2004 Nassau/PI Tourism in Review

Transcription

1 2004 Nassau/PI Tourism in Review Battered by winds of change and nature, Nassau/PI Tourism in 2004 anchors itself among the World s Best. This captures the essence of this 2004 review of performance of the tourism business in Nassau and Paradise Island. This also seems to support a momentary halt to tourism growth in Nassau/PI due to Hurricanes, Francis and Jeanne, and to strengthen the notion that the Iraq experiment further cements the competitive advantage of a close in destination started by the events of 9/11. The following summarizes that performance. Visitors spent $1.304 billion in Nassau and on Paradise Island in 2004 compared to $1.244 billion in This 4.8% increase in expenditure in Nassau/PI compares to the 0.3% in Grand Bahama and a 26.4 % for the Family Islands. Visitors spent million nights in Nassau and on Paradise Island in 2004 compared to in This 12.1% increase in visitor nights in Nassau/PI compared to a 1.4% increase in Grand Bahama and a 15.6 % increase for the Family Islands. About 922,000 visitors spent at least one night in Nassau and on Paradise Island in 2004 compared to 896,000 in This 2.9% increase in stopovers in Nassau/PI compared to the 0.5 % decrease in Grand Bahama and an 11.3 % increase for the Family Islands. Hotel Room Revenues for the large hotels in Nassau and on Paradise Island in 2004 just topped $290 million and grew by 2.5% over This increase in room revenue in Nassau/PI compared to a 32.6% increase in Grand Bahama s five major hotel properties and a 6.2% increase for hotel properties (excluding Four Seasons) in the Family Islands.Hotel average daily room rate or the room revenue divided by the hotel rooms sold increased slightly from $ in 2003 to $ in Hotel Visitors spent nights in Nassau and on Paradise Island in 2004 compared to hotel nights in This 10.4% increase in Nassau/PI hotel nights compared to a 13.9% increase in Grand Bahama and a 44.8 %increase in the Family Islands. This was generated by about 788,000 hotel visitors in Nassau and on Paradise Island in 2004 compared to 773,000 in This 2.9% increase in hotel visitors in Nassau/PI compared to a 4.8% increase in Grand Bahama and a 32.5 % increase for the Family Islands. There were million cruise visitors coming to Nassau in 2004 compared to million in This 18.7% increase in visitors in Nassau/PI compared to a 60.6% increase in Grand Bahama and a 11.8% decline in the Family Islands. Of 277,140 stopovers, who filled in the recommendation question on the Immigration Departure Card as they left Nassau and Paradise Island, 69.4% said they were very likely to recommend The Bahamas compared to 62.4% of those leaving GBI, and 81.9% of those leaving our Family of Islands. Within Nassau/PI 70.6% of those leaving after staying in hotels on Paradise Island said they were very likely to 1 of 7

2 recommend The Bahamas, compared to 66.9% for Cable Beach and 59.0% of those staying in hotels from Montagu Beach to Arawak Cay. Performance Factors What are the decisive factors driving the Nassau and Paradise Island tourism performance in 2004? First, with the emergence of terrorism, war and increased time spent ensuring that neither show up in an airport nearest you, finding a safe and close destination is primary in vacation making. In this regard, The Bahamas represents probably the best opportunity for Americans to minimize their travel to and maximize their time on our beaches in the sun. There are several indicators of this trend: Stopovers, from the US to The Bahamas have remained steady between 2000 and 2003 and grew by 4.3% in European travel on the other hand feel by 12% between 2000 and 2003, with a further 10.3% decline between 2003 and By 2009,Global Insight forecasts that North Americans vacationing in The Bahamas will be 22% over 2004 levels. By 2009, Global Insight forecasts that Europeans traveling in Europe will grow by 28% while in 2009 levels of North American traveling to Europe will actually fall below Taken together, there is a strong will in people to stay close to home, whether Europeans going to other European nations or North Americans to the Caribbean. Second, among these drivers was the tremendous jump in cruises visitors. In 2004, cruise visitors coming to Nassau grew by 18.7% or by some 362,000 more visitors than in This compares to a 2.9% increase in stopovers some 24,300 more stopovers- and a 2.0% increase in hotel visitors some 15,000 more hotel visitors. This holds true even in terms of expenditures. Given that one stopover visitor spends about the same amount as the total expenditure of 14 cruise visitors, the increment of 362,000 cruise visitors spend the equivalent of about 25,600 stopovers. As noted, stopovers grew about 24,300 visitors. Spurred on somewhat by the events of the hurricane season, a review of the cruising calls show there were some more sustainable reasons for this tremendous growth in that six ships accounted for 50% of the increase throughout all months of They were: Regal Empress, Mariner of the Seas, Carnival Miracle, MS Jubilee, 2 of 7

3 Carnival Gory and the Fantasy delivering from just over 30,000 more visitors to above 80,000 more visitors in On the other hand only four ships accounted for 50% of the decline in cruise visitors brought about by a fewer calls by the Galaxy, Ocean Breeze, Norwegian Dream and Sovereign of the Seas in 2004 compared to Third, the hotel sector s financial performance in 2004 does in no way take a back seat to the cruise sector. In fact, the financial performance of the large hotel sector matched that of 2000 the year most consider to be the best year ever for the hotel sector. Just to review, in 2004, hotel nights grew by 10.4% while the room revenues of large hotels grew by 2.5%. This year s hotel room revenue exceeded the $290.6 million reached in 2000 by these hotels, The little secret of 2004 is that this level was reached despite the removal of 340 rooms from inventory in mid year when the Sheraton Grand shut down. Assuming that the Sheraton had been open and exactly matched the occupancy, room sales and revenue it had in those month closed that they had in 2003, then about $5 million more dollars would have been added to the room revenue total in Nassau, almost doubling the room revenue increase from 2.5 to 4.3%. A further factor behind this hotel performance was the increase in stay of hotel visitors. The average length of stay of visitor in Nassau/PI hotels rose by almost 12 hours. In 2004 average hotel stay was 4.9 nights compared to about 4.5 nights in Finally, hurricanes Francis and Jeanne caused a temporary but severe halt to a robust New Providence tourism year. However, damage to Nassau and Paradise Island was not anyway near as severe as in the rest of The Bahamas or the Caribbean. This frequently resulted in redirected tourist traffic from these areas to Nassau. Daily arrivals to Nassau and Paradise Island hotels tracked from August 25 th to November 30 th GBI and Abaco hotels show: and compared to That from the date of Hurricane Francis, September 3 th, daily hotel arrivals to Nassau stayed a little below 9/11 levels through September 30 th. Tracking hotel daily hotel visitors to Nassau/PI hotels from September 3 rd through the 28 days to the end of September 2004 showed an average of 677 hotel arrivals per day. Tracking from September 11 th to end the end of September 2001 produced on average 715 hotel visitors per day. The average daily hotel arrivals for 2003 in Nassau/PI was 1125 for this time period. 3 of 7

4 That, by November, Nassau and Paradise Island had fully recovered and showed a 11% increase in hotel visitors compared to November That GBI averaged 16 hotel visitors per day form September 3 rd to September 30 th 2004, 354 hotel visitors per day in September following September 10 th, 2001 and 413 hotel visitors per day for September, 2003 for equivalent days. For the month of November hotel visitors were still 50% below November 2003 levels. That Abaco averaged five hotel visitors per day form September 3 rd to September 30 th 2004, 15 hotel visitors per day in September after September 10 th 2001 and 29 hotel visitors per day for September For the month of November hotel visitors were 21% below November 2003 levels. That large hotel room revenue in Nassau and on Paradise Island showed a decline of 24% in September, 2004, a decline of 10% in October, a one percent decrease in November and about a three percent increase to end the year in December. That in contrast Grand Bahama Island large hotels showed room revenue declines of 78.1%, 66.9%, 46.4% and 22%, September through December, respectively. That cruise visitors after initially decreasing in Nassau by 12.1% in September increased by almost 30% in October, by 6.5% in November and by 12.8% in December. This compared to an 80.9% decline to the Family Islands in September and a combined fourth quarter decrease of almost 30%. That GBI saw a decline of 36.7% in cruise visitors in September but rebounded to record a 9.4% increase in the last quarter of Competitive Position How did Nassau s tourism year compare to the rest of the Caribbean? Nassau and Paradise Island is still the premier destination in the Caribbean. Nassau and Paradise Island share of overall tourist arrivals did not slip in 2004, despite the CTO s estimate of seven percent growth in tourist arrivals. In 2004, the 922,000 stopover visitors coming to Nassau and Paradise Island represented about 4.2% of the 21.8 million tourist visiting the Caribbean, almost exactly the same as it was in This compares to 1.7% for GBI and 1.2% for the Family Islands. The hotel picture skews more favourable to Nassau and Paradise Island. According to CTO Smith Travel Research,the international performance analyst, reported, in its 11 CTO member countries, an average room occupancy of 67.9% in 2004 compared to 62.8 in Nassau and Paradise Island s large hotels recorded a 71.2% occupancy rate in 2004 compared to 66.7% in While The Bahamas is in the Smith report and therefore, contributes to the increase in the Caribbean, it is still important to note that occupancy 4 of 7

5 for Caribbean hotel grew by about five points compared to 4.5 points in Nassau/PI. GBI large hotel occupancy grew by 13.4 points and by 2.9 points for the Family Islands, excluding the Four Seasons property in Exuma. Finally, it is in the cruising sector that The Bahamas remains the unquestionable leader and is still growing. Of the 20.5 million cruise visitors CTO estimates to have visited the Caribbean, 3.4 million came to The Bahamas or 16.6% of all Caribbean cruise visitors the leader in the region. The growth of cruise visitors to The Bahamas matched the Caribbean growth of 13 percent, but the significant news is that Nassau by itself is becoming the premier destination of the Caribbean. As noted before, Nassau welcome 2.34 million of these 3.4 million cruise visitors to The Bahamas. The growth in these arrivals outpaced the Caribbean growth by almost six percentage points 18.7% compared to Caribbean s 13%. In 2004, Nassau s share of Caribbean cruise traffic,11.4%, almost catches Cozumel s 14.1% and exceeds Caymen Island s (9.8%) USVI (9.6%) and Puerto Rico (7.8%). GBI share of Caribbean cruise visitors is two percent while the Family Islands attracts almost as many as Puerto Rico at 7.5% of Caribbean cruisers. Forecasts According to Global Insight the US economy is forecast to grow at about 3.3% in 2005, which will sustain the United States as the primary growth engine for the global economy and therein our tourism sector. It makes several predictions that underscore this growth as well as sends several good signals for the tourism industry in particular. First of all, this sustaining 3.3% growth coupled with their prediction of a continued fall in the US dollar with the Euro reaching $1.40 US, makes The Bahamas a more cost attractive destination for Europeans while making The Bahamas a more inexpensive destination for Americans then European ones. Also a low level inflation threat and a steady but low level increase in interest rates and all industry partners should get some relief to their bottom lines in But the really good news from Global Insight is their belief that even major shocks such as 9/11, corporate scandals and the war in Iraq will not derail the economic recovery in the US. Even a 70 dollar a barrel oil shock would only slow economic growth to about two percent in their estimation. Turning more specifically to forecasts for the tourism sector, Global Insight indicates that tourism should see a 4.5% increase in global tourism in 2005, supported by many of the factors previously outlined. In the Caribbean the initial forecast by Insight points to a 4.3% growth in stopovers to The Bahamas and a 6.3% increase in stopovers expenditures. This compares to 4.5% growth in stopovers and a 6.4% growth in stopover expenditures forecast for the rest of the Caribbean. Much of this larger growth in the rest of Caribbean may 5 of 7

6 reflect the lower cost structure of the these other destinations and the established preference for them by those most likely to travel more in 2005 Europeans. Finally given the expected five percent increase in berths in the cruise industry, it is reasonable to expect a similar raise in level of arrivals to The Bahamas in In the short term by the end of June stopovers should increase by four percent into Nassau and Paradise Island. 6 of 7

7 OUR TOURISM BUSINESS Stopovers 04 Stopovers % Chg 04 Visitor Nites % Chg 04 Ave Stay Nassau/PI 921, % 5,260, % 5.7 nts Grand Bahama 374, % 2,065, % 5.5 nts Abaco 99, % 995, % 9.8 nts Eleuthera 36, % 356, % 9.8 nts Exuma 32, % 262, % 8.1 nts Other Islands 95, % 944, % 9.8 nts Unidentified 1, % 13, % 12.4 nts Total 1,561, % 9,898, % 6.3 nts Hotel Visitors 04 Hotel Vsts % Chg 04 Hotel Nites % Chg 04 Ave Stay Nassau/PI 788, % 3,879, % 4.9 nts Grand Bahama 252, % 1,020, % 4.0 nts Abaco 31, % 205, % 6.5 nts Eleuthera 14, % 100, % 6.8 nts Exuma 21, % 113, % 5.3 nts Other Islands 43, % 306, % 7.0 nts Unidentified % % 4.0 nts Total 1,152, % 5,626, % 4.9 nts Cruise Visitors 04 First Port of Entry % Chg 04 All Visitors to Port % Chg % All Cruise Vsts Nassau/PI 1,981, % 2,339, % 69.6% Grand Bahama 327, % 402, % 12.0% Family Islands 1,050, % 1,533, % 45.6% All Cruise Vsts 3,360, % Not Applicable N/A N/A Hotel Statistics 2004 Occupancy 2003 Occupancy 2004 Ave. Daily Room Rate 2003 ADR %Room Revenue Chg Nassau/PI 71.2% 66.7% $ $ % Grand Bahama 62.5% 48.7% $81.18 $ % Family Islands 37.8% 34.1% $ $ % 2004 Spending Nassau/PI GBI Family Islands Total % Chg 04/03 Stopovers ($ml) $1,143.3 $244.6 $305.6 $1, % Cruise ($ml) $157.7 $16.1 $12.0 $ % Other ($ml) $2.5 $1.1 $1.6 $5.2 4% Total ($million) $1,303.5 $261.8 $319.2 $1, % *Large hotels in GBI and Nassau only 7 of 7