Tourism 'Cannot Maintain' Double Digit Growth Pace


Tribune Business Editor


The Minister of Tourism is targeting "high single digit" growth in stopover visitors for 2019, arguing that the ten to 15 percent full-year increase he forecast for 2018 "can't be maintained".

Dionisio D'Aguilar told Tribune Business yesterday that the 15.2 percent stopover visitor rise enjoyed by The Bahamas during the 2018 first half was of such magnitude that it would almost inevitably "taper off".

Explaining that it was hard for any business to "consistently" achieve "double digit" growth rates, Mr D'Aguilar said he expected the pace of stopover visitor increase to slow during the August-October period, which typically represents the tourism industry's leanest months.

He added, though, that the sector was expected to resume its first half momentum in the latter part of 2018 with the Thanksgiving and Christmas holidays, and forecast that full-year stopover growth would come in near to the 15.2 percent arrivals increase witness over the six months to end-June 2018.

"I think we'll probably, over these shoulder months as they call them, have single digit increases, and as we get to the latter part of the year we will experience double digit increases again," Mr D'Aguilar told Tribune Business.

"Overall stopover visitors will be up somewhere between 10-15 percent for the year, which is very impressive. I'm very encouraged by the first six months of the year."

But, when asked by Tribune Business whether the Bahamas' stopover tourism industry will maintain this pace in 2019, the Minister of Tourism responded: "Certainly not.

"The level of increase, that begins to taper off, as you can't maintain that level of increase consistently. High single digits will make me happy, and I remain hopeful."

Stopover visitors are the highest-yielding segment of the Bahamian tourism market, typically spending $1,500 per head every visit on average, compared to the $64 per capita that cruise passengers leave with this destination.

This makes stopover, or land-based, visitors the most valuable tourist category for the Bahamas. Mr D'Aguilar recently acknowledged as much when he said the 15.2 percent stopover visitor increase for the year to end-June translated into an extra 110,000 visitors, and based on an average $1,500 spend, some $165m being injected into the Bahamian economy.

He yesterday told Tribune Business he was further "encouraged" by hotel industry data which indicated that the much-feared room rate "cannibalisation" between Atlantis and Baha Mar - as a result of the latter's opening - had yet to materialise.

First-half performance statistics for Nassau/Paradise Island's largest hotels showed that average daily room rates (ADRs) were up 4.3 percent year-over-year, standing at $256.65 compared to $246.11, and beating 2017 comparisons in four of the six months.

Revenue per available room (RevPAR), a key hotel industry statistic measuring cash flow from inventory on the market, was also up on prior year figures, standing at $169.03 as opposed to $165.55.

Fears that Baha Mar may split, rather than grow, the market for high-end visitors with Atlantis have been present ever since the $4.2 billion Cable Beach development was conceived in 2003-2005.

Many observers were concerned that Baha Mar's full opening would create downward pressure on room rates at both New Providence's mega resorts and, potentially, other hotel properties, with none generating the profits they need to keep Bahamians employed and maintain a sustainable business model.

Mr D'Aguilar said the industry data suggested these fears were unfounded, adding of the figures: "It shows that the degradation of room rates that one predicted is not as significant; it hasn't gone down at all. That is a good trend and hopefully we can maintain that. Time will tell."

Room revenue generated by Nassau/Paradise Island's largest hotels was shown to have increased by 32 percent for the 2018 first half compared to the prior year, while air arrivals and room nights sold were up by 17 percent and 26 percent, respectively.

The only indicator down on 2017 was occupancies, which stood at an average 65.9 percent for this year's first half compared to 67.3 percent a year ago. The slight decline will likely have resulted from the additional room inventory brought on to the market by Baha Mar.

Breaking the stopover visitor increase down by island, Mr D'Aguilar said New Providence's 7.3 percent increase for the 2018 first half was eclipsed by both Abaco and Eleuthera, which saw growth of 16.3 percent and 29.6 percent, respectively.

Andros, the Berry Islands and San Salvador also saw stopover growth of 11 percent, 28 percent and 10.5 percent, respectively. Exuma's growth was more muted at 1.3 percent, while Bimini was down 7.3 percent.

As for visitor spending, Mr D'Aguilar said there was no data that suggested '"any movement" in per capita expenditure by cruise passengers. Acknowledging that this issue needed further study, he added that Global Blue, the company that handles the VAT-free shopping scheme for Bay Street merchants, indicated earlier this year it was processing more tax refunds - a possible indication of increased spending on luxury goods.

Besides Baha Mar, and its increased room inventory and new product, Mr D'Aguilar attributed 2018's stopover visitor growth to the buoyant US economy, his ministry's targeting of digital and social media marketing channels, and lingering hurricane damage in other parts of the Caribbean that had helped divert tourism to the Bahamas.


John 11 months, 1 week ago

This ain't the same Dionisio D'Aguilar who was doubling up and tripling the tax on the web shops aye..claiming they was making too much money..well muddoes what hypocrite! And the fact is Tourism hasn't but barely reached its half way mark yet, much less its peak. What substantial investment has the government made in the tourism plant in the last decade? What new avenues has D'Augilar and his ministry explored to grow the tourist product. if fact your government shut down the only single, major international event instead of trying to see how to better organize it and make it less costly, if not profitable. Did Atlantis cancel its summer basketball? no because they know the value of it and the value of having an annual event and drawing repeat visitors. There are presently 192 new cruise ships being built. The world aint getting no larger so some will eventually come here..Are you ready?


concerned799 11 months, 1 week ago

With such higher spends from stay over visitors vs cruise ship visitors, we'd be better off as a nation and a region simply kicking out all the cruise ships and thus restoring tourism to a land based product only (as it largely was in the past).


Dawes 11 months, 1 week ago

Basically agree, but i would not kick the cruise ships out, but charge them a much larger amount to come. That way there may be less but we should make more then what we do now. The government does not realise or use the power they have over cruise ships. If they dont want to come here then fine, but they will have to spend a lot more on gas to go elsewhere. And if you enter our waters and don't stop in one of our ports, thats a $100 per head charge. Stop in the port then its $30 or something like that.


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