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Hotels: ‘We’Ve Never Seen This In Ten Years’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Nassau/Paradise Island hotel industry has “rebounded with gains not seen for ten years”, it was revealed yesterday, as room revenues closed 2018 up 34 percent year-over-year.

Robert Sands, pictured, Baha Mar’s senior vice-president of government and external affairs, told Tribune Business that last year’s momentum had been maintained through “a very strong 2019 first quarter” with most tourism industry participants confident these trends will hold for the full year barring any hurricanes or unanticipated economic shocks.

With average daily room rates (ADRs) and revenue per available room (RevPAR) ahead of 2017 comparatives in eight and seven months, respectively, of 2018, Mr Sands said “all parties are benefiting” from the increase in visitor numbers and spending.

He warned, though, that there remained “quite a lot of work to do” to sustain the growth momentum in The Bahamas’ largest industry and biggest GDP contributor, adding that hotels by themselves “don’t make the destination”.

Calling for the sector’s “holistic development”, the veteran hotelier said The Bahamas needed to ensure downtown Nassau was revived and Lynden Pindling International Airport (LPIA) able to cope with peak season passenger volumes, in addition to “uplifting” service levels and the guest experience.

Mr Sands spoke out after newly-released Ministry of Tourism data, obtained by Tribune Business, showed that Baha Mar’s full opening had combined with improved US economic growth and confidence to produce the first marked rebound since the 2008-2009 recession.

The Nassau/Paradise Island hotel industry’s 2018 performance was also boosted by the weak late-year comparatives from 2017 due to Hurricane Irma, which deterred travel to The Bahamas as well as the wider Caribbean for several months. This nation also benefited from the damage that storm and others inflicted on other regional destinations, which resulted in travellers switching their vacations here.

The sector’s room revenue, room nights sold and air arrivals rose by “double digit” percentages for all months except March 2018, when the latter “only” grew by 9 percent. Nassau/Paradise room revenues closed last year up by 34 percent, while room nights sold were ahead by 28 percent and 19 percent, respectively.

“I think to put it in context, we see significant growth in stopover visitors to the destination,” Mr Sands told Tribune Business of the data. “The numbers are getting back to levels seen maybe 10, 20 years ago.

“I think that augurs well. I think it’s important that not only was New Providence strong, but a lot of the Family Islands - event those in the south - enjoyed good growth. It sends the message that the tourism industry is rebounding, and making steady progress towards achieving great gains - the likes of which we’ve not experience in the industry for probably the last 10 years.

“I think overall the numbers are very, very encouraging for the tourism sector here in The Bahamas,” he continued. “Based on the Bahamas Hotel and Tourism Association (BHTA) meeting last week, all sectors of the industry are reporting a very strong first quarter, which sets the foundation for the year and people are very optimistic the trends will continue for the full year barring any unforeseen catastrophes and the like.”

The Nassau /Paradise Island hotel sector’s average ADR closed at $250.57 for 2018, as opposed to $239.26 the year before. Average daily room rates were higher in eight out of 12 months, including for the entire first quarter winter season and Christmas period, and only slipped behind 2017 in the summer months.

Similarly revenue per available room (RevPAR), which is a key indicator of hotel performance, stood at a $154.60 average for the full year as compared to $145.34 in 2017. While its performance was slightly more uneven, it finished ahead of prior year comparatives for seven out of the 12 months.

Mr Sands agreed that the ADR and RevPAR data provided further evidence that fears Baha Mar’s full entry into the market would spark a “price war” with Atlantis were unfounded. There had been speculation for many years that the two mega resorts would split, rather than grow, the high-end visitor market, resulting in “cannibalisation” and a “race to the bottom” on rates.

The Ministry of Tourism data, Mr Sands suggested, showed the opposite was occurring. “It sends the message that incremental business is accreting, all parties are benefiting, and that speaks volumes to what’s happened in the marketplace,” he told Tribune Business.

The Baha Mar executive added that there was “no question in my mind” that the resort industry’s promotional spend, together with the Ministry of Tourism’s just-launched Fly Away promotion spearheaded by rock icon Lenny Kravitz, were “propelling The Bahamas’ equity in the marketplace and beginning to pay dividends for the destination”.

Still, Mr Sands conceded that “tremendous opportunities for growth” also present challenges for the tourism and hotel sector, including securing sufficient airlift to fill available hotel rooms and improving the infrastructure that underpins the industry.

He added that “offering value for money, good service levels and continuing to exceed visitor expectations as they come to the destination” were vital if The Bahamas is to maintain its current tourism momentum.

“It’s taken us a long time,” Mr Sands said of the industry’s rebound, “and I think there’s still quite a lot of work to be done. Certainly, we have to pay attention to the ability of a new airport that it can manage all the volumes of passengers coming in at peak times.

“Hotels, as a destination in and of themselves, don’t make The Bahamas. We have to ensure the holistic development of island economies, the development of downtown Nassau and all aspects of the tourism sector and all players in tourism to ensure we holistically uplift the product offering and service to the visitors and guests.”

Away from Nassau/Paradise Island, Grand Bahama’s hotel sector showed modest improvement in a year where it was not up against like-for-like comparatives that included a fully open Grand Lucayan prior to October 2016.

The extent of the task facing that resort’s purchaser is highlighted by the fact that the island’s average daily room rate and RevPAR figures, at $69.50 and $38.76, are less than one-third and one-quarter, respectively, of the same benchmarks set by their Nassau/Paradise Island counterparts.

Grand Bahama also enjoyed only modest improvement in its room revenues, air arrivals and room nights sold, which were all up by “single digit” percentages compared to 2017 figures.

“Room revenue did not increase between the months of July and October 2018 for Grand Bahama because there was a decline in the combined ADR for these four months compared to the same period of 2017, and in some of these months room nights sold also declined,” the Ministry of Tourism said.

“However, room revenue for the hotels in Grand Bahama increased by 4 percent by the end of December year-to-date 2018, and room nights sold increased by 2 percent.”

Comments

TalRussell 3 months, 3 weeks ago

Yes or no how can Baha Mar’s comrade senior vice-president of government and external affairs have told Tribune Business that last year’s momentum had been maintained through “a very strong 2019 first quarter ,,,,,,,,,,,,,,when it's but 51 days into first quarter 2019. yes, no?

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birdiestrachan 3 months, 3 weeks ago

the FNM and D'Aguilar had absolutely nothing to do with it. If it was up to that crew BAH MAR would still be held up in the courts.

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John 3 months, 3 weeks ago

All of Canada and more than half the Uas is frozen over. A great portion of the Caribbean still remains I’d dirsrepair due to multiple hurricanes. Call it a blessing in disguise or prayers answered but it has jumped started the Bahamas Tourism. And to think there has only been one travel advisory since the FNM came to office. All of these factors have a play on the current tourism boom. And Venezuela is in turmoil and Brazil, not only a slump economy but the media has been advising against traveling there and the Zika virus for years. So yes we have blessings and hopefully the success of the hotels will trickle into the other parts of the hurting economy. Hopefully soon.

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joeblow 3 months, 3 weeks ago

So that's Robert Sands in the picture?? Editor!!!

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bogart 3 months, 3 weeks ago

Simple.....biggest is the US visitors....huge US Income tax refunds prospective travellors...spending travelling....last year....now this coming US income tax returns generally now less as taxes in effect tighten.....an less travel.......simple....when prospective have disposable income to spend....and less or no ....then they lessen travel....

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ashley14 3 months, 3 weeks ago

Your right our weather is cold and wet right now. Would love to be in the Bahamas!

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SP 3 months, 3 weeks ago

Thank GOD nobody listened to Hubert Dumbass Ingrahams' fear mongering stupidity that Baha Mar’s full entry into the market would spark a “price war to the bottom” with Atlantis because having two mega-resorts in Nassau was unsustainable. How the hell did this dumb idiot arrive at that conclusion? Will someone please show the "Little Dictator emperor" a photo of Vegas!

Hubert Ingraham and Perry Christie couldn't find a dam tourist between the two of them if they were marooned on a mega cruise ship with 100,000 sun-seekers.

Mr. Sands is 110% correct that “Hotels, as a destination in and of themselves, don’t make The Bahamas".

NOBODY travels to a vacation destination to sit in a hotel room! Resort activities, excursion tours, and local flavored nightlife are the ingredients needed to enhance visitor appeal, satisfaction, and most of all recommendations to friends and family.

Pure dumb luck and proximity have the Bahamas benefiting, mainly from the most brutal winter in living memory affecting North America, coupled with several hurricane devastated Caribbean islands that either have not fully recovered or not properly marketed themselves informing winter travelers they are up and running.

Regardless, undoubtedly the Bahamas finds itself in an envious, prime, position!

The question now is "can this FNM government capitalize on this free ride opportunity, or will they maintain the repressive status quo that played a major roll in destroying the tourism goose in the first instance?

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paul_vincent_zecchino 3 months, 3 weeks ago

What a difference changes in admistrations make, both in the Bahamas and the United States. Had the election gone the other way in America, rest assured citizens wouldn't be travelling to the Bahamas, because they'd likely not be travelling at all due to constructed economic 'collapse' and 'necessary restrictions on liberty.' America dodged not a bullet but a nuclear missile in 2016, and the country if flourishing.

It was apparent that the FNM would win as well, given the trends in America and worldwide away from paternalistic, socialist governments and their inevitable corruption and citizen impoverishment.

The Bahamas are a beautiful place to visit. Bahamian people are friendly, they like us, we like them. They're close. As goes the saying, in times of crisis, if we have to get back quickly, much easier to do so from the Bahamas than some far flung albeit 'trendy' destination preferred by the Swells. Who wants to be around them, anyway?

Get around the Elites, all you do is lose your money and liberty, to them.

The Bahamas have much to offer, and the governments of both our nations are moving in the right directions.

It's always a pleasure to visit the Bahamas, one feels 'at home', all the pressures evaporate.

No small benefit, that.

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Well_mudda_take_sic 3 months, 3 weeks ago

Is Doofus Minnis going to send President Trump a thank you card? LMAO

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concerned799 3 months, 3 weeks ago

Are we paying down debt when times are good and putting away funds for the next huricane?

We should be when times are good.

We should start to run a budgetary surplus, it will not be this good forever based on past economic cycles.

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Well_mudda_take_sic 3 months, 3 weeks ago

Ain't gonna happen....but you can be assured the size of government is about to grow by leaps and bounds. LMAO

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TheMadHatter 3 months, 3 weeks ago

We can only do what the WTO and the Privy Council allow us.

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sheeprunner12 3 months, 3 weeks ago

Thank Trump ........ when America booms, we benefit

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John 3 months, 3 weeks ago

Do you know that if all the revenue streams the government has lined up materialize and if government continues to plug the holes that cause revenue erosion, government can experience a surplus budget by early 2000 or at least by second half 2000?

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sheeprunner12 3 months, 3 weeks ago

We will never see that year again ........ do you mean 2020?????

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Well_mudda_take_sic 3 months, 3 weeks ago

John's best left alone with his head stuck in 2000. LMAO

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