By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Bahamas may be unable to fully meet tourism demand for 12-18 months due to a room shortage caused by up to 15-20 percent of available inventory being taken offline, a senior hotelier has revealed.
Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, told Tribune Business he is optimistic the industry will soon “shatter the glass ceiling” caused by an imbalance between supply of available rooms and the surge in post-COVID visitor demand for the destination.
Speaking after Dr Kenneth Romer, the Ministry of Tourism’s deputy director-general and acting head of aviation, last week said The Bahamas has a “capacity” challenge in terms of sufficient hotel room inventory to accommodate all visitors, he added that the Government was encouraging owners and operators of shuttered resorts to “accelerate” plans for their renovation or sale.
“The fact of the matter is that the co-operative effort between the Ministry of Tourism and private sector hotels has generated a significant demand for vacationing in The Bahamas,” Mr Sands told this newspaper. “The reality is that pent-up demand is right now surpassing the available supply of rooms, principally caused be a number of hotels being out of operation, in renovation or in transition in terms of sales agreements.
“We have a component of that in New Providence, a large component of that in Grand Bahama, and some hotels in the Family Islands that may not have reopened since COVID. While the amount of rooms involved there may be less, it is just as significant. The reality is that the efforts by partners in the sector have created this demand, and once we get this inventory back it will shatter the glass ceiling we have have somewhat imposed on ourselves in terms of available rooms.
“The demand for the destination is outpacing our ability to provide supply at the moment. It’s testament to the fact that The Bahamas as a destination is very much in demand, and that’s a major incentive for further investors to invest in hospitality in the islands of The Bahamas.”
On New Providence, both downtown Nassau’s British Colonial resort and the former Melia Nassau Beach Resort have been closed for months in the former’s case, and several year’s in the latter’s, for renovation and rebranding by their respective owners. Atlantis’ 400-room Beach Towers is also awaiting redevelopment into Somewhere Else by Grammy Award-winning musician and producer, Pharrell Williams, and his business partner David Grutman.
“It will last until we can add additional inventory,” Mr Sands said of the visitor demand-room supply imbalance. “It’s hard to say, but would think this is at least 12-18 months period-wise. In fairness to the Government, they’re working very hard to encourage operators that have the capacity that is still not on line to accelerate their plans to advance their work, so we do not find ourselves in this position for a long time period.”
Asked if this was a good problem for the industry to have, the BHTA president replied: “Yes and no. Certainly, if we can increase the occupancy without reducing the demand that’s a good thing but, at the same time, if that demand does not find accommodation here it will go elsewhere.
“I think the first thing we want is to get the available inventory back online. That may represent anywhere from 15-20 percent of potential capacity. The quicker we get that back online we will be in a much better position, and any other new projects that are in train to cause them to come online as soon as possible.”
Mr Sands said visitor lengths of stay continue to be longer than pre-COVID, with many hotel guests remaining in The Bahamas for a day or two more, which also impacts hotel room availability. “For the first time in a long period of time, we’re getting visitors from virtually every US state,” he added, “which tells us The Bahamas’ brand is reaching further and deeper. That creates further demand for the destination, and demonstrates that collective digital marketing is working very well.”
Dr Romer, speaking to the capacity challenges last week, said: “We had a situation the other day where an airline couldn’t find seven rooms for stranded passengers. Just Saturday past we had an air transit that made a diversion from Cuba into Nassau, 210 passengers, and we had hoped to overnight them in Nassau but we couldn’t find rooms at any of our properties to overnight passengers coming in. Our challenge right now is capacity.”
He said The Bahamas had “soared back” to 7.1m total visitors for the 2022 full-year, a figure just 100,000 shy of the record-breaking 7.2m arrivals welcomed in 2019 prior to the COVID-19 pandemic. He added that this nation had recovered to about 97 percent of 2019 visitor levels last year.
“Air arrivals are very important because they contribute to heads in beds,” the Ministry of Tourism official said, adding that such stopover visitors typically generate a per capita spending impact that is 28 times’ greater than their cruise counterparts.
Disclosing that 2022’s stopover visitors were around 100,000 below 2019 levels, standing at 1.5m compared to 1.6m, Dr Romer said: “We are about 90 percent recovered at the end of 2022.” This, combined with January’s performance, had given The Bahamas confidence that it can meet the 20 percent year-over-year growth in visitor arrivals for 2023 that is being targeted by Chester Cooper, deputy prime minister and minister of tourism, investments and aviation.
While total visitor numbers for January 2023 were up by 33 percent compared to the same month in 2019, Dr Romer said that month saw air arrivals exceed pre-COVID figures for the first time at around 132,000. This compared to 129,000 for January 2019.
“It gives you an idea of what February and March look like,” he disclosed of January’s performance. “Those numbers are holding for February and March.....” He added that the latter two months appear to be on the same growth trajectory as January 2023, providing further confidence that The Bahamas will hit its 20 percent arrivals growth target for the year.
Comments
IslandWarrior 1 year, 1 month ago
The Bahamian culture of excluding locals from the economic model has contributed to the country's current shortage of hotel rooms. This shortsightedness can be traced back to the government's neglect of the guesthouse industry, which was a proven way to stimulate economic growth and allow locals to share in the profits of the tourism industry.
In the past, our grandparents and great-grandparents had guesthouses designed into their existing homes, which allowed them to host tourists and earn income. However, after the so-called "period of deliverance" following the quiet revolution, which prioritized foreigners over the economic success of Bahamians, times became tough, and many local tourist-related Bahamian businesses saw an immediate death. The government began to focus on attracting large resort hotels instead of supporting the guesthouse industry, which led to the exclusion of many Bahamians from the tourism industry.
This shortsightedness has had long-lasting effects on the Bahamian economy. The country now faces a shortage of hotel rooms, making it difficult to accommodate the growing number of tourists visiting each year. This shortage has resulted in higher tourist prices and limited opportunities for Bahamians to enter the tourism industry.
To address this issue, the government should consider investing in the guesthouse industry and other forms of small-scale tourism that allow locals to participate in the industry. This could involve providing funding and training to help people convert their homes into guesthouses and promote alternative forms of tourism, such as eco-tourism and cultural tourism. By supporting these initiatives, the government can help create more opportunities for Bahamians in the tourism industry and ensure that the benefits of tourism are more evenly distributed throughout the country.
Sickened 1 year, 1 month ago
I think the PLP should add extra burden and taxes on the AIRBNB entrepreneurs in order to further reduce room capacity for tourists that want to come and visit and inject money directly into the hands of individual Bahamians.
SP 1 year, 1 month ago
Thank you Mr. Sands for putting things in proper perspective.
Dr. Romer is so busy pandering to government propaganda nonsense he forgot that many of us are ACTUALLY REAL VETERAN TOURISM PROFESSIONALS that truly understand the industry and will not allow him to spew bullshyt for brownie points as he did last week without retribution!
So we have a serious 15-20% shortage of tourist accommodations due to offline inventory and the government's solution is to create bottlenecks and hardship by burdening the struggling vacation home rental sector that still has not recovered from 2 years of Covid.
These people still had mortgages, maintenance, and other expenses to meet during the lockdown period AND had to find a way to get back up and running as things began to return to normalcy.
The problem can only be that the government continues proving they have no idea why and what they are doing in tourism. Another case in point of government ignorance in tourism is in 1980 an airport exit survey revealed the single biggest tourist-related resort complaint was a shortage of things to do in Nassau, and to date, NO GOVERNMENT has done a dam thing to even remotely address the issue. Yet they stand around yapping about the "importance of the number 1 industry".
What the government needs to do is forget about suppressing and taxing the vacation home rental sector for the immediate future and focus on encouraging even more individuals to make vacation home rental properties available for tourists to bridge the 15-20% shortage we are now faced with in the short term.
Airbnb, HomeAway, Booking.com, and all other vacation home rental operators already collect 10% VAT for the government, FOR ALL SALES, and over 60% of them do not make $100,000 per year to qualify for VAT collection, so the government is profiting more with this scenario anyway.
Stupid does as stupid is. Carry on smartly!
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