Published On:Wednesday, April 13, 2011

By ALISON LOWE

Business Reporter

alowe@tribunemedia.net

Hotels in Nassau and Paradise Island suffered a 6.1 per cent slump in their revenues during January and February compared to 2010, due to lower occupancies and average daily room rates (ADRs), the Central Bank of the Bahamas said yesterday.

Leading tourism stakeholders blamed this outcome on bad weather in the US, which reduced bookings and increased cancellations during the post-Christmas period, along with a decision that was taken - and ultimately reversed - to stop the 'Companion flies free' travel promotion during this period.

Industry representatives had been expecting business conditions in the tourism industry to improve in general this year compared to last.

But despite this surprisingly poor performance in the early part of the year, director-general of tourism, David Johnson; Bahamas Hotel Association president, Stuart Bowe; and Baha Mar vice- president of external affairs and former BHA president, Robert Sands, said bookings have picked up and improved conditions are expected going forward.

Mr Bowe said: "We fully anticipate making up for lost ground in January and February based on what we are seeing in March and April, and advanced bookings over the next two months.

"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.

"A collective decision was made by the Ministry of Tourism and member hotels to reinstate the Companion Fly Free program, and as this kicked into gear in February we saw a difference in bookings, hence a further decision recently to extend the program."

Mr Johnson noted that bookings in the early part of 2010 received a special boost from the initiation of the 'Companion Flies Free' programme by the Ministry of Tourism and participating hotels, whereas the programme was briefly discontinued in January and February 2011.

He, too, pointed to bad weather in key tourism markets as another significant drag on bookings and hotel revenue.

"The nature of the winter we had resulted in many flight cancellations, so during peak periods things were disrupted and that cost us some occupancy," said Mr Johnson.

Mr Sands agreed that bad weather was a major factor, adding that lower average daily room rates - a "major determinant of yield" for hotels - are having a greater impact on revenue this year than occupancy levels overall, with many hotels offering attractive packages to lure visitors.

He added: "While we may not have reached the forecasted levels for this year, I think as a sector things are gaining momentum and we will get there. Certainly by the end of this winter period, we will exceed last year's position.

"It's still not bullish, but certainly we want to work towards some continued momentum. I think the Caribbean as a region is a bit slower in terms of getting back to normalcy, but it is and that's the important thing."

As for some of the elements contributing to instability in the global economy at present, such as economic woes in the Euro Zone and conflict in Libya and parts of the Middle East, Mr Sands said that such "variables can impact travel and you can't ignore them".

"You just have to operate within this environment and hope that you can navigate these various obstacles and still show a forward movement," he added.

"Overall we are optimistic that the forward momentum will continue throughout the year. Not in any big way, but it's going in the right direction."