Annual BHA report highlights profitability challenges with particular need to boost value proposition
Nearly three-quarters of hoteliers expect revenue gains this year and most continue to invest heavily in capital spending, according to the annual report from the Bahamas Hotel Association (BHA).
The Annual Industry Performance and Outlook Survey, based on responses from a diverse crop of 22 businesses on New Providence, Grand Bahama and the Out Islands, confirms the sentiments of most industry leaders going into 2012.
Nearly one-third expect to hire more staff this year, the report said, and only five percent of those surveyed possessed a "negative" outlook.
While only 55 percent experienced revenue increases in 2011, a promising 72 percent believe the bottom line will rise this year.
"Based on comments we received from members responding to the survey, the increase in 2012 bookings is primarily attributed to the indicators in the U.S. economy, the return of group business, and additional airlift," Stuart Bowe, the president of the BHA, told Guardian Business.
"This year we will benefit from a full year of service from the Latin American market through Copa Airlines. We'll have additional airlift from the New York City market with JetBlue's Westchester flights and the return of Delta's LaGuardia flight on March 2. The Family Islands and Grand Bahama are also seeing additional airlift."
The revival of airlift comes as welcomed news for industry leaders.
In January, Guardian Business reported air arrivals for 2011 experienced a 2.9 percent decline. A strong November, according to the Ministry of Tourism, helped contribute to a relatively modest drop.
In 2011, according to the recent BHA report, 41 percent of respondents had a net loss, down from 51 percent in 2010. These results indicate that a recovery seems to be on the horizon, although it could take time to reach pre-recession levels.
Profitability remains a top concern for hoteliers, Bowe said.
"While our industry continues to be challenged, particularly by high operating costs and aggressive competition, the worst of the recession appears to be behind us," he added. "Since 2010, the industry has recorded marginal gains in revenue, occupancy and customer satisfaction."
The latter, linked with the concept of value, appears to be a chief concern of those in the industry.
In 2011, capital spending rose among 50 percent of hotels in The Bahamas, and 63 percent plan to spend the same this year. Meanwhile, 27 percent expect to spend more.
The approach appears to be working. In addition to an improvement in those who suffered a net loss, 70 percent of respondents reported an increase in room occupancy.
An impressive 85 percent expect occupancy gains this year. The BHA president, however, remained realistic in the report.
He acknowledged that hotels are still struggling financially, making promotional efforts and marketing more crucial than ever.
"Had we not invested more in marketing and promotions during the past year, we would not have seen the reported incremental improvements in business. These improvements have helped many hoteliers to weather the recession and maintain employment levels. We must continue to be diligent in 2012 if we are to see further improvements," he said.
The Nassau Guardian
Published: March 2, 2012