Hotels in New Providence and Paradise Island reported lower total room revenues in February, according to the Central Bank of The Bahamas’ latest economic report.
The bank’s Monthly Economic and Financial Developments (MEFD) report for February noted that those revenues slipped by 6.3 per cent.
“A decrease in room stock at one property combined with a one day reduction in the number of available room nights relative to last year, [which] contributed to a 4.1 percentage point contraction in the occupancy rate to 65.9 per cent,” the report said.
“In contrast, the average daily room rate firmed by 5.5 per cent, reflecting increases in over half of the hotel properties. For the performance over the first two months of the year, hotel receipts decreased by 4.1 per cent, as the contraction in the average occupancy rate, by 2.8 percentage points to 61.7 per cent, eclipsed the 4.5 per cent rise in the average daily room rate to $246.10.”
According to preliminary indicators, domestic economic conditions remained relatively subdued over the review month amid sustained foreign investment-led construction activity, although some signs of softness were evident in the key tourism sector.
On the fiscal side, the overall deficit ballooned over the seven months of the 2012/2013 fiscal year, reflecting a combination of tax-revenue related declines and higher spending.
“Preliminary data on the fiscal outcome for the seven months to January 2013 showed continued deterioration in the overall deficit which widened by over two-thirds with reference to the comparative fiscal period, to $313.1 million. Total revenue declined by $50.0 million to $787.9 million, which represented an estimated 51.3 per cent of the budget projections, while total expenditure, at $1,101.0 million was higher by $74.8 million and equivalent to nearly 53.0 per cent of approved estimates,” the report said.
“The fall-off in revenue was primarily explained by an $80.7 million (18.3 per cent) decline in taxes on international trade, as excise taxes receded by over one-third back to trend levels, following a significant one-time inflow in the previous period,” the report continued. “In a partial offset, a one-off arrears payment contributed to a $37.9 million gain in departure taxes. Comparatively, non-tax receipts grew by $6.2 million to $91.9 million, supported by increases in collections of fines, forfeits and administrative fees.
Meantime, growth in expenditure was mainly attributed to a $48.5 million expansion in recurrent spending to $889.1 million—roughly 53 per cent of budget estimates—buoyed by higher consumption outlays of $25.1 million amid increases in both personal emoluments and purchases of goods and services. In addition, transfer payments rose by $23.3 million, due in large measure to increased subsidies for public health-related activities.
Capital outlays were also higher, by $24.1 million to $138.8 million, primarily attributed to a $27.4 million rise in infrastructure-related spending, while the government’s net lending to public entities increased by $2.3 million to $73.1 million.”
The report added that the deficit was financed mainly from domestic sources, and comprised Registered Stock ($325.0 million), Treasury bills ($54.9 million) and short-term advances ($53.0 million). External financing totaled $214.9 million and included a US$180.0 million loan, as well as draw downs from project-based borrowings.
