.5 percent, respectively. Despite lower occupancy levels, the ADR moved higher for entire place listings (0.9 percent) and hotel comparable listings (0.5 percent).”

Meanwhile, the Central Bank said The Bahamas’ annual inflation rate for the 12 months through August fell by more than two-thirds year-over-year to help ease the country’s cost of living crisis for middle and lower income families.

“Average consumer price inflation, as measured by the All-Bahamas Retail Price Index, reduced to 1.3 percent during the 1 months to August 2024 relative to 4.4 percent in the comparable 2023 period,” the Central Bank said. “Contributing to this development, average costs declined for communication by 7.3 percent, transport, by 4.6 percent, clothing and footwear by 2.4 percent, and recreation and culture by 2.2 percent after recording gains in the preceding year.

“Further, average inflation moderated for health (5.3 percent); housing, water, gas, electricity and other fuels (2.8 percent); food and non-alcoholic beverages (2.5 percent); alcoholic beverages, tobacco and narcotics (2.3 percent); restaurants and hotels (2.2 percent); and furnishing, household equipment and routine household maintenance (1.5 percent). In contrast, inflation quickened for education (4.5 percent) and miscellaneous goods and services (3.6 percent)”.

On the monetary front, foreign currency outflows decreased sharply in October. “Provisional data on foreign currency sales for current account transactions showed that monthly outflows decreased by $274.9m to $512.6m relative to the corresponding period in 2023,” the Central Bank said. 

“Leading this outcome, payments for ‘other’ current items - primarily credit and debit card financed imports - declined by $166m, and for oil imports by $105.2m. Further, outflows reduced for factor income payments by $21m and travel-related transactions by $1.7m. Conversely, payments for non-oil imports rose by $17.3m and transfer payments by $1.7m.”

The Central Bank added that Bahamian dollar credit grew by $10.6m in October, which represented a reversal from a $21.3m reduction during the same month in the previous year. “Underlying this outturn, the growth in private sector credit extended to $17.2m from $6.3m in the previous year,” it added.

“In particular, consumer credit rose by $14.1m, exceeding the $600,000 uptick last year, while mortgages increased by $9.9m, a shift from a $12m fall-off in the prior year. In a partial offset, commercial credit declined by $6.8m vis-à-vis the $17.7m build-up in the comparative period a year earlier.

“Further, credit to public enterprises edged up by $1.2m, a switch from last year’s $2.4m decrease. However, net claims on the Government fell to $7.9m, albeit less than the $25.3m reduction in 2023.”