The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A 28 per cent decline in per tourist spending yields since 2000 has resulted in "no growth" this century in the Bahamas' largest industry, the Minister of Tourism revealed yesterday.

Dionisio D'Aguilar told the House of Assembly that the decline in per capita visitor spending had offset the increased arrivals volume, resulting in a flat-lining of the sector's economic impact since the turn of the millennium.

"Visitor arrivals have grown by 48 per cent or two million persons since 2000, from 4.1 million to six million," Mr D'Aguilar said, "but the average spend per visitor has declined 28 per cent - from $586 in 2000 to $422 in 2015, meaning that the declining spend per visitor has significantly offset the total arrivals growth of the past 15 years.

"Thus, there has been no growth whatsoever in the number of dollars and cents these extra foreign visitors are dropping into our economy."

The Minister's remarks highlight why the Bahamas continues to find annual GDP growth so hard to come by, as its largest industry and private sector employer is simply either not growing - or not growing fast enough.

Describing the economic data as "quite troubling", Mr D'Aguilar's suggested that the Bahamas had been too focused on growing visitor arrivals at the expense of their economic contribution/impact.

Effectively, Bahamian tourism has become a volume business, while yields/margins have slowly declined. This stems largely from the fact that cruise passengers have driven the majority of visitor arrivals growth, while higher-yielding stopover numbers have remained frustratingly flat at around 1.5 million per annum.

Mr D'Aguilar yesterday said the $1,500 per stopover visitor spend was "more valuable" than the $69 yield per cruise passenger, "but the problem is that the number of stopover visitors has not grown in 30 years, remaining at approximately 1.5 million for that entire period.

"Any growth in our tourist arrival numbers has come from an increase in the number of cruise passengers, whom we now know spend far, far less than the more desirable stopover visitor."

The Minister added that cruise passengers accounted for 75 per cent of visitor numbers, but just 12 per cent of total spending, whereas stopover/land-based visitors produced 88 per cent of spending but accounted for only 25 per cent of the volume.

"Put another way, cruise ship passengers spend approximately $300 million in our country each year as opposed to the stopover visitors that spend $2.2 billion," Mr D'Aguilar said.

"Why, one might ask, are we providing millions upon millions in incentives to the cruise ship industry when the spending of their passengers pales in comparison to the passengers brought by air."

Mr D'Aguilar said the Ministry of Tourism was now focused on growing stopover visitors, given that they were essential to expanding an industry that generates 77 per cent of the Bahamas' US dollar earnings.

He also expressed concern that the Bahamas' tourist arrivals had only grown by an average 2.3 per cent per annum since 2011, a rate almost half that of the Caribbean's 4.3 per cent.

"The Bahamas is seemingly losing some of its allure as a destination of choice, as travellers become more adventurous and venture further south for something new, something different," he said.

To reverse the negative trends, Mr D'Aguilar said the Bahamas was placing reliance on the return to service of all 600 rooms in Atlantis's Coral Towers by April 2018, and the net 2,300 increase in New Providence's room inventory when Baha Mar fully opens at the same time.

To better co-ordinate promotional efforts, the Minister said he was seeking to pool the total $50-$60 million annual marketing spend by the Ministry of Tourism, Promotion Boards and individual hotels.

"The numbers reveal that, despite all of this spending, our stopover visitors are not growing probably because our message is confusing, and probably because our marketing dollars are spread too thinly over too many pots to be effective," Mr D'Aguilar said.

He argued that his 'pooling' plan would "allow for the more efficient and effective spending on our marketing message", and questioned whether something similar should happen with regard to the Internet.

"Each of these entities have their own websites," Mr D'Aguilar said. "Would it not be more effective for all of these websites, which are all costing thousands upon thousands of dollars to operate and manage, to all collapse into Bahamas.com?

"The tourism sector is now mercilessly competitive, and we must guard our marketing dollars jealously to ensure that they are spent on ensuring that any search on the worldwide web for a destination in the Caribbean leads back to the Bahamas."

Mr D'Aguilar added that the Ministry of Tourism would also seek to "reverse this downward trend" in per capita cruise passenger spending.

"I challenge our local entrepreneurs to figure out ways to develop, and create fun and innovative and interesting excursions to offer to the 4.5 million cruisers that touch down mostly in New Providence each year," he said.

"The Ministry of Tourism has done an excellent job attracting these types of visitors to our country, but we have failed to fully leverage the opportunities this has created."

Mr D'Aguilar said he would create a unit within the Ministry of Tourism to facilitate talks between the cruise lines and Bahamian entrepreneurs, and added: "I will try to convince the Minister of Finance to adjust the duties and other taxes to motivate cruisers to do more of their shopping here rather than further down in the Caribbean."