The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The deputy prime minister yesterday conceded The Bahamas is “bracing” for a fall-off in travel and tourism demand after Donald Trump’s tariffs wiped an estimated $2.5 trillion off the value of global stocks.

Chester Cooper, also minister of tourism, investments and aviation, told the Eleuthera Business Outlook that the country’s largest and most important industry is almost certain to encounter “headwinds” as a result of the US president’s decision to upend long-standing global trade rules via the imposition of tariffs ranging between 10-50 percent on all US imports.

Besides impacting the wealth and disposable incomes of Americans, who account for up to 90 percent of visitors to this nation, Mr Cooper warned that the resulting economic and political uncertainty will likely encourage a significant number of would-be travellers to either remain at, or stay close, to their home countries.

However, Mr Cooper argued that The Bahamas is better placed than “many of our Caribbean counterparts” to minimise any fall-out due to its US proximity and market positioning as a high-end destination, with its wealthy client base likely to be less impacted by the price increases and inflation forecast to be generated by Mr Trump’s tariffs.

Still, the deputy prime minister suggested that the US president’s economic and trade policies will almost inevitably disrupt Bahamian tourism’s record-setting arrivals pace in 2025. He disclosed that, for the first two months of this calendar year, Eleuthera’s near-18,000 visitors represented “a remarkable 34 percent increase over the prior year” with air arrivals ahead of 2024 comparatives by some 3.4 percent.

Noting that the 2025 arrivals jump was greater than the 22 percent year-over-year increase experienced during the first two months of 2024, he added: “This is truly encouraging and instructive as to what lies ahead for the island of Eleuthera, its economy and its people.”

Yet, in the very next breath, Mr Cooper warned that this outlook - in the short-term at least - is tempered by what is coming out of the White House. “Tourism, though, is not without its headwinds,” the deputy prime minister said. “We anticipate over the course of the next few months that there will consistently be some uncertainty in the marketplace.

“Yesterday and today, the world is swirling as a result of the tariff wars, which is going to result in an overall increase in the cost of living, particularly for Americans. Eighty percent of our tourists come from the USA, and therefore this will have some resulting impact on our major industry. 

“We have had this record 2023 year and record 2024 year, and so far we are beating those records in 2025, but we are bracing ourselves. In addition to uncertainty in our key source market, the USA, the world - with the geo-political issues - is in a state of uncertainty,” the deputy prime minister continued.

“Countries around the world are in a state of uncertainty. When people are generally uncertain about the future, when they are concerned about the geo-political environment, they tend to stay home or close to home. Luckily we are very close to our source market, and therefore we expect to continue to fare well and, in many cases, better than many of our Caribbean counterparts.”

Robert Sands, Baha Mar’s senior vice-president of government and external affairs, yesterday told Tribune Business that The Bahamas and its tourism industry are in “new territory” over the Trump tariffs and likely retaliation by major US trading partners such as China and Canada. While the global trade conflict will almost certainly impact Bahamian tourism, and travel demand, by how much is almost impossible to predict.

A bonus for The Bahamas is that the early-April timing of Mr Trump’s tariffs will largely miss the peak winter tourism season, while Easter vacations have already mostly been booked - some years in advance. “The only thing I can say at the moment is this is a situation that is evolving and we are going to have to monitor it,” Mr Sands told this newspaper.

“This is new territory. Obviously it will have some impact on future travel, but we don’t know how much it will impact. We have to recognise the US is our primary market. I think it’s a wait and see. I’m always the sort of person who wants to monitor and see trends before drawing any unforeseen conclusions. We recognise there is some slowing down already taking place and we have to see how that manifests itself in the long-run.

“It’s still early, but comparing some days to previous days this month, there seems to be a differential with the booking pace but we cannot read anything into that recognising Easter was later than it was last year. We have to give it some time before we draw any real conclusions.”

Mr Sands explained that, with Easter falling in mid to late April this year, as opposed to end-March in 2024, “we will see some different occupancies on different dates. What I’m suggesting is that Easter will still be strong for The Bahamas as it has been traditionally. I think we have to see what impact this new situation will have on demand for travel to The Bahamas post-Easter”.

Meanwhile, Mr Trump’s move to levy a 10 percent tariff on all Bahamian exports to the US will likely impact around $400m worth of physical goods produced in, or shipped, via this nation. Bahamas National Statistical Institute (BNSI) data showed this nation exported $393.178m worth of goods to the US in 2023, and imported $3.26bn from its northern neighbour, giving the US a $2.867bn trade surplus.

Rupert Pinder, assistant professor of economics at the University of The Bahamas (UoB), told Tribune Business that the impact may not undermine the competitiveness of Bahamian exports to the US given that tariffs - which are taxes imposed at the border on imports coming into a country - have been levied on all nations. And The Bahamas has attracted the lowest rate.

“It’s not so much the 10 percent tax imposed on exports that’s the primary concern,” he explained. “It’s in terms of how long this whole tariff war is going to play out and the impact it’s going to have in terms of a potential global recession. This whole issue of tariff wars is not necessarily new. But there are so many things happening on so many fronts at the same time.”