Hotel Occupancy Increase Still Below Pre-Recession Numbers

Friday, 13 November 2009 00:00 News Editor
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The Bahamian hotel industry yesterday warned that the year-over-year 7.9 per cent room revenue and occupancy gains achieved in September were still "considerably below pre-recession levels", with 12 of 14 properties included in the survey reporting net losses for the year-to-date.

A joint Ministry of Tourism and Bahamas Hotel Association (BHA) statement said the 14 major New Providence resorts generated a 38.9 per cent occupancy rate for September, compared to 31 per cent in 2008.

They said the resulting 4.8 per cent increase in hotel room nights sold, combined with an increase in average daily room rate (ADR) of almost $5, generated a 7.9 per cent room revenue gain.

The Ministry of Tourism and BHA said that for September 2009, the ADR was $164.44 compared to $159.75 last year. Available room nights decreased by 16.5 per cent, reflecting the closure of rooms at Baha Mar's Wyndham property on August 17 and the RIU property in September.

While 10 of the 12 reporting properties recorded a modest September increase in room revenue, the Ministry of Tourism and BHA said: "However, September's positive performance did little to reverse the third quarter performance, and reflects primarily a year-over-year comparison with September 2008, the starting point for the worst tourism cycle since 1991 and the first Iraq War.

"The third quarter occupancy was 60.1 per cent compared to 61.9 per cent in 2008. Room nights sold and room revenue were 11.8 per cent and 20.6 per cent below last year's third quarter levels. The ADR recorded was $200.51 compared to $222.94 in 2008."

For the first nine months to end-September 2009, the Ministry of Tourism and BHA said hotel occupancy stood at 63.5 per cent compared to 68.9 per cent last year.

The ADR was $230.35, while January to September last year was $254.42. Hotel revenue fell 21 per cent, with 12 of the 14 hotels reporting losses for the year so far. Hotel room nights sold decreased by 12.8 per cent.

The latest preliminary air arrivals to the end of August for New Providence showed a 9.3 per cent decrease or 71,812 fewer foreign air arrivals than in 2008.

The Ministry of Tourism and BHA said: "While the hotel industry welcomed the improved performance in September, the Bahamas Hotel Association advises that it must be taken in context. The Bahamas experienced a high level of cancellations and lost bookings last year as a result of a major hurricane threat. This was followed immediately by the precipitous collapse of the US financial markets, cancellations of group business and a halt in impulse travel.

"While the average daily rate for September inched up and revenue per available room has increased, they remain considerably below pre-recession levels and point to the continued vulnerability of the industry.

"The year-to-date revenue picture continues to concern hoteliers, with the cumulative effect continuing to force management to remain prudent operationally and placing similar constraints on Government. Most of the hotels which experienced occupancy growth in September also experienced shorter stays by guests. This may add to the overall visitor arrivals numbers for September."

The statement added: "The outlook for the industry remains cautious. One month's performance is not a trend, and the next several months should determine the extent to which optimism may be returning.

"The industry continues to monitor US economic performance indicators, a number which are beginning to show signs of improvement, the latest being an announcement that US GDP should be higher than previously anticipated. As US consumer confidence rebounds and unemployment levels drop, the Bahamas will see an acceleration of its tourism industry's recovery."

Source: The Tribune