The Central Bank of The Bahamas reported a devastating turn for local tourism toward the end of 2008, with tourism receipts plummeting nearly 38 percent in the month of September compared to 2007.
The bank’s latest Monthly Economic and Financial Report highlighted the gloomy outlook for tourism and the overall Bahamian economy, which continued to weaken over the last few months and into the new year.
The report, the first for 2009, said the outlook for tourism remained weak, "hampered by uncertainty in US households’ finances, and the foreign investment climate depressed, owing both to tight credit markets and the negative short-term outlook on projects’ returns".
"Despite recent significant reductions in global crude oil prices, domestic inflation continued to firm, reflecting the lagged effect of earlier price increases on finished goods and transportation costs," the report said. "Meanwhile, monetary developments featured a reduction in liquidity and external reserves, as faster credit growth outpaced firmer gains in the deposit base".
Tourism Takes A Hit
Tourism was specifically highlighted in the January 2, 2009 report, which showed that there were declines overall for the industry.
This supported Prime Minister Hubert Ingraham’s recent assessment that tourism for the country is in "a great deal of trouble." The latest reports from the Ministry of Tourism also showed that travel to The Bahamas is at an all time low, having decreased significantly from 2007 to 2009.
"In the tourism sector, although cumulative data for the first nine months of 2008 indicated a 5.8% improvement in hotel room revenues, the more recent slump in performance was highlighted by a 37.7% falloff in comparative receipts for the month of September," the Central Bank report stated.
The report also showed that there was a one-third decline in occupied hotel room nights, alongside a 6.3% drop in average nightly room rates.
"While the average room rate appreciated by 9.4% on a year-to-date basis, room night sales contracted by 3.3%," the report stated. "The industry slowdown was broad-based, with New Providence properties experiencing a 36.9% reduction in September revenues, cutting into a 10.6% cumulative gain for the first nine months of the year."
The report also focused on tourism in the nation’s second city, Grand Bahama, where it reported that in September losses were estimated at 37.1%, where room revenues declined on a year-to-date basis by 18.7%.
"Meanwhile, the Family Island surveyed properties experienced a nearly 50 percent contraction in revenue during September and 6.8% reduction for the year-to-date," according to the report.
"While reduced room sales featured all of the trends, September pricing discounts were estimated at 4.5% for New Providence, 3.5% for Grand Bahama and 34.7% for the Family Islands."
Inflation Up
The report also showed that over the last twelve months up to November of 2008, inflation advanced by 1.90 percentage points to 4.4%.
"The largest cost increases were noted for furniture and household operations (6.8%), other goods and services (6.8%), food and beverages (6.3%), medical care and health (5.0%), transport and communications (3.4%) and housing (3.3%); while gains of less than 3.0% were registered for the remaining categories," the report said.
"In contrast, as oil prices continued to trend downwards, the average retail cost of gasoline in New Providence declined on a monthly basis, by 21.2% to $4.05 per gallon and diesel by 20.0% to $3.89 per gallon."
These statistics compared to respective prices of $4.56 and $3.97 per gallon in November 2007.
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