0

Bahamas Is Caribbean's Top Tourist Market Share Loser

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas has lost the greatest tourism market share of any Caribbean nation in the post-recession years, an International Monetary Fund (IMF) report has revealed, with this nation ranked as the region’s most expensive.

An IMF working paper, ‘Revisiting tourism flows to the Caribbean: What is driving arrivals’, discloses that the Bahamas’ share of the tourism market declined by 3 per cent between 2007 and 2013 - the biggest drop in the Caribbean.

Only Barbados suffered a drop of similar magnitude, with those countries enjoying the greatest increase in market share being the low cost destinations of Jamaica and Barbados - (almost 2 per cent and 4 per cent growth, respectively).

The IMF paper’s findings will provide further ammunition to those already concerned about the Bahamas’ economic competitiveness in tourism and a whole range of industries, as it adds to the perception this nation is a high cost destination that is pricing itself out of the market.

The authors also gave an insight into the forces impacting Bahamian tourism, finding that “price and incomes” had “a significant impact” on visitor arrivals to this nation and the Caribbean.

Yet they noted that price was not a major consideration for the high-end market - the segment the Bahamas is concentrated in.

And the IMF paper also warned that “non-price factors” - experience quality, culture - needed to be superior to price to ensure visitors received value for money. This touches on yet another Bahamian concern.

“Using data covering the period 2000–2013 for 16 Caribbean countries, the paper finds that both price and income factors are found to have a significant impact on tourism arrivals and expenditure, although price elasticity is found to be statistically insignificant for high-end destinations. The number of airlines also has a statistically positive impact on arrivals and expenditure,” the IMF paper said.

“A simple static comparison of 10 Caribbean countries with 18 other beach holiday destinations in the world (including Cancun and Puerto Rico) in 2014 finds that the nominal cost of an ‘average’ beach holiday in the Caribbean is higher than in other parts of the world.

“The result suggests that non-price factors would need to be superior to ensure that the marginal cost of a holiday in the Caribbean does not exceed the marginal benefit.”

The Bahamas was ranked as the costliest destination of the 28 sampled by the IMF paper, which will come as little surprise to many in the resort and tourism industry.

Tribune Business recently revealed how Nassau was ranked as the fifth most expensive city in the world for hotel accommodation.

A survey of 150 cities by GoEuro, a Berlin-based travel search website, and its Accommodation Price Index ranked Nassau behind just New York, St Moritz (Switzerland), Macau in China and Miami when it came to the average price of hotel accommodations.

The IMF paper indicated that the Bahamas was the second most tourism-reliant nation in the Caribbean, behind Anguilla, with the industry accounting for 27 per cent of this country’s tourism receipts.

It showed how tourism arrivals to the Bahamas moved almost exactly ‘in sync’ with US GDP and unemployment growth rates, again not surprising given this country’s dependence on the US for 80-85 per cent of its visitors.

“Historically, economic cycles in advanced economies were transmitted rapidly to the Caribbean through the tourism sector, and this relationship persists today in countries dependent on arrivals from the US (the Bahamas, Belize, St. Kitts & Nevis) and the UK (Barbados, Antigua and Barbuda),” the IMF said.

“However, the great recession left a more profound impact. With output contracting sharply in the US, Canada and the UK, unemployment at elevated levels for many years, and US household net wealth depressed, tourism arrivals fell sharply after the crisis and have remained weak since.”

The IMF paper also showed how tourist arrivals to the Bahamas, which had increased by close to 10 per cent in the years 2002-2007, had fallen by a similar amount between 2008-2013.

And, while this nation’s tourism receipts (earnings) had risen by around 25 per cent between 2002-2007, they had shown zero to no growth between 2008-2013.

“The Caribbean share in the global tourism market has continued to decline, falling to about 2 per cent in 2013 compared to about 2.5 per cent in 2000,” the IMF paper said.

“However, within the Caribbean there are some notable exceptions, namely Belize, the Dominican Republic, and Jamaica, where performance has been resilient. As a result, there has been a shift in market share within the Caribbean.”

This shift has been towards the lower cost destinations and away from the likes of the Bahamas, which provides a potential taste of what may happen when Cuba fully opens to US travellers.

With its lower costs, greater hotel room inventory and appealing culture, Cuba would be well-placed to take market share from the Bahamas, especially as this country’s resort capacity has been declining in recent years.

“While tourism supply expanded in the early and mid-2000s, weaker demand for tourism after the global financial crisis pushed capacity rates down in many Caribbean markets and lowered incentives to invest in new tourism development,” the IMF paper said.

“In a few countries (the Bahamas, Barbados), room capacity has declined in recent years and overall, the number of flights to the Caribbean region dropped steadily.

“Airline companies are reluctant to reinstate or embark on new connections without guarantees that seats will be filled. This is a critical issue to small island economies, which are almost fully dependent on air transport access, and flight changes can have a large, disruptive impact on small tourism markets.”

The Bahamas is pinning its hopes on the $3.5 billion Baha Mar project to turn this situation around.

Comments

Well_mudda_take_sic 3 years, 9 months ago

Of course that dumb waffling shuffling arrogant incompetent "can't get it up" idiot Christie sees no need for him to respond in any way to the noose the rest of the world is tightening around the neck of our squawking tourism goose that can no longer lay any golden eggs. Baha Mar, Atlantis, etc. will all be doomed if they don't soon pool their resources behind their one true common interest which should be the imminent demise of the political careers of Christie and all of the current members of parliament whether they be MP's or Senators and whether they be PLP or FNM. Successive FNM and PLP governments have demonstrated time and time again their: (1) inability to significantly reduce the current level of crime; (2) unwillingness to improve the educational system; (3) unwillingness to create a level playing field and atmosphere conducive to the formation of profitable small and medium size business enterprises (thereby generating new jobs); (4) inability and unwillingness to stamp out government sponsored corruption and crony capitalism; and (5) inability to manage the country's finances. In fact, when it comes to reducing crime, we instead see the Christie led PLP being only too eager to legalize the corrupt racketeering activities of the local gambling web shops. For many years now our law enforcement agencies under both the PLP and FNM governments have allowed well known criminals (the numbers' bosses) like Craig Flowers to run their criminal enterprises out in the open in exchange for political gifts, bribes and pay-offs of one kind or another. Christie, Davis, Maynard-Gibson and Wilchcombe have allowed such criminal elements to eat away at the social fabric and well being of our society to the point where only dumb tourists with very limited financial means show any interest in visiting our shores. Atlantis, Baha Mar and others had better soon wake up or they will soon find the rug has been pulled out from under them in the same way it has been done for our country's financial services sector which has now been just about decimated.

2

SP 3 years, 9 months ago

............................................ There Is Nothing To Do Here ! ...........................................

Dumb-ass PLP and FNM have done nothing to maintain and improve our tourism product after 40 years.

There is more entertainment targeting tourist in two city blocks in Havana alone than in the entire Bahamas combined.

Leading Bahamian entertainers and others with hands on experience have been begging and pleading with PLP & FNM administrations for decades to pay more attention and revitalize Bahamian entertainment and resort activities for tourist to no avail.

Our country has been undeniably led by dumb and dumber idiots who obviously never understood tourism and were too ignorant and pig headed to even look at regional competitive destinations and copy what they were doing that enabled them to surpass us.

How can the PLP & FNM explain the rise and diversification of regional resort destinations

Theme park Proposal after tourist activity proposal after well funded resort entertainment proposal after proposal after proposal after proposal after proposal have been denied by the PLP and FNM administrations just because the Bahamian involved were on the wrong side of political fence or the right politically connected friend, family or lover were not involved.

The PLP and FNM have no acceptable excuse for the total failure in tourism except cronyism, asinine political stupidity and corruption.

0

ObserverOfChaos 3 years, 9 months ago

Congrats Bahamas as you have reached another "list of notoriety" thanks to your high levels of incompetence, failed leadership, corruption, crime, and the list goes on! Now wonder people (including myself) spend most of my monies elsewhere......Sad but true.....

0

jamaicaproud 10 months, 1 week ago

Tourism cannot grow in a place where people are paranoid about immigration. There are many of Us who live in other countries who would visit, but don't want to feel targeted by haters.

0

Sign in to comment