Slow US Economy May Affect Hirig In Bahamas Hotel Sector

“The impact that it would have, I think, would be more on the area of expansion of employment, where businesses can really grow to add incremental labor,” said Sands in an interview with The Nassau Guardian.

He noted, however, that the hotel sector has seen growth over the past nine months compared to the previous year.

“And our recent figures have indicated that we continue to show improvement. Now that has been stimulated by the type of aggressive promotions we have in the marketplace, in Sands: US economic growth rate could impact hotel hiring  particular, the companion flies free program,” said Sands.

“And so we believe that while this momentum may have slowed in our main market improvements are still taking place, and we are still the beneficiaries of those improvements, albeit small.”

The U.S. economy slowed to an annual growth rate of 2.4 percent in the second quarter. It had grown at a faster pace earlier in the recession recovery period, rising at an annual rate of 5 percent at the end of 2009 and then 3.7 percent in the first quarter of this year. There are fears that the U.S. growth rate will further contract to 1.5 percent in the second half of 2010. According to preliminary statistics released by the BHA and the Ministry of Tourism, the 14 major New Providence hotels recorded a 71.5 percent occupancy rate for June compared to 65.9 percent in 2009.

This occupancy rate, combined with an increase in the average daily room rate (ADR) of $15.17, generated a 16.3 percent room revenue boost and an 8.5 percent increase in room nights sold. For June 2010, the ADR was $225.55 compared to $210.38 last year. Of the 14 properties, nine reported increases in their room revenue, with seven showing double-digit growth. Sands said during this period when growth in the U.S. is slowing — but there is still growth — there may be stabilization regarding the existing workforce.

Many in the tourism sector in The Bahamas were hoping for more robust growth in 2010, with the global economy stabilizing. However, the debt problems in Europe, and now the slow growth in the U.S., appear to have ended that possibility.

“Well, I think it might not be robust. But I still think you are going to see some improvement in 2011 over 2010 – maybe not at the same levels that we had anticipated,” said Sands.

The Nassau Guardian
August 3, 2010