Preliminary data from the Central Bank of the Bahamas’ Monthly Economic and Financial Developments, for February 2014 suggest a lacklustre outturn for the tourism sector over the last month.
According to the report released last week, the data analysed reflected persistent sluggishness in the high value-added stopover visitor segment.
“Based on a sample of large hotels in New Providence and Paradise Island, total room revenues declined further in February, by 2.8 per cent, partly influenced by weather-related cancellations,” the report read.
“This, combined with a modest reduction in available room inventory, led to a 30 basis point drop in the occupancy rate, to 65.6 per cent, with the average daily room rate (ADR) also lower by 0.4 per cent at $250.57.”
The Central Bank report also noted that domestic economic activity remained relatively mild during February, constrained by softness in the key tourism sector—although foreign investment-led activity sustained growth in construction output and related employment opportunities.
“Expectations are that the domestic economy will sustain its mildly positive trajectory over the near-term supported by several varied-scale foreign direct investment projects in both the capital and several Family Islands,” the February report added. “In addition, the performance of the tourism sector is anticipated to show some improvement over the next few months, as the key stopover segment of the market recovers – although softness in some of the major source markets, combined with sustained regional competition could dampen this outlook.
“In this environment, a gradual improvement in employment conditions is expected, with the majority of the job gains accruing to the services sector. Domestic inflation should remain subdued, reflecting global expectations of relatively stable to declining international oil prices; however, modest growth in consumer prices is projected ahead of the implementation of the Government’s Value-Added Tax (VAT).
The report also added that in the fiscal sector, the achievement of an improvement in the overall deficit and the relevant debt indicators remains dependent on the broadening of the growth momentum, as well as the effectiveness of government’s announced measures to widen the tax base and curtail expenditure growth – the cornerstone of which is the VAT.
