Hotel Industry Fortunate To Have Marginal Improvements

Strong increases in the average daily room rate (ADR) since April support the overall boost to room revenue, according to preliminary statistics released by the Bahamas Hotel Association (BHA) and the Ministry of Tourism.

The year-to-date occupancy came in at 68.2 percent by the end of August, down from 69.3 percent last year, while the ADR for the period came in at $248, up from $241.06 year-on-year.

But as room rates have firmed year-on-year, occupancy in major hotels flattened out in May and declined every month through August.

“While we anticipated marginal improvements in occupancy year-to-date, given the continued uncertainty of the US and global economy, bad weather in the beginning of the year affecting travel from our second largest market, the US Northeast corridor, and the impact of Hurricane Irene, we are fortunate to be performing at the level we are,” said Stuart Bowe, the President of the BHA.

“We anticipate year-on-year improvements over the last four months of the year and are hopeful that we will end the year slightly above 2010.”

The 14 major hotels in the Nassau/Paradise Island market covered by the preliminary statistics saw August occupancy rates fall to 64.9 percent, down from 69.2 percent year-on-year. The rate trails far behind August 2008’s 75.3 percent. Although the month saw the ADR climb to $220.08 from $210.56 in 2010, it still trailed August 2008’s $229.61.

According to the preliminary results, August 2011 showed total room nights sold fell 17 percent with room revenue shrinking 20.4 percent, both compared to 2008 results.

A BHA official reported that Hurricane Irene thwarted what otherwise would have been increases for that month, as compared to 2010.

For April, May and June 2011, the occupancy rates were 74.1 percent, 61.1 percent and 68.7 percent respectively, compared to 72.8 percent, 60.9 percent, and 71.5 percent for comparative months in 2010. July posted occupancy of 77.7 percent, down from 78.2 percent the previous year, though ADR was up to $250.29 from the $229.47 average in 2010.

Year-to-date, room nights sold were down 1.2 percent for the period. It all started with January’s 9.8 percent fall-off year-on-year. February through March saw some inroads made on that shortfall, with positive gains posted, but June, July and August experienced fall-offs of 4.4 percent, 0.3 percent and 3.6 percent respectively to undo any gains made earlier.

The aggregate results for the Nassau/Paradise Island market could mask challenges some of the larger properties in the market face. Only six of the 14 hotels reported revenue increases in August, although five of them posted increases above the 10 percent mark. Four of them showed double-digit increases in room nights sold.

Of the eight hotels that saw revenue declines in August, six were reported to have had decreases above 10 percent. Four of them saw declines in both ADR and room nights sold.

Stewart Miller
The Nassau Guardian
Published: Oct 04, 2011