The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The deputy prime minister yesterday said The Bahamas needs to double its capacity by adding 15,000 new hotel rooms over the next decade if it is to “remain the undisputed leader” in Caribbean tourism.

Chester Cooper, also minister of tourism, investments and aviation, during his contribution to the 2024-2025 Budget debate renewed his previous calls for more Bahamians to invest in tourism given the industry’s growth prospects.

“I remain bullish about tourism but I remain concerned that if we are going to continue the growth that we have seen we need more rooms. In fact, we need to double inventory with another 15,000 rooms over the next 10 years to continue to attract high value guests and maintain our position as the undisputed tourism leader in the Caribbean,” Mr Cooper said.

His comments echo those of Robert Sands, the Bahamas Hotel and Tourism Association (BHTA) president, who has said increased room capacity is the only way to maintain the industry’s post-COVID growth momentum. Mr Cooper spoke out as he voiced optimism that The Bahamas could enjoy a 20 percent year-over-year visitor increase for 2024 with hotel room rates almost hitting $600 for the peak winter season.

Chester Cooper, also minister of tourism, investments and aviation, told the House of Assembly during his contribution to the 2024-2025 Budget debate that The Bahamas over the year’s first four months was on pace to hit 12m visitors for the year.

While maintaining that growth rate is ambitious, given that the destination still has to go through the traditionally slower months of September and October, he nevertheless said: “From January to April 2024, we have seen a significant increase in foreign air and sea arrivals, marking a 12.4 percent rise compared to the same period in the record setting 2023.

“Simply put, that translates to almost four million visitors in four months. If this average holds, and we hope it does, a million a month will result in a 20 percent increase year-over-year or 12m overall arrivals at year-end. This growth not only highlights our resilience but also underscores the enduring allure of The Bahamas as a premier travel destination....

“Nassau/Paradise Island remains the most popular destination, welcoming 1.87m visitors from January to April 2024, a 13.2 percent increase from the same period last year. Grand Bahama, Abaco and Eleuthera have also shown remarkable growth, with increases of 6.8 percent, 3.8 percent and 2.7 percent respectively.

“Grand Bahama and Abaco continue to lead the way in the increase in arrivals by air with 7 percent and 15.5 percent respectively. The Berry Islands, in particular, have seen an impressive 13.3 percent rise in arrivals.” However, much of the growth in visitor numbers is fuelled by cruise passengers, who spend around $100 in the destination compared to the $2,800 by stopover visitors.

“From January to April 2024, we recorded 3.211m cruise arrivals, marking a 14.8 percent increase from 2023,” Mr Cooper added. “Our stopover visitors have shown a strong preference for extended stays, reflecting their desire to fully immerse themselves in the Bahamian experience.

“The average length of stay for stopover visitors in April year-to-date 2024 was 6.6 nights. Notably, visitors from Africa had the longest stays, averaging 10.6 nights, followed by those from the Caribbean and Europe.

“Our hotels, particularly those in Nassau/Paradise Island, have performed exceptionally well. Occupancies remain strong, as do revenues. For instance, the average daily rate (ADR) in March 2024 reached $592.06, a significant increase from previous years. This reflects both the high demand for quality accommodations and the premium that visitors are willing to pay for the unparalleled Bahamian experience.”

Mr Cooper said the Ministry of Tourism is “working tremendously hard to grow that cruise spend number by deploying strategies to increase the number of guests disembarking, improving numbers of tours and deploying strategies like the smart city initiative” in Nassau with the direct impact of tourist spending estimated at $6bn.

Elsewhere, the deputy prime minister said the Budget process will approve a $125m loan from Saudi Arabia’s development fund that will finance airport upgrades throughout The Bahamas. The loan, he added, has a concessional 2.5 percent interest rate attached and is to be paid back over 25 years, with no repayments for five years.

The same terms and conditions are also attached to a $10m Saudi loan financing the Tourism and Development Corporation’s business incubation centres. “These funds will support loans and grants for entrepreneurs, fostering new business ventures and job creation across our islands,” Mr Cooper said.

“I am proud to have helped negotiate those loan terms along with the Ministry of Finance. In fact, the Saudis have been great friends to us and will help us with our Family Island airport renaissance project.”

As for investment, Mr Cooper added: “I want to send a strong message to investors everywhere. When we give concessions we do so to advance economic growth and empowerment for Bahamians. When we give concessions, when we forego taxes we become partners. 

“It is our expectation that you live up to your obligations and treat us like the partners that we are. The model must be a win-win proposition for the Bahamian people.”