The debt-rating agency Standard & Poor’s has warned that a prolonged war in Iraq could threaten the rating for the Atlantis Casino.
S&P said that casinos in the Bahamas and Las Vegas markets that depend on air travel are most vulnerable during this time.
The warning came as major airlines slashed flights in response to weaker travel demand since the start of hostilities in Iraq nearly two weeks ago.
“Standard & Poor’s does not intend to take any immediate rating actions within the gaming sector as a direct result of the commencement of the war,” the rating agency said.
“However, a prolonged war that has a greater-than-expected effect on the economy could lead S&P to revise the ratings.”
S&P pointed out that it is likely that the outbreak of war has been accompanied by a decrease in bookings for both business and leisure travel.
Minister of Tourism Obie Wilchcombe, who is closely monitoring the airlift situation, said he is confident that Atlantis will retain its competitive edge, despite the S&P concerns.
“When most properties around the world were struggling after September 11, Atlantis, through its very aggressive and creative marketing strategy was able to bring hundreds of thousands of people to the Bahamas and keep their hotel near full,” Minister Wilchcombe told the Bahama Journal.
“I’m very comfortable with Atlantis and Atlantis management and certainly with its creative ability, they seem to know how to handle the market and they know how to appeal to the market and bring the numbers in, so at this point, I think Atlantis is just fine. Whatever has to be done would certainly be done after evaluation and I think Atlantis will fear very well.”
Meanwhile, more carriers announced additional cuts in recent days.
The financial crisis is so severe among some airlines that service the Bahamas it is forcing them to take drastic measures. For instance, American Airlines, the world’s number one carrier, said last Thursday that it will cut international flights by six percent in April to meet a downturn in travel bookings due to the war and could make additional reductions if traffic remains slow.
Continental Airlines, meanwhile, announced that it will cut its workforce by about 1,200 people by the end of the year to save $500 million.
Company officials say more layoffs are planned if war with Iraq is prolonged and air travel remains soft.
Tourism officials have long feared that war could deal a drastic blow to an already stable Bahamian economy given that during the Gulf War in 1991, tourism dropped off by about 20 percent.
Minister Wilchcombe said that because of the war, he is increasing efforts to ensure that the Bahamas does not have to resort to discounting and that cancellations are limited.
“We’re watching against that,” he said. “And we are hoping not to even enter into that realm, simply because once you go there it’s difficult to come back from there. So we don’t want to ever have to find ourselves in that hole again.”
Meanwhile, the assessment from some local travel agents is that business is still steady despite numerous warnings from financial experts and analysts to limit spending and increase savings, although others are indicating that there are slight changes.
While there is a tendency for persons to remain close to home during war time, Judy Bonaby, an agent at Destinations Travel, told the Bahama Journal that since military action started in Iraq, bookings have remained strong.
Beverly White, who works at Fiesta Travel and Tours, added that there has also been no reduction in business at her company since the start of aggression in Iraq.
Worriers about travel business being affected have plagued even hoteliers with the president of the association that represents over 30 local hotels, Jeremy MacVean, pointing out that many airlines are reducing flights to destinations that include the Bahamas.
Other travel agents are reporting a falloff in business.
But Keva Johnson, an agent at V & B Travel and Tours, said the slowdown in bookings at her agency may be more seasonal than an effect of the war.
The Bahama Journal
