By NEIL HARTNELL
Tribune Business Editor
Tourism will be the dominant driver of Bahamian jobs and GDP “for mine and the next generation”, a senior Baha Mar executive predicted yesterday, with international forecasts potentially under-estimating the project’s jobs impact.
The World Travel and Tourism Council (WTTC), in its annual assessment of tourism’s likely impact on the Bahamian economy in 2017, predicted that the sector’s direct GDP contribution will grow by 3.4 per cent to $1.835 billion this year.
It also forecast that Bahamian jobs generated directly by tourism will grow by 2,000, or 3.3 per cent, to 55,000 in 2017 - yet this, especially, could be an under-estimate if Baha Mar delivers on promised hirings.
The development’s new owner, Chow Tai Fook Enterprises (CTFE), has pledged to hire around 4,000 Bahamians by year-end, a total that will more than double the WTTC estimates should the Hong Kong-headquartered conglomerate succeed.
It is unclear whether the WTTC’s forecasts took into account the loss of jobs at Memories and the Grand Lucayan in Grand Bahama, the report’s release timing suggesting this is unlikely, but Baha Mar could exceed its forecasts - especially when it produces a full first year of operations in 2018.
CTFE’s own projections, seen by Tribune Business, forecast that Baha Mar will generate a minimum of 5,750 jobs annually once it becomes fully operational, while helping to create a further 4,160 indirect jobs.
Baha Mar’s annual wages impact is estimated at $98 million, with the salaries for positions created indirectly standing at $69 million - creating a total employee compensation impact of $167 million.
These estimates are significantly more optimistic than the WTTC’s projections for the Bahamas, which forecast: “Travel and tourism generated 53,000 jobs directly in 2016 (27.3 per cent of total employment), and this is forecast to grow by 3.3 per cent in 2017 to 55,000 (27.9 per cent of total employment).
“This includes employment by hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). It also includes, for example, the activities of the restaurant and leisure industries directly supported by tourists.”
Looking ahead, the WTTC report suggested that the Bahamas will become ever-more dependent on tourism to generate the majority of this nation’s jobs.
“By 2027, travel and tourism will account for 70,000 jobs directly, an increase of 2.5 per cent per annum over the next 10 years,” the analysis, obtained by Tribune Business, says.
“The total contribution of travel and tourism to employment (including wider effects from investment, the supply chain and induced income impacts) was 102,500 jobs in 2016 (52.9 per cent of total employment). This is forecast to rise by 3 per cent in 2017 to 105,500 jobs (53.9 per cent of total employment).
“By 2027, travel and tourism is forecast to support 135,000 jobs (64.9 per cent of total employment), an increase of 2.4 per cent per over the period.”
Robert Sands, Baha Mar’s senior vice-president of government and external affairs, told Tribune Business that tourism would “certainly be a significant share of GDP in the Bahamas going forward”.
The extent of this, he added, depended on whether the Bahamas sought - and successfully achieved - further diversification of its economy.
However, Mr Sands said: “Tourism has consistently been in excess of 50-60 per cent of GDP in the country for many years, and I don’t see that changing in the foreseeable future.
“I don’t see that changing, certainly in mine and the next generation. The pillars of employment in this country have, and will be, tourism and hospitality, with banking coming in second.”
Mr Sands said the WTTC’s economic forecasts were likely to be upgraded next year after it witnessed the impact of a fully operational Baha Mar.
“You can look at the position changing, certainly, when we’ve had a full year of stable Baha Mar operations,” he added.
The WTTC report shows that the Bahamas is the world’s third-most reliant nation on tourism’s direct employment impact, sixth most-reliant on its overall jobs impact.
When it comes to tourism’s direct and indirect contribution to GDP, the Bahamas also ranks in the world’s top 10 in relative terms.
“The direct contribution of travel and tourism to GDP in 2016 was $1.774 billion (19.8 per cent of GDP),” the WTTC said of the Bahamas.
“This is forecast to rise by 3.4 per cent to $1.835 billion in 2017..... The direct contribution of travel and tourism to GDP is expected to grow by 3.6 per cent per annum to $2.62 billion (24.8 per cent of GDP) by 2027.”
The $60 million increase in tourism’s contribution to Bahamian GDP in 2017 is dwarfed by Baha Mar’s projected annual GDP impact of $582 million alone, although much depends on the extent to which this comes through as the property ramps up towards winter 2017-2018.
“The total contribution of travel and tourism to GDP (including wider effects from investment, the supply chain and induced income impacts) was $4.017 billion in 2016 (44.8 per cent of GDP) and is expected to grow by 2.9 per cent to $4.134 billion (45.7 per cent of GDP) in 2017,” the WTTC added. “It is forecast to rise by 3.5 per cent per annum to $5.819 billion by 2027 (55.1 per cent of GDP).”