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Hotels ‘Can’T Ask For More’ Over Post-Covid Rebound

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ROBERT SANDS

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian resorts are seeing the high-occupancy Christmas period expand by 50 percent, a top hotelier has revealed, adding of the post-COVID rebound: “We couldn’t have asked for more.”

Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, told Tribune Business that the industry’s typically strong Christmas/New Year occupancies were this year set to last for ten days as opposed to the traditional six to seven-day period enjoyed pre-COVID.

Suggesting that hotels were now benefiting from holding their nerve during the pandemic, and “maintaining the integrity of the room rate”, he added that it would have been “very difficult” for properties and the wider sector to reverse any discounts offered in a bid to ‘buy’ business.

Mr Sands, confirming that average daily room rates (ADRs) have risen for “a lot of properties” on New Providence/Paradise Island as tourism continues rebounding from COVID, said this upward trend had not been confined to the Bahamian capital. Room rates for Family Island resorts “have been through the roof” due to the pent-up demand caused by last year’s travel shutdown.

While away from his office when speaking to this newspaper, and unable to access data, Mr Sands confirmed last week’s assessment by Joy Jibrilu, the Ministry of Tourism’s director-general, that room rates have increased rather than reduced as the Bahamian hotel industry continues to re-emerge from last year’s COVID-related devastation.

While there are no aggregate ADR figures for all Bahamas-based resort properties, the BHTA chief said it was likely that Mrs Jibrilu was referring to data obtained from a pool of New Providence and Paradise Island-based resorts.

“I’m sure she was looking at analysis done from select hotels which shows that, in the main, ADR has increased for a lot of properties,” Mr Sands said. “Family Island hotels, their average rates as well have been through the roof in the last year because demand has been extremely high.”

He added that increased room rates, together with an “extended length of stay” in The Bahamas by many visitors, was helping to drive greater spending in the destination by tourists and improve the industry’s yields.

“I think the increased spending is a direct relationship with the increase in the average rate, and also a direct relationship with the length of stay. All of these things contribute. The length of stay may be increasing,” Mr Sands said, explaining that this was forecast to result in lengthier periods of sustained high hotel occupancies.

“The period of effective occupancy has increased by 50 percent,” he explained. “Where you may have had a week of strong, high occupancies we’re seeing that extend to ten days. Where we would have seen a build-up post-Christmas, starting maybe on the 27th or the 28th, we’re seeing that from the 26th now.

“We’re seeing the period of days within the festive season increasing from a traditional timeframe of six days to a week to ten days. With increased occupancies, increased length of stay, increased average rates, it means the visitors in the destination are spending much more in the destination.

“That is reinforced by information coming from the Central Bank of The Bahamas that revenues for the country are increasing as a direct result of improvement in the tourism sector.”

Mr Sands, who spoke to Tribune Business just as COVID-19’s Omicron mutation started to emerge as a potential threat, said most Bahamian hotels had realised early on in the pandemic that it was “not in their best interests” to discount room rates in an effort to buy business.

This, he explained, would have created the impression in travellers’ minds that The Bahamas was previously an over-priced destination offering too little value for what it was charging, thus making it very hard to return them to pre-COVID levels.

“I think the reality is that under any difficult circumstances, where business is depressed, one would have thought the way to attract business is to reduces rates,” Mr Sands told this newspaper. “However, most properties realised it was best to retain value and keep the rates they have or increase them.

“If you reduce them, it’s very difficult to get them to the level necessary when the business returns, and it has returned very quickly.”

Pointing out that Bahamian tourism has endured “a protracted period” of struggle dating back all the way to Hurricane Dorian, he added: “I think hotels decided it was not in their best interest, based on the level of business out there, to go after that business based on rate but, instead, based on value-added.”

This approach, Mr Sands explained, included offers such as the free use of hotel amenities or children being allowed to eat for free. “In this environment, once you reduce the room rates, it’s very difficult to get them back to a level where you return a profit and to a level that justifies the value of the offering.

“You’re saying to the travelling public that this is the true value of the offering. These impressions become very difficult to reverse.” Asked whether the hotel and tourism industry had been taken aback by the speed of the post-COVID rebound, Mr Sands replied: “I don’t know if it’s a question of surprise, but we always knew there was pent-up demand for travel.”

The BHTA chief, though, cautioned that even if The Bahamas hit its one million stopover visitor target for 2021 this was still just 56 percent of the 1.8m arrivals seen in 2019. And some Caribbean rivals, such as Puerto Rico, the British Virgin Islands and US Virgin Islands, had been able to exploit their territorial/colonial links to get a recovery “head start” on The Bahamas.

Still, Mr Sands said: “I don’t think we could have asked for anything more. The rebound is happening at a pace we can deal with. There are a number of operational issues we have to deal with.” These include retraining workers recalled from furlough, plus providing the appropriate skills to new hires who will replace previous employees who decide not to return.

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