The Tribune

By NEIL HARTNELL Tribune Business Editor Although more than half of this nation's hotels are positive on their 2012 outlook some 41 per cent still suffered a net loss last year, the Bahamas Hotel Association (BHA) yesterday unveiling a survey that was tinged with both optimism and challenges. Detailing its annual industry performance and outlook survey results, based on responses from 22 large and small Bahamas-based hotels in Nassau, Grand Bahama and the Family Islands, the BHA said sector confidence - while still off from the 2007-2008 'banner period' - was improving despite some continuing negatives that it faced. From a workforce perspective, the BHA survey generated some encouragement by disclosing that almost one-third of resort properties surveyed - some 32 per cent - projected increased worker hiring in 2012. This matched the percentage who reported they would hire more staff last year for 2011. This represented a "significant improvement" from 2009, the BHA said, when 84 per cent of Bahamas-based resorts reported a fall in employment levels. However, industry staffing levels remain below those in 2007-2008, especially as resorts have become more productive and learned to do more with less. On the down side, some 41 per cent of resorts surveyed by the BHA reported a net loss for 2011, although this was down from 51 per cent in 2010. Global competition, coupled with the need to offer discounts and promotions and the traditional 'bugbears' of high labour and energy costs, were all combining to hold back average daily room rates (ADRs). Yet, on the plus side, some 59 per cent of the 22 Bahamas-based resorts surveyed reported a net profit in 2011. And, while just 9 per cent were able to generate price and room rate increases in 2011, some 50 per cent were targeting price rises in 2012. Stuart Bowe, the BHA's president, said in a statement: "While we are encouraged, it is clear that many businesses are not yet out of the woods. The profitability picture is further constrained because higher airfares have forced hoteliers to restrain from increasing prices, and to invest more resources in marketing and promotional offers. These are the fundamental business realities which face the hotel industry today. "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. The 'value proposition' which the new consumer expects has extended beyond getting a good deal. Today's consumer also expects an exceptional customer service experience" The BHA survey noted that collective hotel revenues dropped by 17.5 per cent between 2007 and 2010, falling from a high of $504 million to $423 million. Hotel revenues peaked at $510 million in 2008, hitting a $408 million low in 2009, and Smith's Travel Research had warned that it could take as long as eight years for room rates to recover. There was positive news on the occupancy front, where 85 per cent of hoteliers surveyed expect gains in this indicator in 2012, following a year in which 70 per cent saw such increases over 2010. The BHA said this was "a stark contrast to 2009, when 85 per cent reported a drop in occupancy and 2008, when 78 per cent of hotels experienced a decline in occupancy levels". As for revenues, some 55 per cent of properties saw a 2011 increase, while 72 per cent of those surveyed projected further growth in 2012. Another 23 per cent projected flat year-over-year revenues for 2011, "a turnaround from 2009's actual performance when 85 per cent reported a decline in revenue and 62 per cent indicating revenue declined significantly". When it came to capital investments, 50 per cent of the BHA's survey respondents increased their spend in 2011, with 23 per cent reducing it. Described as "the biggest increase in recent years", the survey found that 27 per cent of hotels aimed to increase capital spend in 2012, with 63 per cent keeping it at 2011 levels. The BHA survey added: "Hoteliers were also asked about their outlook for tourism over the next 12 months and a dramatic shift in outlook has occurred. "When asked the same question in 2009, 74 per cent of hoteliers had a negative outlook for the next 12 months, and another 17 per cent had a fair outlook. For 2010, 69 per cent had a fair outlook and 16 per cent had a positive outlook. "Fifty-five per cent have a positive outlook for the industry in 2012; 40 per cent report a fair outlook. Only 5 per cent express a negative outlook for 2012." Mr Bowe added: "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. "Since 2010, the industry has recorded marginal gains in revenue, occupancy and customer satisfaction. This is most evident in 2011 performance reports and projections for 2012 improvements in sales, occupancy, room rates and capital spending, as well as, reports by some hotels of increased employment levels. When benchmarked against performance reports since 2007, we are clearly moving in the right direction." He added: "While investments continue to be made in improving customer service through in-house training and a revamped Bahamahost program, more must be done. "We must continue to challenge ourselves to improve the visitor's experience, from arrival at our airports, transfers in taxis and coaches, all elements of the hotel stay, time spent shopping, dining and enjoying our local attractions....the entire tourism continuum experience must be exceptional."