The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian marinas were yesterday said to have slashed fee rates by up to 30 percent to maintain boat occupancy levels amid fears of a further squeeze from rising electricity costs.

Peter Maury, a former Association of Bahamas Marinas (ABM) president, told Tribune Business that industry operators have reported “the numbers are definitely off from 2023” at one of the sector’s busiest periods with the US Independence holiday weekend.

The Bay Street Marina chief, confirming the business has dropped its rates, said many competitors had adopted a similar approach which he branded as “crazy for this time of year” given the traditionally strong demand from boaters cruising to The Bahamas for the Independence holiday weekend.

Arguing that the business fall-off has left multiple industries earning less, including the Government with its taxes, Mr Maury told this newspaper that Bahamas Power & Light’s (BPL) revised rate structure - which took effect on July 1 - has made it “harder” to persuade high-end boats and yachts to remain in this nation rather than go back to Florida.

Pointing out that marinas supply and sell “a lot of electricity” to visiting boats, he explained that BPL’s Equity Rate Adjustment - which has increased base tariff rates for its largest general services customers - will result in the extra cost being passed on to these vessels and make The Bahamas further price uncompetitive.

This, Mr Maury argued, will not only impact Bahamian marinas but the numerous other local industries that benefit from spending by boat guests and crew, including grocery stores, gas stations, restaurants and BPL.

“We were on a call just recently and quite a few people were saying the numbers are definitely off from last year,” he told Tribune Business. “They [the Ministry of Tourism] like to talk about the numbers of people, but they should be talking about the amount of dollars spent.

“I’m not going to call any names but I went around to a couple of marinas and everybody has reduced their rates, which is crazy for this time of year. It’s a sign of the times. Over-tax everybody and they choose another destination. We’re down in revenue. We’ve maintained occupancy, but we had to drop our rates like quite a bit, 30 percent.

“At least it’s kept boats in the marina. People are dropping their rates to try and accommodate. There’s been a lot of openings across the Out Islands when you couldn’t typically find a spot in one of their marinas.”

Marques Williams, Mr Maury’s successor and the current ABM president, confirmed to Tribune Business that marina members are reporting a decline in business volumes although nothing “alarming” at this point.

“I haven’t seen or heard any major complaints,” he said. “There is an understanding that there is a decrease in visitors with regard to yachts. I haven’t head of anything that says it’s outstanding or alarming.”

The ABM chief added that the suspected causes of the decline include increased taxation such as the imposition of VAT on yacht charter fees, which the Government argued was necessary to ensure such vessels and their clients pay their fair share for using The Bahamas’ natural resources, crack down on previous avoidance/evasion and create a level playing field with Bahamian operators.

But, when added to the existing Port Department fee, this more than tripled the tax rate for foreign yacht charters from 4 percent to 14 percent. Dockage fees were also increased in this year’s 2024-2025 Budget, while entering and clearing into The Bahamas is said to have become a lot less user friendly after the Government ordered the industry to shut its SeaZPass portal and failed to replace it.

“The sentiments are the same,” Mr Williams said. “The reasons are the same. The taxes, the high cost of product here, the shift by boaters to the southern part of the Caribbean, things of that nature. It’s just the same factors. Just the loss of opportunity.”

Mr Maury, meanwhile, said the increase in electricity costs will further hurt The Bahamas’ cost competitiveness as a yachting/boating destination. “The biggest thing is the increase in everything with the cost of electricity,” he added.

“These boats consume a lot of electricity. When the electricity rates go up we have to adjust the dockage rate to accommodate and offset it. It just ends up catching everybody; everybody makes less. This thing with electricity is crazy.

“Marinas sell a lot of electricity. With the higher rates it becomes even more difficult. The rates in Florida don’t go up over one-third of our current rates. It’s getting harder to tell these guys using 480 power and $1,000 a day in electricity; it’s getting harder to tell them we want them to stay here when it goes from $1,000 to $1,500 and they’ve got to work out how to fit that in their actual budget,” Mr Maury added.

“It’s cheaper to stay in Florida and only come over when they have a charter.... Just the cost of coming here. They are not taking this trip.” The ex-ABM president said there was ever-greater incentive for boaters to either remain in Florida or take shorter trips to Bimini and the northern Bahamas instead of travelling to New Providence or throughout the island chain.

And, with fewer boaters and visitors from this segment, he argued that the Government is earning less than it should from VAT and other revenue streams. “The Government hasn’t adjusted for the lower consumption or lower revenues,” he added. “It is what it is. Everybody just has to accept the loss, including the Government. We’re going to be submitting less taxes.

“VAT is a consumer tax. The Government gains when boats are in the country. They are buying groceries, using electricity, but if the boats are not here there’s going to be less electricity consumption and the gas stations and grocery stores will not benefit. VAT is a consumer tax and they will not consume if they are not here. This model of higher taxes and higher utilities is a failure.

“They are not going to the Out Islands and spending money in Out Island communities like they were and the Government is collecting less revenue. It’s all based on consumption.... They don’t talk to us; don’t understand what this industry is. This small segment of hospitality is the biggest consumer of product per capita in the entire country.”

Asserting that marinas and the wider Bahamas are paying the price for a lack of consultation, Mr Maury said: “We’ll keep doing what we’re doing and see what happens. They keep making mistakes. They don’t trust the industry to have a decent conversation with us, and just keep making mistake after mistake.

“It’s a shame. A lot of businesses benefit from this segment of hospitality but they don’t think it’s important enough.”