Central Bank Notes Decline In Hotels Bottom Line

Wednesday, 23 September 2009 07:21 News Editor
The Central Bank is confirming that hotels in The Bahamas sustained whopping blows to their bottom line in the last quarter — following an earlier Guardian report pinning that decline at 21 percent.

"Preliminary indicators of tourism sector revenues suggest that hotel receipts, across all major markets, declined significantly during the review quarter," said the bank's latest quarterly report ending June 2009. "This reflected the combined adverse effects on average earnings of lower occupancy levels, various discounts and other incentive programs."

The news comes as hotels and resorts throughout the region register record declines, even in the normally active travel season start. They are declines connected in every way to the global recession now clamping down on consumer spending, even on the most basic necessity items.

Travel in the U.S. has altered greatly in the last year, which has had an equally adverse affect on travel to The Bahamas. As of May, air arrivals were down by some 12 percent eve though total arrivals to the destination were up in large part due to increased cruise ship arrivals.

It's something the Central Bank took note of.

"The number of visitor arrivals rose by an estimated 8.6 percent during the first two months of the quarter to 0.8 million, contrasting with last year's 6.1 percent decline to 0.7 million," the report said. "The performance continued to benefit from strengthened cruise arrivals, which firmed by 18.1 percent, supported in part by the rerouting of several cruise ships following health concerns in other countries, whereas the air segment remained weak, declining by an estimated 8.2 percent."

All told, total arrivals to the New Providence market rebounded by 19.7 percent during the first two months of the quarter as the gain in sea passengers outpaced the falloff in air traffic, said the bank. Similarly, visitors to Grand Bahama increased by 4 percent, a reversal from the 21.9 percent reduction in 2008, also supported by a boost in sea arrivals.

The sea arrivals, however, do not necessarily translate into revenue for the hotels and resorts sprinkling the island, with an earlier Guardian report noting declines on myriad properties despite that overall increase in arrivals.

The rise in total arrivals has had no effect on the bottom lines of many hotels in the country, given they depend largely on visitors who wing their way to The Bahamas needing accommodations.

Source: The Nassau Guardian