Hotels See Occupancy Increase In March Over 2010

Occupancy levels for Nassau and Paradise Island's 14 major hotels showed a major improvement in March, with an average 80.1 per cent rate, after February and January's business levels "failed to meet projections" set by the industry.

Bahamas Hotel Association (BHA) president, Stuart Bowe, revealed yesterday that the first quarter of 2011 overall saw major hotels on Nassau and Paradise Island experience an average 66.3 per cent occupancy rate compared to 67.2 per cent last year, with March "showing gains over January and February".

Arrivals in March were primarily responsible for the average occupancy rates for the quarter almost meeting 2010's figures. At 80.1 per cent this was several points higher than the 77.6 per cent average occupancy rate seen by major hotels in Nassau/PI in 2010.

January and February 2011 saw a much lower average combined occupancy rate of 59.1 per cent, compared to the 61.6 per cent seen in the same two months last year.

The average daily room rate (ADR) for January and February was $237 compared to $243.85 in 2010, and the room nights sold and room revenue were down 3.4 per cent and 6.1 per cent respectively.

The February 2011 average daily room rate (ADR) of $239.89 represented a decrease of $10.05 compared to February 2010.

However, room revenue overall decreased "only slightly" by 0.6 per cent due to a 3.5 per cent increase in room nights sold, combined with a 0.7 per cent increase in available room nights that offset the 4 per cent fall in the ADR.

"Only three properties show declines in all key business metrics with room revenues below February 2010. This compared to eight properties in January. Another four properties saw revenues decline due to losses in room nights sold despite increases in their ADR.

"Seven properties increased their room revenues either with a gain in ADR and room nights sold (three properties) or with a decrease in ADR and an increase in room nights sold," said the BHA.

Comparing this year's performance with pre-recession levels, room nights sold and room revenue in February 2011 for Nassau and Paradise Island's 14 major hotels remained down 16.5 per cent and 24.6 per cent respectively from 2008.

Mr Bowe said: "While major hotels in Nassau and Paradise Island reported that January and February failed to meet projections, in large part due to severe weather problems affecting travel, the industry anticipates making up for lost ground with stronger performances in March and April, particularly fuelled by strong consumer response to the re-introduction of the popular Companion Fly Free program.

"Hotels continue to be challenged in raising their rates to pre-recession levels due to competitive pressures throughout the global marketplace."

Mr Bowe said the BHA anticipates improvements to both hotels' occupancy and revenue over the next several months "as the industry on average continues to show marginal increases in revenue and occupancy".

He added that while it continues to be difficult to project growth beyond the near-term, the BHA is "encouraged to see an increase in advanced bookings for group business, a major part of our business which dropped significantly during the recession".

"Advance group bookings for this fall and into 2012 are encouraging. We are concerned about the rising price of fuel and its impact on travel costs, and this concern will figure into ongoing strategies by the Ministry of Tourism, BHA and the Promotion Boards," Mr Bowe said.

Source: The Tribune