The Tribune

BY ANNELIA NIXON

TRIBUNE Business Reporter

anixon@tribunemedia.net

HIGHER air fares and fees on international travellers could impair The Bahamas’ tourism growth by pricing visitors out of the market, particularly in the Family Islands, a hotel chief warned yesterday.

Patrick Harrington, Peace and Plenty resort’s chief executive and managing partner, said The Bahamas’ dependence on air and sea transportation makes the cost of getting to Exuma and other islands a critical factor in determining whether visitors choose to vacation in the country.

“We’re very concerned,” Mr Harrington said, noting that the issue extends beyond individual hotels to “every Bahamian and everyone who’s a stakeholder in The Bahamas”.

“The reality is, the country is a set of islands which means the only way people can get there is by air or by sea. They can’t drive there. And we know the vast majority of the people who are coming are coming by air,” he added.

Mr Harrington’s warning comes as the cost of travelling to The Bahamas remains a major issue for visitors, with air fares to the Family Islands already capable of reaching steep levels. He pointed to recent American Airlines fares from Miami to Georgetown, Exuma, that reached as high as $1,700 to $2,000 round-trip for a weekend despite the flight being only about 45 minutes.

Even when travellers secure lower fares, he said, round-trip tickets can still cost $500 or $600, creating a significant barrier before visitors have even begun spending money in the Bahamian economy.

“If you’re talking about adding, potentially for international flyers, another $130 or $150 in fees on to an already expensive air fare, undoubtedly that’s going to cause visitors to look elsewhere or to look for places where they can drive in the US,” Mr Harrington said.

He pointed to the Florida Cays as an example of how accessibility can influence tourism performance, noting that the destination recorded strong results during COVID-19 while The Bahamas struggled because Americans could drive there rather than having to board a plane.

Mr Harrington argued that policymakers should consider the broader economic returns generated when visitors can reach The Bahamas at a competitive cost, rather than focusing solely on revenue from higher aviation-related fees.

“The reality is, if it is made cost effective for passengers to get to The Bahamas, whatever that fee is, let’s say the fee is $60, $120, people most likely are going to spend $50 to $100 times that on their vacation, on their trip in The Bahamas,” he said. “That means, then, the Government would be getting 10 percent of that VAT.”

The warning comes amid proposed new and increased fees at the Exuma, North Eleuthera and Governor’s Harbour airports from January 1, 2027. International passengers would face $51 in passenger facility fees and $15 in processing fees, totalling $66 in new levies on top of existing government charges.

Aviation operators have warned that the costs will ultimately be passed on to passengers through higher fares, while the Government has said it is reviewing the proposed fee structure with Island Airport Development Partners, the three airports’ private operator, and industry stakeholders.

Dr Kenneth Romer, director of aviation, said airport development must remain commercially sustainable while preserving affordability and protecting The Bahamas’ wider airlift and tourism objectives.

The airport upgrades are intended to expand capacity and support increased tourism to Exuma and Eleuthera, but Mr Harrington’s concern is that higher costs to reach those destinations could undermine that very growth.

Mr Harrington said lower travel costs could generate greater economic activity across the tourism sector while also producing additional VAT revenue for the Government. He warned that higher costs could have the opposite effect by reducing visitor numbers and forcing hotels to respond with lower rates or promotional packages to remain competitive.

“If it turns out that people are going to other destinations, then we would be forced to do that,” Mr Harrington said, when asked whether Peace and Plenty would consider adjusting room rates. However, he added that there is limited room for Family Island properties to cut prices because of their comparatively high operating costs.

“Unfortunately we have very high operating costs of operating on an island, especially in the Out Islands,” he said. “So there’s only so much room where we can reduce rates before the business is no longer profitable.” Mr Harrington said the issue is particularly significant for Exuma, which he believes is approaching a period of increased tourism growth and investment.

He welcomed the construction of the new airport terminal in Georgetown, describing the development as positive for Peace and Plenty and the wider Exuma economy. The new airport, he added, could help attract more flights and passengers to the island. But Mr Harrington cautioned that improved airport infrastructure must be matched by affordable access.

“We just don’t want to see air fares going higher because then that is going to dampen that growth,” he said. Mr Harrington said Exuma and other Family Islands are gaining greater international exposure, and attracting more interest from prospective visitors, making affordability increasingly important.

“There’s more interest and more exposure of the Bahamian Out Islands,” Mr Harrington said. “So I think there are more visitors who want to come, but if they see extremely high air fares, that’s going to dampen that growth.”

For the hotel sector, he added, the concern ultimately comes down to the sustainability of visitor demand. “Anything that potentially could be restricting the flow of passengers to The Bahamas is not good for anyone in The Bahamas,” Mr Harrington said.