The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Family Island resorts are “on the ropes but not out” following double-digit first quarter declines in room revenues and nights sold, a senior tourism official warned yesterday, as he urged the wider Bahamian tourism industry to “get our act together” to ward-off the cruise ship challenge.

Kerry Fountain, the Bahama Out Island Promotion Board’s executive director, told Tribune Business that the collective 21 percent and 11 percent declines in room nights sold and revenues for his member properties during the three months to end-March 2026 could not be blamed solely on the loss of Silver Airways airlift as “a deeper dive” into the figures had uncovered some “disturbing” trends.

He had earlier disclosed this at the Bahamas Hotel and Tourism Association’s (BHTA) quarterly meeting by revealing data that showed the 2025 decline in visitors flying to Marsh Harbour, one of the top Family Island destinations, from Fort Lauderdale and West Palm Beach compared to the year before was greater than the fall-off in airline seats.

As a result, Mr Fountain argued that The Bahamas - and especially its Family Island hotels - must urgently address a variety of factors besides replacing the annual 135,000 seats lost with Silver Airways’ June 2025 collapse. Measures include bringing hotel sales distribution “into the 21st century” via digital channels and social media marketing, a move made more urgent by artificial intelligence’s (AI) advance and growing deployment, plus delivering “value for money” on customer service and the overall experience.

And the Out Island Promotion Board chief asserted that upgrading the on-island guest experience is something that the wider Bahamian tourism industry must swiftly tackle otherwise it will “chase more and more” of its more lucrative stopover visitors - who spend on average 29 times’ more than cruise arrivals - into becoming passengers on these vessels.

Mr Fountain openly winced, stating “ouch” in response to forecasts that the cruise industry is set to expand vessel numbers and capacity by 10 percent in the four years to 2028. And he warned that many lines will likely redeploy ships away from the Mediterranean, which is relatively close to the Middle East conflict zone, and to safer Caribbean routes that will likely involve The Bahamas.

Such a development, he added, would further drive down cruise prices by increasing supply and availability, thereby further increasing the attraction of a holiday on vessels that are effectively ‘floating resorts’ with guest amenities comparable to land-based mega destination such as Atlantis or Baha Mar.

Mr Fountain spoke out as Nassau Cruise Port yesterday unveiled a 200,000 year-over-year passenger increase to 1.8m for the 2026 first quarter, up from 1.6m in the same period last year, with cruise ship calls ahead by 5.5 percent - numbers that stand in stark contrast to the declines experienced by Out Island Promotion Board members during the same period.

And Latia Duncombe, the Ministry of Tourism’s director-general, reproduced figures affirming that cruise passengers accounted for 86 percent of all arrivals to The Bahamas during the first two months of 2026. They accounted for 2.13m of the total 2.43m visitors to this nation in January and February, with air arrivals just barely below 300,000 at 299,601.

Mr Fountain, meanwhile, also produced research showing that the average collective annual occupancy rate achieved by all Family Island hotels - not just his member properties - has not changed in 28 years - almost three decades. It hovered at around 41 percent in 2025 - roughly the same rate in 1997 in the last century.

“While our numbers are down, we’re on the ropes but we’re not out,” the Promotion Board chief told Tribune Business in a subsequent interview. “I think that what we need to fix, it’s a combination of stuff. We need to address the seat loss with Silver Airways out of Fort Lauderdale, particularly into Abaco, Eleuthera, Bimini and Exuma.

“In addition to that, even when we had the airlift that we had, using 2024 as an example, the average occupancy throughout the islands - it’s not just my member hotels, it’s all the 200-something odd hotels - the average occupancy was still only around 40 percent when we had the airline seats.”

Mr Fountain had earlier told the BHTA meeting that, despite having the highest number of available airline seats for a decade in 2024, “the average occupancy” for that year “was still only 37.6 percent for all Out Island hotels”. And he revealed “a deeper dive” showed, as an example, that the number of visitors flying to Abaco from Fort Lauderdale and West Palm Beach in 2025 had declined at a faster rate than the loss of seats due to Silver Airways’ failure.

While available seats from Fort Lauderdale to Marsh Harbour in 2025 declined by 37.3 percent year-over-year, falling from 37,621 in 2024 to just 23,762, Mr Fountain’s data showed the drop-off in actual visitor numbers flying that route was slightly steeper at 37.7 percent - dropping from 20,814 in 2024 to 12,961 to produce a decline of almost 8,000.

And the data for the West Palm Beach route produced a wider gulf, with actual visitor numbers falling by 22.8 percent in 2025 - from 13,303 to 10,272 - while seat capacity was down by a much lower 15.3 percent.

“This is where I think we have a hotel distribution issue,” Mr Fountain told Tribune Business. “That’s where our hotels, ‘Mom and Pop’ shops for the most part, are not up to speed on 21st century operations. They will be left behind. As we embark on this AI route, if you’re not in the game you may as well sell up.

“We say we are a luxury destination, and mind you we do have some luxury, but we are a very high-priced destination. What we need to do, because customers want to know what they are paying all the money for. Yes, we need to replace the loss of Silver Airways seats out of Fort Lauderdale, yes, we need to help hotel distribution. But we also need to focus on the customer experience.

“We won’t compete with the cruise lines via price or cost, but we have to deliver value for dollars, and value has to come in the service, treatment and experience we give our guests.”

Jackson Weech, the BHTA’s president, said the reversal of Family Island tourism’s late 2025 and early 2026 decline was among the Association’s top priorities moving forward. “While Nassau/Paradise Island’s traditional indicators of occupancy and room rates spoke to a very robust first quarter in 2026, and future forecasts look healthy, the same cannot be said for many of the Family Islands, some of whom continue to report double-digit declines in hotel room occupancies,” he said.

Mr Fountain, meanwhile, said the whole land-based Bahamian tourism industry - and not just the Family Islands - must pay attention to the growing competitive threat posed by the cruise industry. “I had an opportunity last week to go on a four-night cruise from Miami,” he told the BHTA meeting. “I hate cruises, and I only did it to see, to experience the cruise.

“I went to Ocean Cay, which is right off Bimini, on the MSC cruise. If we don’t get our act together as far as our product is concerned on-island, we’re going to chase more and more of our visitors on these cruise ships. These cruise ships are deploying more and more product from the Mediterranean area to The Bahamas. Prices are going to go down, deals are going to get better.

“By the way, cruise visitors are not the same cruise visitors we used to see years ago. On the ships, people have money and, if we continue to under-deliver, we are going to lose more and more of our valuable $2,500 per stay stopover visitor spending to cruise visitors that are spending $84 a day.”

In response, Mr Weech promised Mr Fountain that the tourism industry will “drill down” to ensure all “the pieces of the puzzle” are in place to maintain Bahamian land-based tourism’s competitiveness against the growing cruise ship industry and its expanding private islands and beach club destinations.