• On ‘significant’ 5-7% room rate jump
• But ‘greatest opportunity’ still untapped
• BHTA chief hopes for 600 room increase
By NEIL HARTNELL
Tribune Business Editor
Bahamian resorts are poised for an up to 10 percent year-over-year increase in business volumes for the 2024 first quarter, it was revealed yesterday, with the sector’s “greatest opportunity” still untapped.
Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, told Tribune Business that this country’s largest industry is eyeing “a very strong and very robust” peak winter season based on advanced bookings and the pace at which they are being made.
Disclosing that the hotel sector has enjoyed “very significant growth in average daily room rates (ADR)” of 5-7 percent, he added that it is also forecasting “better yields” for the upcoming Christmas and New Year holiday period following a “very strong” Thanksgiving holiday weekend.
However, Mr Sands told this newspaper that the “greatest opportunity” to maximise tourism’s economic benefits in the short-term remains unfulfilled due to the continued shortage of hotel rooms and other types of accommodation to meet visitor demand for a Bahamas vacation.
With the British Colonial set to increase hotel room inventory by 300 when it opens next month, the BHTA president voiced optimism that The Bahamas could increase available accommodations by 600 units before the 2024 first quarter closes.
Mr Sands added that the strength of visitor demand is such that any extra available rooms “will always be filled quite quickly”, making it imperative that The Bahamas restore “as much inventory as we can in the shortest possible time”.
“I think Thanksgiving was very strong for most of the hotels, and advanced bookings for the first quarter of 2024 certainly remain very strong and very robust,” the BHTA president told Tribune Business. “I think the hotels are looking at a very strong first quarter. I think we should do better than last year, absolutely.
“The one remaining challenge, as I’ve always said, right now is the inventory - the quantity of hotel rooms. There’s only so much growth you can have on limited inventory.” Besides the absence of the former Melia Nassau Beach resort’s 694 rooms, with the property in the process of being demolished, New Providence has also lost Atlantis’ Beach Towers ahead of their redevelopment into Somewhere Else.
However, the reduced supply of hotel rooms means tourism demand has imposed upward pressure on rates, prices and resort yields. “The important issue is a very significant growth in ADR, anywhere from 5 percent to 7 percent,” Mr Sands added, “and also the length of stay is holding between four to five days. It continues to edge itself up.
“These are positive trends against the backdrop of waiting on the supply of rooms to increase. That will take some of the pressure off. Any incremental addition of rooms and inventory certainly calls for continued growth of hotel occupancy, and we’re seeing some rooms come on line in areas of the Family Islands and areas of Grand Bahama.”
The calendar year’s first three months, or first quarter, are pivotal for the hotel industry and wider Bahamian tourism because they include the peak winter season when visitor volumes and rates are typically at their highest in the run-up to Easter.
Asked about the 2024 first quarter outlook and business forecasts, Mr Sands responded: “Based on forward bookings and the booking pace, it appears we will be up anywhere between 7 percent to 10 percent compared to this year .”
However, he warned that first quarter predictions do not necessarily reflect the likely 2024 full-year outcome. “We have to look at the entire year,” the BHTA president said. “We cannot look at it superficially. I think one quarter doesn’t give a complete trend although hopefully it continues.
“As additional rooms come online, and we move into the second and third quarters, we will be in a much better position to see how we’re trending over 2019 [pre-COVID], but there’s every indication that we should achieve or exceed that amount.
“Let’s take it one quarter at a time,” Mr Sands added. “Obviously the first quarter is probably one of the most important quarters for hotel operations as it really sets the pace for the rest of the year. I think most operators will say they are very encouraged by their advanced bookings and look forward to another solid year.
“Everything is extremely positive. I think the introduction of new airlift coming in also creates the international diversity from new markets, and also creates feeder markets for destinations from afar.” That new airlift includes a newly-opened route from the US west coast by Jet Blue, via Los Angeles International Airport (LAX), with Alaskan Airlines soon to follow.
As for the Christmas/New Year period, now less than one month away, Mr Sands said: “I think there’s no question that the festive season remains very, very strong. What we have seen is people booking slightly earlier than normal.
“That may be a product of supply and demand, as well as festive airline availability. That is good because it allows for hotels to plan and yield manage as well. The festive season is always an extremely busy period for The Bahamas, and while we may not see a significant occupancy increase over previous years we will certainly be seeing better yields.”
While hotel staff will be kept bust during the festive season, Mr Sands added: “I believe there is significant pent-up demand such that any incremental increase in rooms that we can get can always be filled quite quickly. The greatest opportunity for us is to bring online as many rooms as we can in the shortest possible time if we are to be real beneficiaries of this very positive trend.”
Rather than focus on any room inventory increase targets, the BHTA president said: “I’m hopeful that by the end of this year we may add another 500-600 rooms throughout New Providence and the rest of The Bahamas; before the end of 2023 or the end of the first month of 2024; certainly by the end of the 2024 first quarter.
“We’re looking at small numbers of rooms through the Family Islands and Grand Bahama, and looking at the aggregate, so that once we add that up we can get to those numbers. Airbnb is also a significant part of the mix. Supply and demand. You build it and they will come. The old adage.
“We should not be fixed on any finite number but a number the destination can handle, with adequate airlift and distribution to the Family Islands in a seamless and efficient manner. I think our greatest opportunity for growth, some still remains in New Providence, but a significant amount in the Family Islands.”
Asked whether The Bahamas has sufficient airlift to meet tourism demand, Mr Sands replied: “We have adequate, but we never rest on our laurels on what the current situation is. It’s always important to grow airlift because airlift drives hotel occupancy.”