Rising Costs Of Travel To Nassau Of Concern To Tourism Industry

In an exclusive interview with The Tribune yesterday, George Markantonis said the company that owns and operates Atlantis has noticed “worrisome” increases over the last year in the cost of travel to The Bahamas by air.

“My criticism isn’t that the airlines don’t know what they are doing. I think they are being very successful with it otherwise they would not be doing it. My worry is that this may be hurting our destination,” warned Mr Markantonis.

Figures obtained in the last several days by Kerzner International from the Nassau Paradise Island Promotion Board show the total number of flights coming into The Bahamas was down year-over-year by 16.3 per cent in March, with the number of seats available to buy correspondingly reduced by 16.5 per cent.

American Airlines has “drastically cut” its flight availability from Miami to The Bahamas, noted Mr Markantonis, as has Continental, and there have been no flights to Nassau from La Guardia airport in New York since Delta stopped its service in August 2010, representing a loss of 50,000 seats coming into The Bahamas per year by that route.

Meanwhile, the cost of flying to Nassau in the next seven months from major US hubs such as Fort Lauderdale, Miami, Newark and JFK airport rose by an average of 28 per cent in January over 2010, 41 per cent in February and 27 per cent in March, according to data compiled in the last 72 hours by Kerzner’s hotel and flight booking arm, Paradise Island Vacations, following inquiries by the resort.

Kerzner International now plans to immediately seek to meet with airlines servicing The Bahamas to discuss what it deems a potentially significant obstacle to maintaining and growing arrivals to The Bahamas.

“We definitely intend to speak with our airline partners about this. We’ll be initiating conversations right away. We also believe the government will be doing the same thing. Frankly it’s critical for the destination,” said the senior executive.

He added that his comments are not to be taken as a criticism of the government, as he believes Minister of Tourism, Vincent Vanderpool Wallace and his Ministry of Tourism team are “very much aware and on top of this.”

The resort company President explained that the disturbing price and seat availability trend first came to the resort’s attention as it saw its outlay on its own executives’ travel skyrocket.

“It’s very hard to obtain accurate data year on year comparing ticket prices on airlines, but we spend a lot for our staff and executives to travel between Ft Lauderdale and New York and Nassau and there have been, in our mind, some remarkable increases in the prices.

“We began wondering if some of the declining leisure business is perhaps due to the fact that the airfares seem so much higher,” he said.

With some further investigation, which will now continue as the resort seeks to determine what is driving the price increases and what can be done about it, the significant across the board trend was discovered.

“These statistics are worrisome and have to have an impact on consumers. They tend to book hotels first and then look around to book their fares. I am sure if you go on the Internet to check fares and the fares seem extraordinarily high you are probably not going to do that destination,” said Mr Markantonis.

He admitted, however, that it is “hard to say” exactly what the impact has been on Atlantis and tourism in The Bahamas so far from the price hikes.

The resort has had a “very strong first quarter” with February, March and April meeting all the high expectations “we’ve had of them, after a shaky January,” he said.

He said the summer season is looking “like it could be quite strong because booking pace is ahead of last year right now” and group bookings are up by 36 per cent.

However, he said, he fears the impact that the price increases are having and will have on the leisure side of the company’s business.

“It’s been a busy period, but we are seeing a lower conversion rate in our bookings (to arrivals) than we were experiencing and we are hearing from some of our callers about their concerns about airfares so we’re now doing a more in-depth study.”

Mr Markantonis said the resort understands there have been increases in fuel prices which may be driving some of the price hikes, but there is concern some other factors may be at play.

“I think part of the reason is that a lot of these locations have less flights coming in. Just in March, according to figures released from the Nassau and Paradise Island Promotions Board (NPIPB), flights year on year were down by 16.3 per cent in March and the number of seats was down 16.5 per cent.

“When the number of seats are going down they are getting better yields on planes and when you fill a plane at 95 to 98 per cent capacity if someone wants to be on that plane they don’t have a lot of choice when it comes to paying what they are asking.”

Adding that he “does not have the answer” to addressing the problem at present, Mr Markantonis also suggested that one potential route to bringing down the cost of travel for tourists to Nassau may be for Bahamasair, the national carrier, to step up and begin providing more and cheaper service from key travel hubs.

“May be we are going to need Bahamasair to help us open gateways and once other airlines see their success and move into these airports Bahamasair would move out and go to another gateway,” suggested Mr Markantonis.

The Tribune