As The Bahamas awaits the full reopening of its tourism sector, research continues to suggest that economies dependent on tourism will continue to face depressed visitor numbers into 2023.
A Moody’s Investors Service research article contends that consumer health concerns and governments’ travel restrictions will continue to affect visitor numbers in the near-term for tourism-dependent economies.
Prime Minister Dr. Hubert Minnis, speaking during a press conference to update the nation on COVID-19 on Monday, said that the country “must get our tourism sector up and running as safely and as rapidly as possible”.
“Thus far, there is no economic sector as prepared to deliver the range of employment and the depth of tax revenues with great immediacy like tourism,” Minnis said.
“Our task now is to restore our confidence in ourselves by shutting down community spread and flattening the COVID-19 curve of transmissions and infections once again over the next several weeks.”
Moody’s research article explained that weakened economic conditions and less disposable income will affect the number of people traveling as countries reopen their borders.
It added that business travel, a large source of room nights for large resorts like Baha Mar and Atlantis, will also be greatly affected.
“The reduced demand for travel will significantly reduce revenue for a host of industries across corporate and governmental issuers,” the article states.
“Willingness to travel will remain subject to consumer sentiment about the perceived safety of travel on shared transportation — planes, trains, cruise ships — and in shared spaces — airports, hotels, theme parks.
“These attitudes are likely to remain in place for the most risk-averse traveler until the spread of the virus is largely contained, which is increasingly unlikely in the near term as cases increase in many regions globally.
“Weakened economic conditions will also pose a strong impediment to fast recovery to pre-COVID travel levels. Our economic forecasts assume that most mature economies will not recover to 2019 levels of economic output until 2022 or later. The lower levels of economic activity will translate into the lower demand through two channels; lower disposable income will lead to declines in leisure travel and lower corporate earnings will result in reduced corporate travel budgets.”
According to the article, enplanement levels, which are the number of people departing from US airports, reveal that a tourism recovery could be years away based on economic conditions in the US, The Bahamas’ largest source market.
“The projected high enplanement case represents travel levels when average airfares are typically low while the projected low enplanement case represents travel levels when average airfares are typically high,” the article states.
“Both show that a recovery based on economic conditions in the US would be years away. The small tick down in actual enplanements in the first quarter of 2020 demonstrates that the behavioral changes will cause actual levels below the historical trends.”