Prime Minister Dr Hubert Minnis.
By NEIL HARTNELL
Tribune Business Editor
The prime minister yesterday argued his six percent unemployment rate goal can be achieved by increasing average occupancy rates at existing Bahamian hotels by 20 percentage points.
Dr Hubert Minnis, telling the House of Assembly that his ambitious jobless rate reduction target can be achieved “without building one more room in The Bahamas”, said growing average occupancies from 65 percent to 85 percent would inject a further $657m in visitor spending into the economy.
He added that rather than seek new resort investments The Bahamas has to maximise the existing yields from its current 18,000 hotel rooms which, at an annual average occupancy of 65 percent, means some 6,300 are sitting vacant every night.
Hitting back at those who have voiced doubts that he will achieve his target jobless rate, Dr Minnis said: “We need to remind the sceptics that, not so long ago, properties on Paradise Island with more than 1,000 rooms regularly ran occupancies of 85 percent year round. Those sceptics also need to digest the fact that cruise ships arrive in the port of Nassau with near 100 percent occupancies.
“We must focus even more to make the adjustments to move the occupancy needle beyond 65 percent.” The prime minister added that increasing the average Bahamian resort occupancy rate to 85 percent would mean an extra 3,600 hotel rooms per night are filled.
“That is equivalent to filling a property one-and-a-half times the size of Baha Mar every night,” he said. “An additional 3,600 rooms occupied every night at double occupancy would mean an additional 438,000 annual stopover visitors with an average length of stay of six nights.”
“With each visitor spending the average $1,500 per visit, moving occupancies from 65 percent to 85 percent would mean an additional $657m in incremental visitor expenditure in the Bahamas. When we look at the data showing the number of direct, indirect and induced jobs that would be created by such an outcome, the 6 percent level of unemployment is achievable from tourism sector expansion alone.”
The 6 percent jobless rate targeted by Dr Minnis would represent a 21st century low for The Bahamas. Zhivargo Laing, former minister of state for finance in the Hubert Ingraham administration, told Tribune Business that while possible, achieving the Prime Minister’s goal will be “highly improbable”.
“You have to have substantial investments take place. I’m talking about substantial investments,” he added. “You are creating thousands of jobs over the next 18 months, and then those jobs can’t merely be construction jobs. You can have a project take place, and a construction team in place for six months, seven months, eight months, and the job can come to an end.”
Meanwhile, Dr Minnis said two Florida-based fixed base operators (FBOs) where The Bahamas will establish pre-clearance facilities for private pilots are expecting a 15-20 percent increase in traffic to this nation as a result.