By RUPERT MISSICK Jr
THE poorly performing stopover visits so far for The Bahamas in 2013 will prompt a downward revision of mega resort Baha Mar’s growth forecast for 2013, currently at 2.5 per cent.
However, officials at the resort remain optimistic, saying that its investment in Bahamian tourism is expected to produce a major spurt in services income, beginning in late 2014.
Projections show Baha Mar providing a growth spurt of 14.7 per cent of GDP in 2015, the first full year of resort operations.
First-quarter 2013 stopover arrivals for the Bahamas fell by 10 per cent year on year, which, according to the Caribbean Tourism Organisation (CTO) was due to muted US tourism demand and stiff competition from rival destinations. This represents a decline of 20 per cent from their 2008 peak.
First-quarter data shows a progressively intensifying slide in tourism, with year-on-year declines of 4.5 per cent in January, 10.1 per cent in February and 13.2 per cent in March. The March performance was particularly poor, given that the Easter holiday period fell inside the first quarter of 2013 and still failed to boost arrivals.
The Central Bank of the Bahamas (CBB) reports that hotel occupancy levels in the first quarter fell by 3.2 percentage points to 68 per cent in large properties in Nassau, the capital, partly offset by higher room rates. Cruise passenger numbers increased by 5 per cent year on year to 65,327 in the first quarter. However, given their much lower spend per person, increased cruise arrivals offset only around 10 per cent of the downturn in stopover arrivals.
However, Baha Mar officials said that although the short-term outlook for tourism remains bleak and is having a negative impact on economic growth, investment in the giant Baha Mar resort will provide a strong growth boost.
Research commissioned by Baha Mar shows a significant economic impact from the project during the construction phase, which is now in progress. Estimates indicate that the direct and indirect impact of the project contributed 5 per cent of GDP growth in 2011-12. Contracts with local construction firms amount to 19 per cent of a total of US$2.1 billion, without which the Bahamas’ GDP would have contracted by 2.7 per cent during 2012.
Projections show Baha Mar providing a growth spurt of 14.7 per cent of GDP in 2015, the first full year of resort operations, as vast new hotel capacity is added to services output. An ongoing contribution to GDP of around 12.8 per cent is also forecast.
On site visitor spending is projected to reach US$1.2 bilion in 2016, with an additional US$50 million in off-site spending. Vigorous marketing is expected to attract visitors who would not otherwise have visited the Bahamas. However, some negative impact on other Bahamas offerings will partly offset gains from Baha Mar.