Bahamian Hotel Occupancies Show Promise
• Stronger performance expected for slowest months
• ‘Nudging closer’: Tourism just 10-15% off pre-COVID
• Inflation hits food and drink costs with 10-25% rises
By NEIL HARTNELL
August 25, 2022
Bahamian hotels are eyeing occupancies between five to ten percentage points higher than the norm for the industry’s slowest months, it was revealed yesterday, as it “nudges closer every day” to pre-COVID levels.
Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, told Tribune Business the sector expects “an even better year in 2023” with business volumes presently just 10-15 percent behind those enjoyed immediately prior to the pandemic in 2019 – a record-breaking year for tourism.
He added that the higher-than-traditional occupancies for September and October, regarded as the “shoulder period” for the Bahamian tourism industry, will also help to “increase the days worked” by hotel employees compared to what they typically enjoyed prior to COVID-19
However, Mr Sands told this newspaper that the sector continues to face headwinds generated by global inflation, especially in the food and beverage area, where resort operators have had little choice but to pass some price rises on to guests due to cost increases ranging from 10 percent to 25 percent.
“What we are seeing is business that is slightly better than in the past; slightly slower but not as slow as in the past,” the BHTA chief disclosed of the upcoming fall 2022 period. “We think that the absence of inclement weather, hurricanes and so forth thus far has helped decision-making, and we’re continuing to see some of the impact of pent-up demand post-COVID.
“Recognising that it’s back-to-school, there is a traditional fall-off in occupancies at this point in time. We are seeing a fall-off, but it’s not at the level seen in previous years. Every particular island destination and property is different, but I would say we’re anywhere from five to ten percentage points of occupancy better off than what is was in the past.”
Bahamian hotels traditionally earn the bulk of their profits during the first half of the calendar year, which includes Easter and the peak winter season, and rely on this to carry them financially through the leaner summer and fall period until receiving further boosts from the Thanksgiving and Christmas/New Year periods.
Mr Sands indicated that an improved September/October showing will help smooth this process for the industry in 2022. “Any improvement is important at this time of year,” he explained. “This is the time we have to manage our properties very carefully because it’s easy to lose any gains that may have been made in the first seven months of the year.”
The BHTA president said the benefits will not just be confined to employers. “I think that higher occupancy levels throughout the industry have assisted in not only the retention of staff but have increased the days being worked and, in many cases, the hiring of additional staff,” he told Tribune Business.
Mr Sands said there was nothing to indicate the better-than-normal September and October tourism performance “will change in the short to medium-term”. He added: “The interest in the destination of The Bahamas continues to grow and, certainly, from our source markets all indications are that 2023 should be an even better year.”
Asked how close the hotel and tourism sector were to pre-COVID business volumes, he replied: “Every month we’re nudging closer and closer. There are a number of factors that will play into the industry achieving that. There’s the re-opening of hotels that have been closed, and rooms that have been offline coming online. Once those conditions are in place, and the airlift continues to grow, we’re nudging closer and closer every day.”
Mr Sands said the hotel and tourism industry remains “about 10-15 percent” away from returning to pre-COVID business levels, adding that it felt The Bahamas is being served with sufficient airlift capacity to meet present visitor demand.
However, the sector is not immune from the inflationary pressures besieging the wider Bahamian economy and the world. “That is something we have to continue to monitor and address,” the BHTA president told this newspaper. “Certainly, in our food and beverage areas, there’s no question that the cost of food has been impacted and I think hotels are doing their best to mitigate against making impactful price changes.
“It’s hard to say, but I can say the cost for some items has increased anywhere from 10 percent to 25 percent. It’s not sustainable to continue to absorb those types of increases. It’s a reality, but many companies are doing their best to withstand and hold on to price levels as long as they possibly can.”
Mr Sands said tourism has suffered no negative fall-out despite the US federal health watchdog, the Centres for Disease Control and Prevention (CDC), keeping The Bahamas at a ‘Level 3’ which reflects a “high” number of COVID infections in the country. Yet on Friday, this nation recorded no new COVID cases, with just 13 detected the day before. The Bahamas has just 187 active COVID cases, and just 25 persons in hospital, one of whom is in intensive care.
“Over 97 percent of the guests who are coming are currently fully vaccinated,” Mr Sands said. “I think that most countries are at ‘Level 3’. Nothing has really changed from that position. We would always love to be at ‘Level 2’ or ‘Level 1’, but we are also aware that until we can continue to increase the number of persons who are vaccinated as a country, and continue to hold our COVID-19 positive cases at very low levels as they have been… That’s the desirable position.
“I’m not sure our position [with the CDC] is impacting leisure travel. It may or may not have an impact on group bookings, but we’ve not received that that type of information. The health and safety of the destination, and removal of impediments to travel, are intertwined.
“I think the post-COVID rebound is evident. Certainly I think tourism has demonstrated that the removal of a lot of these impediments have assisted in the level of rebound this year. I think it’s evident by our occupancies, air arrivals and return of our cruise business. All are trending positively in the right direction.”
Mr Sands said the hotel industry was also set to “imminently” set out its formal position on increasing the minimum wage, which was due to have been discussed by the Davis Cabinet on Tuesday. “I can tell you for the avoidance of doubt that the industry supports a reasonable increase in the minimum wage for its associates. The question is what is that minimum wage, and how it should be implemented,” he explained.
