The nation’s hoteliers have confirmed the difficulties they faced in 2008 while painting a challenging picture for 2009. They also presented a number of priority initiatives, which should be undertaken to address the tourism industry’s downturn as part of the Bahamas Hotel Association’s Annual Industry Performance and Outlook survey.
Hoteliers attributed the state of the US and global economy as the primary reason for a decrease in business activity, but also cited high airfares and the frequency of airlift as contributing factors.
The high cost of utilities and business operations were also cited as key factors affecting business profitability according to the hoteliers.
Some hoteliers also pointed to deficiencies in customer service, the poor quality of our infrastructure, and the overall appearance of the islands as factors that need to be addressed to stimulate an increase in visitor arrivals to The Bahamas.
"The past year has been a difficult one for many hoteliers, their employees, and for the nation as the impact of the world recession and decline in travel began to be felt in earnest. This year will be no less difficult" states BHA President Robert Sands.
"Despite our challenges, we are encouraged by the number of initiatives which are being undertaken or planned by the public and private sectors to mitigate the impact and improve our competitiveness. As the world economy rebounds, and it will, we must be better prepared to quickly attract visitors to our shores and ensure they have an exceptional experience, one that each of us plays a role in providing." he added.
Seventy-eight percent of hoteliers reported a decline in revenue and room occupancy in 2008. The same percentage expects further declines in 2009. Business profits, which were already reported down by most hoteliers in 2007, declined again in 2008 with 52 percent reporting a net loss, 39 percent, which reported a significant decline against the previous year. The outlook for 2009 continues a downward trend, with 78 percent of hoteliers anticipating a decline in profit or losses.
Nearly two-thirds of hoteliers (65 percent) reported a drop in employment levels in 2008. While any drop in employment in 2009 is not expected to be significant, 65 percent of respondents expect employment levels to be ‘down some’ this year. Eighty-three percent reported a reduction in the work week for some employees as a result of reduced business activity in 2008.
Responding to the competitive market and consumer interest in values and deals, most hoteliers reduced prices in 2008. Sixty-five percent reported a slight drop in prices last year. Sixty-one percent expect declines in pricing in 2009. To promote those values, 74 percent increased their marketing and promotion budgets in 2008.
The recession has had an impact on capital spending, with only 22 percent reporting an increase in 2008 and with less (9 percent) spending expected in 2009.
Employers have not curtailed employee training, recognizing the critical importance of improved customer service training, particularly in this downturn. Ninety-six percent continued to conduct employee training throughout 2008, while 35 percent actually increased spending on training last year.
Hoteliers were asked to identify priority initiatives; which BHA, the Promotion Boards, and the Ministry of Tourism and Aviation should be working on in 2009 to address the industry’s challenges.
Increasing airlift and lower airfares topped the list of priorities for 2009, followed by the need for beautification of the islands and stepped up marketing efforts by the public and private sectors.
"Efforts are well underway both by the Ministry and the private sector to address the airlift challenges. Some results have been announced while others are being worked on. We hope that this will make a difference in 2009." states BHA President Sands. "The Government is to be commended on the beautification and clean-up program which has been launched. The improvements are apparent and visitor feedback has been positive. Tourism stakeholders have stepped up their individual and joint marketing efforts and commitments to further collaboration have been made. We take these recommendations from our members seriously and are working on several fronts to address them" he added.
President Sands referenced other priority initiatives recommended by members including the need to reduce the high cost of utilities and business operations. "A number of things are being done by hoteliers to help reduce the cost of utilities and operations without compromising the quality of services offered to our guests. Still, this may not be enough, as some hoteliers are flirting with economic survival. We are presently studying steps which have been undertaken by the public and private sectors elsewhere in the region to better understand how we might better address our own situation" according to Sands.
Further addressing the industry’s challenges, and supporting a call to improve customer service in all areas of the visitor’s encounter, BHA and individual hotels have stepped up customer service training with hundreds of employees going through training since last fall and more is being planned. "The training, along with a growing awareness by employees in the tourism industry that our bread and butter is determined in large part by the quality of service we deliver, it is starting to show some positive results," said the BHA President.
- Austin DWI - New York DWI