The Tribune

• Yields must drive income with inventory off 15-20%

• BHTA president: Growth ‘not at levels seen’ in 2023

• But winter bookings up; industry to beat pre-COVID

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE BAHAMAS is relying on a 5-7 percent increase in room rates (ADRs) to drive resort revenue growth in 2024 due to limited opportunities to expand occupancies, a senior hotelier has revealed.

Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, told Tribune Business in a recent interview that while the nation’s largest industry was set to continue its expansion it will be at a slower rate than last year due to continued restrictions on room inventory.

Despite the British Colonial’s pre-Christmas re-opening in downtown Nassau, he explained that the resort industry has limited headroom to increase already-high occupancies and grow stopover tourism by volume because around 15-20 percent of room inventory remains off-line compared to pre-COVID.

The loss includes both the 694-room Melia Nassau Beach Resort, which Baha Mar’s owner has been demolishing, plus the Atlantis Beach Towers which have been off-line since 2021 awaiting transformation into the Somewhere Else concept.

As a result, Mr Sands said stopover tourism’s growth - at least from a hotel perspective - will have to be driven by rate increases and “yield management” produced by still surging post-COVID travel demand and an increase in visitor lengths of stay.

Disclosing that overall hotel bookings for the peak winter season are “trend- ing slightly ahead of last year”, with the Easter holiday weekend falling earlier this year right at the end of March, Mr Sands also voiced optimism that 2024 will be the year when The Bahamas finally “exceeds” its pre-COVID performance from a stopover visitor perspective.

“I think we’re seeing growth, and growth is manifesting itself in the area of increased average daily room rates,” the BHTA president told Tribune Business. “We’re seeing that January is perhaps stronger than last January. February and March look very strong compared to last year and 2022.

“We should see improvement, but not at the level we saw in 2023 compared to 2022. It’s going to be a mixed bad for properties. A lot of them have achieved high occupancies already. The occupancies achieved in 2023 were at the upper levels.

“The revenue growth, the important element, will have to come from average room rates and the sale of other amenities on the property. I think we’re going to see some growth there, and that’s where the growth opportunity will come for most people. Increased length of stay will be for yield management to fine tune.”

Mr Sands said the resort industry is presently predicting ADR growth of between 5-7 percent, and

added: “Until more rooms come on that will be where the additional momentum comes from.

“I think the greatest opportunity for growing tourism revenues this year on an annual basis is in the Family Islands and Grand Bahama. While they have done better, the head- room that exists in Grand Bahama and the Family Islands is much greater than the headroom that exists in New Providence.”

Asked how much room inventory remains off- line, Mr Sands estimated “between 15-20 percent” with the former Melia and Atlantis’ Beach Towers likely accounting for more than 1,000 rooms between them. Grand Bahama continues to struggle with a significant room shortfall due to two of the three Grand Lucayan complexes still closed.

“It’s a balancing act, and from the country’s perspective the more rooms we have on line the better...... the ability to generate tourism income for the country,” he added. “But, overall, it looks bright. I am satisfied that we will get to pre-COVID and exceed pre-COVID this year, taking into consideration room inventory isn’t where it was pre-COVID.

“Bookings are slightly ahead of last year. It’s a mixed bag but all indications are they are trending ahead of last year’s bookings. Easter is the end of March, and the first quarter is going to be a very strong first quarter.”

Chester Cooper, deputy prime minister and minister of tourism, investment and aviation, previously said The Bahamas likely received “well in excess” of nine million visitors in 2023 due to a “phenomenal” year for the tourism industry.

He added that The Bahamas had comfort- ably beaten its eight million visitor arrivals target for the year. The nine million figure, once confirmed, will be some one million above projections and 12.5 percent ahead of the original forecast. And Mr Cooper reiterated that the arrivals increase, which is projected to generate more than $6bn in visitor spending, has had a positive impact on the Bahamian economy.

The deputy prime minister said he expects the final visitor arrival numbers for 2023 to be “well in excess” of nine million - the majority again being cruise ship passengers. He added that a major goal for 2024 is to convert more cruise passengers to higher spending, greater-yielding stopovers.

“I think at the end of this year we will end significantly higher than forecasted. We recently celebrated our eighth mil- lion arrival; that was at the end of October,” he added. “As the at the end of 2023, we expect that that number will be significantly higher. We want to wait until the final numbers are in, but it will be well in excess of nine million.

“We’re very happy about this. We’re going to continue to push towards achieving the 2024 goals, which will include not just arrivals but more conversion of cruise passengers to stopovers. We are going to continue to work to expand airlift. We have done a significant job in 2023 attracting new, direct non- stop flights from the West Coast.

“Jet Blue, Alaska Airlines and other airlines have added additional routes and additional seats. We’re going to continue this effort; it has worked extremely well for us in 2023. We’re going to continue in 2024. We are receiving a large number of our guests by cruise, and therefore we are going to have a deliberate and intentional effort to see how we might convert more of those cruise arrivals to stopover arrivals.”

Promising to increase entrepreneurial linkages to the tourism sector, Mr Cooper added: “We are in the hospitality business and therefore, as a result of this business, everyone is in the tourism business. As we say: ‘Tourism is everybody’s business’.

“So the taxi drivers, the vendors, the hair braiders, the restaurant owners and workers, the hotel owners, operators and workers, the tour guides, everyone has benefited significantly as a result of these tourism arrivals.

“We are in the process of developing even more entrepreneurial opportunities through the Tourism Development Corporation to ensure the expansive linkages with tourism, and to ensure that the economic benefits continue to flow to all of the population and all segments of the population of The Bahamas.”