The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank yesterday said tourism’s growth continues to “unwind from the rapid recovery” enjoyed post-COVID with July’s increase in higher-spending air arrivals “more tempered” than cruise passengers.

The banking regulator, unveiling its report on July’s economic developments, said: “Indications are that the tourism sector recorded healthy growth during the review month, but with moderation that continued to reflect unwinding from the rapid recovery from the pandemic. Gains in the high value-added air category were more tempered, however, than for sea passengers.

According to Ministry of Tourism data, total arrivals expanded to 930,000 visitors in June vis-à-vis 790,000 [increase] in the same 2023 period. Underlying this outturn, sea passengers rose by 20.7 percent to 760,000 visitors, while air arrivals increased by 1.7 percent to 170,000 visitors vis-à-vis the previous year.”

Breaking this down by island, the Central Bank said: “Disaggregated by major port of entry, total arrivals to New Providence grew by 15.8 percent to 430,000 visitors from a year earlier. Contributing, sea passengers expanded by 22.9 percent to 300,000 and air traffic, by 2 percent, to 130,000.

“Likewise, foreign arrivals to the Family Islands advanced by 19.3 percent to 450,000 relative to the comparative period last year, as sea traffic increased by 21.4 percent to 420,000 and the air component by 0.8 percent to 38,120.

“In addition, total arrivals to Grand Bahama rose by 0.8 percent to 43,899, marginally higher than the 43,572 recorded a year earlier, as sea and air passengers grew by 0.6 percent to 39,271 and by 1.8 percent to 4,628 respectively.”

The Central Bank confirmed that, for the 2024 first-half, total visitor arrivals increased by 14 percent to 5.7m compared to the same period in 2023. This was led by lower-spending sea arrivals, who increased by 16.4 percent to 4.7m, while air arrivals rose by 3.5 percent to one million.

“The most recent data provided by the Nassau Airport Development Company (NAD) indicated that total departures - net of domestic passengers - rose by 3.7 percent to 173,232 in July relative to the same period in 2023,” the regulator said of activity at Lynden Pindling International Airport (LPIA).

“ Notably, US departures grew by 4.6 percent to 156,844, while international departures fell by 4.1 percent to 16,388, compared to the corresponding period last year. On a year-to-date basis, total outbound traffic increased by 6.5 percent to 1.1m. Specifically, US departures moved higher by 7 percent to 0.9m, while international departures grew by 3.3 percent to 0.1m relative to the same period a year earlier.”

As for vacation rentals, the Central Bank said: “The short-term vacation rental market mirrored these trends. The latest data provided by AirDNA showed that total room nights sold grew by 2.8 percent to 63,511 in July as compared to the prior year.

“Nevertheless, owing to expanded inventory, occupancy rates for entire place listings decreased to 57.7 percent from 63.3 percent in 2023, and for hotel comparable listings to 49.2 percent from 52.7 percent recorded last year. Meanwhile, price indicators showed that the average daily room rate for entire place listings edged up by 0.3 percent to $701.17, while hotel comparable listings fell by 0.9 percent to $184.16.”

Looking ahead to 2024’s remaining months, the Central Bank said: “Expectations are that, as the domestic economy converges to its expected medium-term growth potential, the pace of economic expansion will moderate in the remainder of 2024. However, the performance remains supported by strengthening in the tourism industry and other areas of the real sector.

“Further, new and ongoing foreign investment-led projects are anticipated to provide stimulus to the construction sector and, by extension, economic growth.... In the labour market, further improvement in employment conditions are forecasted, with additional job gains concentrated in the construction and tourism sectors.”

The Central Bank said inflation was expected “to continue to trend downward” due mainly to reductions in oil prices, although the ongoing wars in the Ukraine and the Middle East present risks that these could increase once again if supply shortages result.

“In monetary sector developments, banking sector liquidity is expected to stay elevated, as commercial banks retain their conservative lending stance. Moreover, the environment should encourage additional strengthening in lending to the private sector,” the Central Bank added.

“Further, external reserves are forecasted to remain at healthy levels in 2024, staying above international benchmarks, although a decline is likely given the expected rise in domestic credit. Nonetheless, external balances should remain more than sufficient to maintain the Bahamian dollar currency peg.”