By NEIL HARTNELL
Tribune Business Editor
THE Minister of Tourism yesterday said 30 per cent of his marketing spend is tied up in long-term contracts that are failing "to put heads in beds".
Dionisio D'Aguilar told Tribune Business that the Bahamas' sponsorship of sporting events and teams was preventing him from "reallocating" desperately needed promotional dollars to market the Bahamas online.
With the Ministry's visitor data showing that almost two-thirds of the Bahamas' stopover visitors arrange their vacations via online booking engines and social media, Mr D'Aguilar effectively warned that this nation is being out-spent by rivals in a key area.
The Minister raised his marketing concerns just as data from the Bahamas Hotel and Tourism Association (BHTA) showed most of the industry's indicators were heading in a negative direction during the first eight months of the year.
Room revenue, room nights and air arrivals were all down by between 5-7 per cent for Nassau/Paradise Island hotels for the year to end-August, with occupancies, revenue per available room (RevPAR), and average daily room rate (ADR) also off against 2016 comparisons.
Mr D'Aguilar told Tribune Business that the figures were "a concern", but blamed the negative trends on a combination of Baha Mar's phased opening and loss of room inventory due to refurbishments at Atlantis's Coral Towers and the RIU Paradise Island.
He reaffirmed his primary goal of increasing higher-spending stopover visitor numbers, but indicated his marketing efforts were being frustrated by a lack of available funds.
"We've devoted everything, it seems," he told Tribune Business. "An enormous amount of funds has been devoted to sporting events, and sponsoring sporting teams. I don't think it's generated heads in beds, and there are a lot of funds in these contracts."
With almost two-thirds of the Bahamas' stopover visitor market booking online, Mr D'Aguilar added: "It shouldn't be difficult to work out that you have to focus on targeting engines like Expedia.
"This is where we need to direct our available marketing dollars, because this is where people go to search for vacations. We need to reallocate, but we're locked into these long-term contracts which don't allow things to adjust; LPGA, football teams...... Everyone knows of the Bahamas, but we need to go where people search for vacations."
While declining to reveal a dollar figure, Mr D'Aguilar told Tribune Business that around 30 per cent of his Ministry's marketing budget was locked into contracts ranging from two to five years in length.
The Minister's comments highlight the difference in tourism marketing approaches between Mr D'Aguilar and his predecessor, Obie Wilchcombe. The former is focused on targeting the online and social media space, like the last FNM tourism minister, Vincent Vanderpool-Wallace, while the latter was focused on a physical office network of Bahamas Tourism Offices (BTOs) and attracting major sporting events/teams to the Bahamas.
The latest marketing-related controversy has surfaced just as BHTA data shows the major Nassau/PI properties trending in the wrong direction. Room revenue for the eight months to end-August 2017 was down 7 per cent year-over-year, with only April (Easter's timing) and June posting like-for-like increases.
Stopover visitors to New Providence were off 6 per cent for the same eight-month period, with only April producing a year-over-year increase, while room nights sold were off for every single month - finishing August down 5 per cent for 2017 to-date.
RevPAR, a key indicator of hotel performance as it measures yield from available room inventory, was also down 8.7 per cent for the eight months to end-August, standing at $172.28 compared to $188.68 for 2016. RevPAR was off in seven out of eight monthly comparisons, only increasing in April due to the Easter timing.
Occupancies were also down for all eight months of 2017 to-date, closing the period at an average of 70.4 per cent compared to 75.4 per cent in 2016. While average daily room rate (ADR) was down slightly for the period, standing at $244.60 compared to $250.18, it did beat 2016 comparisons in four out of eight months.
Mr D'Aguilar, meanwhile, expressed concern again that the Bahamas' overall promotional efforts were too fragmented and thinly spread between the hotels, Promotional Boards and the Ministry.
"Our punch, our weight out in the field is spread between a number of engines," he told Tribune Business. "Whereas if you're Aruba, Jamaica or a single island destination, you've got one marketing product."
The Minister said the Bahamas' $50 million marketing spend was split between four vehicles in the shape of his ministry and the Promotion Boards, contributing to a lack of cohesion.
Mr D'Aguilar expressed optimism that "Nassau will be corrected when Baha Mar comes along", adding: "I'm anxious to get that online as quickly as possible."
He also took comfort in the improved Family Island performance, where resorts with 50 or more rooms had enjoyed a collective 25.2 per cent increase in room nights sold, and 10.7 per cent growth in available room nights, year-over-year for the eight months to end-August 2017.
Hotels in the northern and central Bahamas with less than 50 rooms had also enjoyed 12.1 per cent and 7.5 per cent increases, respectively, in room nights sold for the same period.