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Ukraine invasion ‘serious concern’ for local tourism

Firefighters inspect the damage at a building following a rocket attack on the city of Kyiv, Ukraine, Friday. (Ukrainian Police Department Press Service via AP)

Firefighters inspect the damage at a building following a rocket attack on the city of Kyiv, Ukraine, Friday. (Ukrainian Police Department Press Service via AP)

photo

Kerry Fountain

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Tourism executives yesterday warned that Russia’s invasion of Ukraine is a “serious concern” for The Bahamas’ post-COVID recovery as the sector pushed for further easing of health restrictions.

Kerry Fountain, the Bahamas Out Islands Promotion Board’s executive director, told Tribune Business that the situation reminded him of when the first COVID emergency order was issued almost two years ago as “nobody knew what to expect” at that time.

Suggesting that similar uncertainties surround the Ukraine conflict, particularly over its duration and how widespread fighting may become, he said of the Board’s member hotels: “In some areas we’re above 2019 levels, and in other areas we’re very close. The numbers are healthy, but I tell you, I’m really concerned.

“It reminds me of when we had the first emergency order back in March 2020. Nobody knew what to expect, and what the pandemic would do to our main industry, tourism. OK, we’re now going on as if it’s business as usual, but this [Russia-Ukraine] is a serious situation. You can’t worry about it, but it’s a real concern.”

Earlier, addressing the Bahamas Hotel and Tourism Association’s (BHTA) first Board of Directors’ meeting of 2022, Mr Fountain said the re-opening of the UK, French and German tourism markets to Bahamian vacations following the relaxation of COVID restrictions could now be endangered by these nations’ proximity to the conflict zone in Ukraine.

Russia’s invasion, which last night appeared designed to takeover the whole of Ukraine and smash its government, is especially ill-timed for a Bahamian tourism industry - and wider economy - that was just starting to catch itself and regain some momentum following a near-two year battering from COVID.

The anticipated pick-up in tourism business failed to materialise over the Christmas/New Year holiday due to the Omicron-driven ‘fourth wave’ of COVID infections and now, just as that dissipates and border/testing restrictions are eased, a further challenge emerges through Russia’s assault on Ukraine.

It is uncertain, though, whether the conflict will have any impact on US tourists’ appetite for travel. The Bahamas is a relatively long distance from Ukraine’s battlefields, and its proximity to core source markets in New York, Florida and the wider east coast is likely to mean its tourism industry is among the least affected by any fall-out from eastern Europe.

The proximity advantage helped The Bahamas rebound quicker than many rival destinations in the aftermath of the September 11 terror attacks, which shut down air travel from and to the US for around two weeks. Such a shutdown, as also occurred with the COVID-19 pandemic, does not appear to be a factor this time around.

Some suggested yesterday that The Bahamas may even see some benefits from the consequences of Russia’s invasion. Peter Maury, the Association of Bahamas Marinas (ABM) president, told the BHTA meeting that it could drive the charter yachts that typically sail the Mediterranean back across the Atlantic to the US, Bahamas and Caribbean if the conflict persists.

“I don’t know if it will push traffic back across the Atlantic. I hate to say it, but it may be good for The Bahamas and the Caribbean,” he added. Energy prices, especially for electricity and transportation, are among the first sectors where The Bahamas will feel the conflict’s economic impact because Russia is a major oil and gas producer/exporter.

Vasco Bastian, the Bahamas Petroleum Dealers Association’s (BPDA) vice-president, warned local consumers earlier this week to brace for $6 per gallon gasoline prices by March as the markets bid up global oil prices on fears of Russian supply disruptions due to the imposition of sanctions in retaliation for the Ukraine invasion.

World oil prices surged again yesterday, with the Brent crude index rising more than 8 percent to hit $105 per barrel for the first time since August 2014 - almost eight years ago. That means oil prices have increased by more than $20 per barrel in less than two months since the start of 2022.

Airline ticket prices will likely be increased in response to rising fuel prices, which will increase the cost for tourists in accessing The Bahamas. And the hotel industry, as Bahamas Power & Light’s (BPL) largest electricity consumer, will see its cost base and margins squeezed from greater energy prices.

Faced with this scenario, Robert Sands, the BHTA’s president, told yesterday’s meeting that the industry body was pushing for BPL to sign a new “hedging” agreement that will lock-in its fuel prices at a given amount for a certain period of time. The existing hedge, which has provided stability to the fuel charge component that accounts for up to 60 percent of consumer bills, is due to expire in June 2022.

“We pledged to work with BPL in advocating for the signing of another hedging agreement to keep the fuel surcharge at manageable levels,” Mr Sands said. The BHTA president also asserted that The Bahamas needs to place itself “at the forefront” of the continued relaxation in COVID testing and travel measures.

Reiterating that the tourism industry remains focused on “the elimination of impediments to travel”, Mr Sands said: “We continue to push for the easing of COVID-19 travel protocols and, in particular, for the elimination of mask requirements in our hotels and restaurants.

“We will continue to push for the upgrading of The Bahamas on the Centres for Disease Control and Prevention (CDC) rankings, and encourage all of our members to encourage their associates to become vaccinated.”

The “harnessing of vacation rental market”, and improvements to “the ease of doing business” in terms of the hotel licensing process, were identified as further priorities by Mr Sands.

Comments

tribanon 9 months, 2 weeks ago

As is now being done by the corrupt and incompetent Biden administration in the U.S., we can count on our corrupt and incompetent Davis led PLP administration to start blaming any and every thing bad on Russia's invasion of the Ukraine rather than COVID-19. LMAO

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Proguing 9 months, 2 weeks ago

The price of gas is already @ $5.17 per gallon and this has nothing to do with Ukraine. The war will be brief and have only a temporary impact on the price of oil.

Biden is directing oil companies to invest in wind mills instead of developing new oil fields. This is what is causing the price of oil to surge. We have three more years to suffer under Biden's new energy plan. The price of oil could double during that time...

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JackArawak 9 months, 2 weeks ago

Some of the comments here are astoundingly ignorant

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