The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Hotel and Tourism Association (BHTA) yesterday warned that the resort booking pace for the 2013 first quarter was currently “behind” 2012 comparatives, although average occupancies for the Christmas/New Year period are expected to be 2-3 per cent up.

Responding to Tribune Business’s questions, Stuart Bowe, the BHTA president, said that despite the concerning early, it was still “too early” to predict the 2013 first quarter outcome with certainty.

Expressing hope that the booking pace would pick up as the period neared, Mr Bowe nevertheless said: “It’s too early to make firm projections, but the booking pace for the 2013 first quarter is behind the 2012 numbers, and we are hopeful that the period fills in.”

No explanations for the reduced booking pace to-date were provided, but possible factors are ongoing US consumer confidence ‘wobbles’ induced by protracted negotiations over Washington’s so-called ‘fiscal cliff’, plus Hurricane Sandy’s aftermath.

The storm’s lingering effects on the US north-east and coast, where 40-50 per cent of the Bahamas’ stopover visitor market comes from, may also have dampened demand for a vacation in this nation.

Either way, the bookings pace outlook will be of concern to both the Bahamian hotel industry and wider economy.

The 2013 first quarter represents the peak winter season, this year including Easter, and is when Bahamas-based resorts make the bulk of their profits. These earnings then carry them through the quieter periods later in the year.

Besides impacting resort finances, a quieter 2013 first quarter might also mean reduced hirings of temporary and contract workers, hitting the all-important employment metrics. If employment in the hotel industry, the Bahamas’ largest private sector employer, is down during the peak season, the ripple effects could be felt far and wide throughout the economy.

Still, the short-term tourism outlook appears better. Looking to the imminent Christmas/New Year period, Mr Bowe told Tribune Business: “So far, hotels are anticipating small increases in business over the upcoming holiday period.

“We expect it to be 2-3 per cent above last year in occupancy. Considering last year was a significant improvement over 2010, matching 2011 would be positive news.”

Looking back at 2012, Mr Bowe said the Bahamas’ wedding and marina markets had seen “double digit growth”, while group business had returned to close to pre-recession levels.

Noting that commitments had been made to continue the Air Fare Credit programme through until mid-2013, the BHTA president told Tribune Business: “Visitor arrivals and occupancies are nearing pre-recession levels. Room rates and visitor spending levels remain a challenge.

“We continue to be restrained in raising average room rates to desired levels. This is not just a Bahamas challenge. Hotels around the world are faced with the same challenge. Rates are projected to be flat.”

Noting that air fares and utility costs continued to be major challenges for the Bahamian hotel industry, Mr Bowe said the industry was hopeful US consumer confidence would soon improve.

“This year marked the return of group business to near pre-recession levels,” he told Tribune Business. “We’ve hosted successful sporting events and conferences, and continue to tap into new markets.

“The wedding and marina sectors had double digit growth, and plans are in place to expand sports, medical, religious and domestic tourism.

“We need a renewed focus on the tourism service continuum, and the educational needs of persons both inside and entering our industry.”

Mr Bowe added that the BHTA had made numerous recommendations for reducing energy costs, and was set to “implement a major energy efficiency project” for the hotel sector in the New Year.

While occupancies were “up slightly on average” for the Thanksgiving weekend compared to 2011, Mr Bowe said early November was “softer than anticipated” due to Hurricane Sandy-related cancellations.

“We expect the final results to be slightly below projections, but occupancy will be slightly comparable to 2007,” Mr Bowe told Tribune Business. “We expect a slight decline in room rates.”

And he added: “The fact remains that we are living in a value-driven time, and everyone in the global tourism industry is offering incentives to capture business.

“Our behaviour is driven by this until we see global conditions change. We do know that poor service experiences negate the effects of marketing dollars, hence the need to commence massive re-training and create unique experiences for our visitors.”