New data from The Central Bank of The Bahamas (CBOB) shows just how much of an impact the COVID-19 pandemic has had on the tourism sector and the wider economy.
The Monthly Economic and Financial Developments (MEFD) report for April showed that total visitor arrivals declined by 59.7 percent in March.
This sharp decline reflects the impact of global travel restrictions related to COVID-19 and resulted in a 14.7 percent fall in arrivals for the first quarter of 2020, compared to the 12 percent growth experienced in the first quarter of 2019.
“Specifically, total visitors to New Providence contracted markedly by 64.6 percent, contrasting with the 20.9 percent growth in the prior year, as both the sea and air components fell, by 66.7 percent and 60.2 percent, respectively,” the report released this weekend noted.
“Similarly, underpinned by reductions in both air (74 percent) and sea (65.9 percent) traffic, total arrivals to Grand Bahama decreased sharply by 66.9 percent, extending the 1.7 percent downturn recorded in the previous year. Likewise, visitors to the Family Islands reduced by 46 percent, exceeding the 6 percent falloff in 2019, amid respective declines in the air (68.9 percent) and sea (40.3 percent) segments.”
Regarding hotels and accommodations, the Central Bank reported a related deterioration in hotel sector performance in March, with the average hotel occupancy rate seeing a significant 41.8 percent decline, compared to the 86.7 percent growth during the same period last year.
“The number of room nights sold contracted by 56.3 percent, while the average daily room rate (ADR) reduced by 15.5 percent to $300.20, resulting in a 59 percent falloff in room revenues. Over the three-month period, the occupancy rate fell by 14.8 percentage points to 63.2 percent, as the number of room nights sold decreased by 21 percent. In addition, the ADR moved lower by 9.3 percent to $273.57, with room revenue declining by 28 percent,” the report noted.
“With regard to the vacation rental market, data provided by AirDNA for the month of April showed a 59.4 percent falloff in total room nights sold, underpinned by contractions in bookings for entire place listings and hotel comparable listings, of 60.1 percent and 52.1 percent, respectively.
“Conversely, the average daily room rate for entire place listings and hotel comparable listings firmed, by 5.1 percent and by 3.8 percent, to $427.77 and $166.16, respectively.”
Similarly, the Nassau Airport Development Company Limited (NAD) has reported a 33 percent decline in outward bound traffic over the first four months of the year, which is a turnaround from the 21 percent increase in the preceding year.
Broken down by region, the dominant U.S. component fell by 37.9 percent, after growing by 23.1 percent last year. The non-U.S. international component declined by 33.2 percent, overturning the 10.4 percent gain in 2019.
“With the closure of the borders in full effect, data provided by NAD revealed that during the month of April, total international departures contracted to a mere 445, relative to the prior year’s 18.3 percent growth to 160,275,” the CBOB stated.
“In the previous year, the expansion was broad-based with U.S. and non-U.S bound departures strengthening by 21.3 percent and by 2.8 percent, respectively.”
In the monetary sector, CBOB stated that while external reserve balances are anticipated to decline due to the falloff in tourism earnings, external balances are projected to remain more than adequate to support the Bahamian dollar currency peg.
“Amid the COVID-19 pandemic and ensuing travel restrictions, external reserves reduced by $15 million to $2,034.9 million during the review month, vis-à-vis a $191.2 million growth registered in the prior year. Underpinning this development, the Central Bank’s net foreign currency transactions with commercial banks reversed to a net sale of $41.2 million, from a net purchase of $196.5 million in the previous year,” the MEFD stated.
“Further, commercial banks reported a net sale of $49.2 million to their customers, a turnaround from a net intake of $187.9 million in 2019. In a slight offset, the Central Bank’s foreign currency transactions with the public sector recorded a net purchase of $25.9 million, contrasting with a net sale of $11.2 million last year.”