Categorized | Business

Tourism Growth Tied To Recovery Of US Economy

Local economists have repeatedly stressed that the US’ economy will have to recover before The Bahamas’ tourism sector sees further growth, and on Friday the Central Bank echoed those sentiments.

In its latest economic report, the bank said even though the global recovery is “fraught with significant headwinds” it will continue to support the improvement in domestic activity.

“Indications are that tourism sector output is poised to benefit further from a number of factors, including increased airlift from several key markets, joint public/private sector promotional campaigns and the hosting of special events,” the Monthly Economic and Financial Developments (MEFD) report for April said.

“However, the prospects for further growth in the sector will depend on the strength of the recovery in the United States economy, which has shown signs of a slowdown in recent months—particularly in the labour market.”

Tourism performance indicators suggest steady output gains during April.

Based on provisional data from a sample of hotels in New Providence and Paradise Island, room revenues rose by 3.5 per cent year-on-year, although below the comparative 9.6 per cent advance in 2011.

Underlying this outturn was a 7.8 percentage point increase in the hotel occupancy rate to 81.9 per cent, which compensated for the 6.6 per cent reduction in the average daily room rate to $272.93.

For the four-month period through April, total room receipts firmed by 7.4 per cent, a reversal from a 0.4 per cent decrease in 2011, as a 5.4 percentage point advance in average occupancy negated the 1.4 per cent decline in the average daily room rate to $259.77.

While the majority of hotels recorded growth in occupancy levels, competitive constraints contributed to declines in average daily rates for more than half of the properties included in the survey.

Tourists contribute $1.5 billion to the Bahamian economy annually.

Meantime, the bank said major foreign investment projects, which are less affected by global developments, alongside the public sector’s ongoing infrastructural developments, should continue to provide positive impulses to construction sector activity and related employment opportunities.

In terms of consumer prices, some firming in inflation is projected in the near-term, as international oil prices remain elevated.

Written by Jones Bahamas

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