The Central Bank has cited reduced occupancy and average room rates as the cause of the revenue contraction.
If any economic recovery in The Bahamas depends on the tourism industry, the nation may have to wait a little longer, as key tourism indicators are showing a 6.1 percent drop-off in hotel revenues on Nassau and Paradise Island for the first two months of 2011.
The news of the year-on-year revenue fall-off in the hotel sector comes at a time when many are hoping for positive signs that a strong economic recovery is underway after the recession the country fell into in 2007. At least for the vital hotel sector, there are good indications of a turnaround in the immediate future, according to Stuart Bowe, president of the Bahamas Hotel Association (BHA).
The news of the decline in hotel revenues came from the Central Bank of The Bahamas’ Monthly Economic and Financial Developments (MEFD) report for February 2011. It was based on data gathered from a sample of hotels on New Providence and Paradise Island. The report cited reduced occupancy and average daily room rates as the underlying cause for the revenue contraction.
Bowe echoed these sentiments but provided some more insight into the reasons for the revenue contraction.
“Early in the year we were impacted by severe weather in major markets which closed airports. We were constrained as well by market conditions affecting room rates,” Bowe said.
The recent announcement that the Tourism Ministry’s Companion Fly Free program was being extended is expected to have a positive impact on visitor arrivals and aggregate spending. According to Bowe, the extension of the program in February may have been behind the uptick in bookings seen after the program’s reinstatement then. The extended program allows for visitors to book up to May 9, 2011 to take advantage of the program for travel between April 24 and December 22, 2011, according to www.bahamas.com.
In January of this year, Guardian Business reported that Director General of Tourism David Johnson said special initiatives from a partnership with the Nassau Airport Development Company were afoot with a view to increasing visitor arrivals via the Lynden Pindling International Airport (LPIA). He was tight-lipped on the details of those initiatives, citing market competition as the reason for the hush.
The Nassau Guardian