The Tribune

By NEIL HARTNELL Tribune Business Editor THE Bahamas Hotel Association's (BHA) president believes the industry will return room "rates to pre-recession levels much faster" than the world average, after a renowned travel research firm said this could take up to eight years. Responding to Tribune Business's questions, Stuart Bowe said that by not dropping its room rates by the same amount as many competitors, the Bahamian resort industry was better-placed to raise these "faster" than Caribbean and global rivals. "The Bahamas did not drop its room rates to the same degree as many of our competitors," Mr Bowe told Tribune Business. "We focused on offering value packages, knowing how long it takes to recoup dropped rates. During the brief recession following September 11, 2001, we maintained rates and found ourselves in a better position faster than most of our competitors. We are hopeful that we can recoup rates to pre-recession levels much faster than the industry average." A BHA survey released last week disclosed that collective hotel industry 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. Mr Bowe's comments indicate the Bahamian hotel sector is confident of beating that eight-year target, although he acknowledged that visitor "spending continues to be down, as reflected in our room rates. "We also continue to less spending on food and beverages," he added. "Global market forces, consumer demand and service delivery will dictate how quickly we can recapture rates." And, with 50 per cent of hotels surveyed by the BHA projecting increased rates for 2012, Mr Bowe added: "That shows increased confidence, both locally and globally. And a commitment by both public and private sector partners to improving customer service experiences throughout the continuum." Employment levels may take longer to rebound - especially since resorts have found ways to become more productive and 'do more with less' over the last four years. "The recession drove the industry to develop more cost-effective operations," the BHA president told Tribune Business. "The result is ongoing pressure between productivity and customer value, and each property has to develop its model. "Additional employment will be based on our ability to attract new business, and take care of the customers we have today. Word of mouth is still very powerful marketing, hence the need to create world class experiences that can only be found in the Bahamas." 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. Noting that the Bahamas' promotional offerings were continuing to "resonate well in the marketplace", Mr Bowe acknowledged that the fact 41 percent of Bahamian hotels surveyed by the BHA suffered a net loss in 2011 "underscores the vulnerability which still exists in our industry". This was especially so for small hotels, facing high labour and utility costs. "Our labour and utility costs trend higher than most of our competitors, hence our added focus on becoming more efficient and productive," Mr Bowe told Tribune Business. "We continue to work with our members and the related industries to reduce operating costs. This issue is not a short-term fix, and requires consistent collaboration to make a difference."