By NEIL HARTNELL
Tribune Business Editor
A Cabinet minister yesterday said “old school businesses” will find it hard to remain relevant in a rapidly-changing world where services are increasingly the preferred product.
Dionisio D’Aguilar, pictured, minister of tourism and aviation, told Tribune Business that companies reliant on “selling stuff” such as retailers would have “a tough time” making it in an environment where The Bahamas’ visitor base was increasingly focused on finding new experiences.
Urging budding tourism industry entrepreneurs to focus on service-oriented opportunities, Mr D’Aguilar said: “There are a number of business people complaining that their business is not turning around, but the world is a changing place and what was relevant five to ten years ago is not so relevant today.
“So if you are in the business of selling retail and what I call ‘old school’ business, the world is changing. If I had to pick a business I would go into services. People want experiences. There are 6.6m foreign visitors wanting to buy experiences, see something new.
“If you’re business is all about buying stuff, as opposed to buying experiences, you may have a tough time, but if you’re selling a service you likely have a good future. If you’re going into business make sure you pick a business that’s relevant.”
Mr D’Aguilar’s comments came as he described Bahamian tourism as “hotter than it’s ever been”, with the early peak winter tourism season creating increased employment, incomes and business opportunities for Bahamians.
With Nassau/Paradise hotel rooms revenues up 48 percent year-over-year for January, the minister said: “The most important thing is occupancies, because if occupancies are up that translates into more jobs, additional monies in the hands of workers working in those hotels.
“It will inevitably have led to an increase in employment as the hotels could not have absorbed that amount of an increase without increasing the level of employment. It’s led to improved foreign currency reserves and, most important, it continues to buttress the level of optimism in the economy.
“You can never under-estimate how important optimism is to cause increased investment not only by non-Bahamians but Bahamians.... You have increased employment, more money in the hands of Bahamians, which is causing banks to consider lending again now they’ve had a chance to clean up their balance sheets,” Mr D’Aguilar continued.
“All of this contributes to an increase in the amount of hard, cold cash in the hands of Bahamians and causes local businesses to hopefully start to see a turn in their fortunes.”
The Central Bank of The Bahamas, in its just-released economic developments report for February, revealed that the peak 2019 winter tourism season started with major gains across all major hotel industry performance indicators.
Apart from the near-50 percent increase in Nassau/Paradise Island room revenues, room nights sold and occupancy rates rose year-over-year by 36 percent and 16.9 percentage points, respectively. The latter averaged 69.9 percent for January 2019.
And, besides volume-related improvements, the Central Bank’s report showed that yields and pricing power increased despite the greater room inventory supply, with average daily room rates (ADRs) up by 9.4 percent to $265.39 per night.
ThisIsOurs 4 years, 1 month ago
This is ALL US economy and nothing to do with anything anyone in the Bahamas did. We'll take the good nevertheless.
If there's an event that impacts the US economy negatively, it all goes to zero again. Service based business is correct but don't base it on the physical presence tourism model. Base it on something anyone in the world could use no matter where they are.
John 4 years, 1 month ago
Understood. So tourists don’t want to tote a lot of baggage behind them. So if someone goes into the straw market or purchases a wood carving, they should be able to have it shipped to their home address, at a reasonable cost, and meet it there when their vacation ends. So now the straw vendors, the wood carvers and the Bay Street merchants must form a union and go to the delivery services (UPS, DHL Ded Express Post Office And negotiates prices compatibles with Amazon. Get behind the eight ball
ThisIsOurs 4 years, 1 month ago
I'm not sure if that's even feasible. I'm saying there's a deeper analysis of the tourism numbers needed DAguilar always presents this narrative like he's done something miraculous in the past 2 years. And they've literally done nothing. It could all disappear in a poof if there's a terrorist attack or something such in the US.. I'm saying the new model should look for a goods and services that don't depend on a physical presence. Does Zuckerberg have to be in the Bahamas to get his share of advertising revenue from Bahamians? That's how we need to be thinking.
John 4 years, 1 month ago
The problem is/was that Amazon came in in the middle or the tail end of the recession. So some cannot tell what was the recession, what was Amazon or whether it was a combination of both. Even now as America records its lowest unemployment in 50 years the brick and mortar stores were still taking a beating and are only now showing signs of recovery as wages start to increase. ANd yes there is an opportunity for Bahamians to sell services and experiences rather than jsur products. The swimming pigs are an example, so is the Tiki Hut. Cycle tours and buggy tours are also becoming popular. But so are unique straw and woodcraft and so if a shipping service is offered at a reasonable rate then it will increase the value of these products. But watch what is happening in the tourist market in terms of segmentation. Sandals is advertising its own private island and the cruise ships are all seeking to develop their own ports So either they will operate gift shops, food outlets and recreational services themselves, or charge select Bahamians astronomical fees to operate. And they will find a way to get concessions to bring in all their equipment and supplies duty-free and the country or Bahamians will not benefit. And how many times will we fall in this same trap..'o because the tourists are so important to us.'
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