Bahamas Hotels Concerned By Tourism Projections

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THE Bahamian hotel industry is concerned that current business projections for September and October, the low point of the tourism season, "are fairly flat" against 2009 comparatives, Tribune Business was told last night, although the sector was encouraged by July occupancy levels that almost matched pre-recession figures.

Frank Comito, the Bahamas Hotel Association's executive vice-president, told this newspaper that while the industry was "encouraged that the numbers are continuing to move in the right direction", there were several factors continuing to cast a shadow.

"We are concerned, because the projections for September and October are fairly flat. We're not seeing increases just yet for September and October on our projections, but are hoping that it will increase," Mr Comito told Tribune Business.

Figures released yesterday continued to show a gradually improving financial and operating environment for the Bahamas' largest private industry, with a joint BHA-Ministry of Tourism survey showing that for July 2010, occupancy levels recorded by 14 New Providence hotels averaged 78.2 per cent, compared to 78.7 per cent in July 2008.

This was the highest recorded average occupancy since the latter month, and is significant given that July 2010 was just 0.5 per cent behind its 2008 comparative a reading taken just before the September Wall Street crash sparked by Lehman Brothers' collapse. The Bahamian hotel industry has targeted matching pre-September 2008 comparatives to confirm it is pulling out of the slump induced by the credit crunch and global recession.

Further positive news came from the year-over-year increase in average daily room rates (ADRs), which increased by $18.33 compared to 2009, producing a 17.4 per cent room revenue boost and 8 per cent rise in room nights sold. For July 2010, the average ADR at the 14 New Providence hotels was $229.47, compared to $211.14 last year.

The BHA-Ministry of Tourism survey added that of the 14 properties, 12 reported room revenue increases, with 10 showing "double digit" growth.

Still, both the ADR and room revenue for July 2010 continued to lag behind pre-recession levels, as the ADR for July 2008 was $241.06 compared to $229.47 this time around, while room revenue was off by 8.4 per cent compared to two years ago.

Mr Comito acknowledged that ADR remained "a huge issue" for the Bahamian hotel industry, although it was "optimistic we will continue to work to get that to a better level".

Other worries for the Bahamian hotel industry, apart from having to absorb increased Bahamas Electricity Corporation (BEC) tariff rates, National Insurance Board (NIB) contribution increases and Budget tax rises at the same time, include the threat of a 'double dip' recession in the US and the impact this is having on traveller/consumer confidence.

Adding that he was also researching the impact BEC's recent Abaco outages had on that island's resort industry, Mr Comito said: "We've figured all along that recovery would be a slow, long process, and while we're seeing group booking interest increasing, we're still suffering from not having that business up to pre-recession levels.

"Most of the increase we're seeing is from the leisure market, and until the group market returns with any robustness it will continue to be slow.

"Group business books out months, and sometimes years, in advance. We're encouraged by the increased bookings and interest on the group side, but are still nowhere near the levels of business we had in 2007."

As a result, Mr Comito said the Bahamas had to continue fighting for "market share", and the hotel industry's performance over the last four months showed that its marketing and promotional initiatives, especially the Companion Fly Free programme, had "taken hold in the marketplace". That initiative has been extended into 2011.

Meanwhile, Kerzner International yesterday confirmed that Mississippi State, Virginia Tech, Georgia Tech and Richmond will be the four men's college basketball teams competing in its Battle at Atlantis tournament, scheduled for December 18, 2010, at a 4,500-seat arena at its Paradise Island resort.

The initiative is designed to open up a new market for Bahamian tourism. "We have been doing events like this for years, but on a much smaller scale," said Vincent Vanderpool-Wallace, minister of tourism.

"With the encouragement and partnership with Atlantis, the upcoming Battle at Atlantis in December will attract visitors here who would not ordinarily visit the Bahamas and further expand tourism in the Bahamas for years to come within a new market segment."

"When we decided to get into college basketball, we said let's make it the biggest, most fantastic event ever," said George Markantonis, president/managing director of Kerzner International (Bahamas).

"We know these teams will create an energy and excitement here that is unparalleled. It will be a sports experience unlike any other in a beautiful resort destination, something we are confident our guests and college basketball fans around the nation will love."

The Tribune