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Bahamas Must Target 70% Cruise Visitor Ratio

A well-known hotelier says The Bahamas must do a better job on cruise passenger “conversion” and increasing the number of resort rooms if it is to maximise tourism’s economic benefits.

Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, told the Prime Minister’s Office’s weekly briefing that this nation needs to place more focus on encouraging cruise passengers to return to this nation as higher-spending stopover visitors.

He argued that The Bahamas needs to target a 70/30 visitor mix, weighted in favour of cruise visitors, as opposed to the existing 80/20 split. Although the country has welcomed more than 7.2m arrivals for the first nine months of 2023, over 80 percent were cruise passengers and the number of stopover visitors is still “lagging” slightly behind 2019’s pre-COVID record numbers.

The BHTA president said: “The 7.2m visitors to September was represented in principle by close to 5.8m in cruise visitors to the destination at 81.5 percent of the total arrivals.

“This number is very good for us, but I think it also creates significant opportunities for the destination when we look at stopover visitors to-date, who are lagging slightly behind our 2019 numbers at 1.3m and representing 18.5 percent.”

Mr Sands explained that the average stop-over passenger spends about $2,700 during their visit to The Bahamas, while the average cruise passenger spends $85, so converting more cruise passengers to the land-based variety will ensure tourism delivers an even greater economic impact.

He said: “It would be very good if we can work on increasing the conversion of a percentage of these cruise passengers to stopover visitors, thereby giving us a much better mix of cruise and stopover visitors, which should really be in the area 30 to 70 percent. It will also give us the opportunity to increase spending when we look at the spend of a cruise passenger versus the spend of a stopover visitor

“For example, this year, the cruise passenger spending approximately $85, a stopover visitor spending close to $2,700. So the conversion of five to 10 percent of those individuals… would have an incremental and positive impact on revenues for the country.”

Mr Sands said the biggest obstacle to increasing stopover visitors is a reduction in available rooms by 25 percent. The reopening of the British Colonial hotel next month will increase New Providence’s room inventory by 350 rooms alone. Inventory has also been impacted by the closure of the Melia Nassau Beach Resort, and its subsequent demolition, and the Atlantis Beach Towers closure for Somewhere Else.

He said: “We have over 35 to 40 percent market share of all cruise visitors to the Caribbean. Our biggest opportunity lies in increasing our stopover visitors, and that has been hampered most directly by a reduction in available hotel rooms. Some 25 percent of our inventory is down as a result of a number of reasons.

“We are aware of Melia, we are aware of hotels in Grand Bahama, Paradise Island. Fortunately, we have British Colonial coming online in December of this year, which will bring an additional 350 rooms to inventory.”

Mr Sands added that hotels have seen an increase in their occupancy levels by ten to 15 percent, and that having more rooms available will “{augur well” for the sector.

He said: “The hotels that that are currently operating have achieved significant increases in their occupancy levels as well as in their average rates. We would have seen occupancy levels increase by anywhere from ten to 15 percent for the period today, but you can’t get over a particular threshold if you do not have the number of inventory of rooms available.

“The thrust to have more hotel rooms available will augur well for much greater stopover arrivals to the destination, and a much more financially successful result as a result of the spend of those individual persons coming to the Bahamas”

Mr Sands said discussions between the Government and Baha Mar about the Melia’s replacement are at a “very advanced stage” and plans will be announced once they are “concretised”.

He added: “I can say that Baha Mar is in negotiations and discussions with the Government of The Bahamas and, as soon as those plans are finalised, I think there will be a joint announcement as to what in fact will happen there. I think those discussions are at a very advanced stage, and we are hopeful that an announcement can be made as soon as they have been concretised.”

Mr Sands said the short-term rental market’s growth has helped compensate for reduced hotel room inventory, and said cruise passenger conversion rates will improve in tandem with enhanced guest experiences.

He added: “A segment that is doing very well, and we will continue to encourage them, is the Airbnb segment, which obviously the Government is looking at to see how they can be registered and have a better handle on their impact on the economy.

“But certainly, between that sector and the stopover sector, to have achieved 1.3m, which is almost maybe 10,000 off the number for 2019, I think it’s commendable with reduced inventory.

“Conversion happens as a result of multiple issues – engagement, visitor satisfaction in the destination, guest experiences in the various ports of entry and, as these improve, so does the conversion element. Also, direct contacts through marketing efforts by various brands that exist throughout the islands.”

By Fay Simmons- Tribune Business Reporter