The Tribune

By FNM leader Michael Pintard MP

THE Bahamas, one of the world’s most tourism-dependent countries, is facing a major dilemma. It has nothing to do with politics. It has everything to do with facts as presented by data from our Central Bank. 

The graph below, tells us almost everything that we need to know. The cruise business to The Bahamas has seen explosive growth while our much more valuable stopover business, most of which arrive by airlines, has been relatively stagnant. When we compare 2023 visitor arrivals with those for 2019, our previous best year, we discover that ALL of the growth has come from the much less economically valuable cruise passenger. There was NO increase in stopover visitors. Why?

When we compare The Bahamas’ performance for stopover visitors for 2023 vs 2019, we note that stopovers did not grow but stopovers to other destinations in our regions grew by as much of 36% for the same two years. Why? 

In the midst of the announcements of record shattering visitor arrivals, given the economic importance of tourism, we downgraded economic growth forecasts from 5.5% to 1.1%. Why?

In nearly all other vacation destinations around the world, e.g. Las Vegas, Orlando, Macao, stopover visitors come in the greatest number from nearby source markets. On the other hand, stopovers from Florida, the nearest state to The Bahamas, has stopped growing while cruise passengers from Florida are exploding. Why?

And Florida as a source market delivers more stopovers than Canada, UK Europe and the rest of the world combined. We appear to not be concerned about the stagnancy of this critical source market for stopovers. Why?

There was a very strong Bahamas delegation at the SeaTrade Conference earlier this year when the following was revealed as one of the key takeaways according to Travel Agent Central: 

All the leaders say their cruise brands aren’t competing with each other, but rather land-based vacations. “We’re chasing to close that gap to land-based vacations,” said Jason Liberty, CEO of the Royal Caribbean Group. 1.5 percent of the vacation industry represents cruising, while the other 98-plus percent comes from hotels or resorts. “That’s our competition.”

There is a long-standing trope in The Bahamas and Caribbean suggesting that cruise passengers are potential land-based visitors. Clearly, that ship has sailed according to cruise executives at Seatrade. The cruise companies are targeting, saying and succeeding at exactly the opposite, converting land-based visitors to cruise passengers.

There is no question that visitors that once travelled to The Bahamas to stay in our hotels and resorts are now travelling to The Bahamas aboard cruise ships instead. Many of those cruise passengers drive to their departure ports and board their vessels all along the eastern and southern seaboards of the United States, thereby saving themselves the cost of a flight to The Bahamas. They then set sail for a much less expensive two to five-day vacation to enjoy the amenities aboard the ships and the unequalled beaches and waters of The Bahamas that are found primarily on their private islands. It is that substitution and growing preference for cruises that is flattening the number of visitors arriving by air.

Not so long ago, the cramped conditions of cruise ships were such that passengers could not wait to get off the ships once they docked in Nassau or Freeport and enjoy the experiences that they found on land.

Nowadays, the current classes of cruise ships rival our best resorts in total number of cabins, number of restaurants, number of bars, shopping entertainment, spas, casinos and relaxation areas. After visiting the beaches and waters of their private islands, they are quite comfortable remaining aboard the vessel while it is in port at Nassau or Freeport. In that way, their two to five-day vacation in The Bahamas is fulfilled at a much lower total price.

No one should be surprised therefore that more and more travellers are choosing to cruise to The Bahamas instead of arriving by air. But that presents a significant problem for our economy.

Again, according to the Central Bank statistics, the average cruise passenger spends less than $75 in The Bahamas and the average land-based stopover visitor spends more than $2,000 per person. And the land-based visitor support far more employment and pays far more taxes into the Treasury than cruise passengers for fairly obvious reasons. The average cruise passenger is on land in the ports of Nassau and Freeport for approximately eight hours. The average stopover is on land in The Bahamas for an average of eight days.

This problem is peculiar to The Bahamas because of our proximity to Florida, the United States and Canada. Cruises to The Bahamas aboard these modern, amenity-filled cruise ships can be priced far more competitively compared to land-based vacations in The Bahamas. The cost and other logistics involved in cruising from the United States to more distant Caribbean destinations does not present those destinations with the dilemma that The Bahamas faces.

We have a problem, and it needs to be addressed. Our economy needs increasing numbers of visitors spending more then US$2,000 per visit instead of them choosing to come and spend less than US$75 per visit.

No supermarket in The Bahamas can survive with increasing numbers of patrons buying chewing gum instead of carts full of groceries. No bakery in The Bahamas can survive with increasing number of patrons buying cookies instead of cakes and loaves of bread. Those are roads to financial ruin.

Our economy relies primarily on the foreign currency being spent primarily by our stopover visitors. It relies on the substantial employment delivered by our land-based visitors. It relies on the substantial VAT payments that land-based visitors contribute on accommodations for eight days, food and beverage for eight days, transportation to various places over eight days and entertainment and tours for eight days. 

We must seek to find solutions to this dilemma. It will not be solved by denial and meaningless political spin. There are many brilliant Bahamian stakeholders, who we must engage to address crucial issue.