The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Hotel and Tourism Association’s (BHTA) president yesterday voiced optimism that “all-time high” travel demand will help offset newly-elevated Central Bank concerns about the “downside risks” facing the sector.

Robert Sands acknowledged to Tribune Business that the industry remains “concerned” about the threat posed to its continued revival by future COVID variants, rising oil prices translating into higher airline fuel costs and ticket prices, and further US interest hikes dampening travel demand in The Bahamas’ major tourism source market.

However, he said: “I think the industry is concerned but that has to be viewed against the whole question of pent-up demand for travel, which is at an all-time high, and the realities of these costs, which are in part based on geo-political issues that hopefully there will be some resolution to in the not-too-distant future. That will bring some stability in oil prices going forward.”

Describing tourism as a “resilient” industry, Mr Sands reiterated: “The industry is concerned but it has to be looked at against pent-up demand for the sector. Location is certainly an advantage for The Bahamas, the distance from our primary market in the US and the distance to travel to this destination. That will help play a part in The Bahamas remaining on its trajectory.

“Yes, we are concerned about any other related COVID issues, but The Bahamas in the last three weeks has been able to demonstrate with increased numbers in the destination that we have been able to hold cases at a level. We want to be top of the list for managing COVID cases throughout the Caribbean.”

Mr Sands said this was translating into “a positive trend of forward bookings and interest in the destination, and we are seeing bookings going beyond the traditional winter season into the end of April, May and even June. There may be a new dynamic as result of pent-up demand”.

He was speaking after the Central Bank, in its economic assessment for February, intensified warnings about the growing risks to The Bahamas’ tourism-led recovery. “Expectations are that the domestic economy will continue to recover during 2022, as tourism output converges progressively closer to pre-COVID-19 levels,” it said.

“However, downside risks to the industry persist given continued elevated international health and travel sector exposures to disruptions from further mutations of the virus; the potential for rising energy costs to erode travel sector competitiveness; and counter-inflation polices that could dampen source market consumers’ capacity to spend on travel.”

However, the Central Bank counter-balanced this, saying: “New and ongoing foreign investment-led projects, combined with post-hurricane reconstruction works, are anticipated to provide continued stimulus via the construction sector.

“In the labour market, the unemployment rate is expected to remain above pre-pandemic levels, but with further workforce engagement, concentrated largely in the construction sector and rehiring of tourism sector employees. In terms of prices, elevated inflation rate is anticipated, reflective of increased international oil prices, higher costs for other imported goods and supply chain shortages linked to geopolitical tensions in Eastern Europe.”

Focusing back on tourism, the Central Bank said: “The most recent data provided by the Nassau Airport Development Company (NAD) showed that total departures, net of domestic passengers, grew to 80,276 in February from 16,098 in the corresponding month of 2021. Specifically, US departures moved higher to 69,653 from 15,058 in the prior year, while non-US departures improved to 10,623 from 1,040 in the preceding year.

“On a year-to-date basis, outward-bound traffic expanded to 157,447 passengers, a recovery from the 86 percent decline same period last year, when borders remained closed to contain the spread of the virus. Reflecting this outturn, US departures rose to 134,853 visitors, a turnaround from the 84.9 percent fall-off a year earlier. Similarly, non-US departures grew to 22,594, a reversal from the 91.3 percent decrease in 2021.”