With the economy still recovering from the economic fallout of Sept. 11 and the War in Iraq leaving the world in a state of uncertainty, hotels and other sectors in the economy directly impacted by tourist arrivals prepared for another lean year. In a March press release, The Bahamas Hotel Association (BHA) stated that so far, hotel occupancy in the country had not increased in comparison to 2002. the statement also expressed concern over the War in Iraq stating that if the war was prolonged, it could have an impact on investment capital for the hotel sector.
Once the war became a reality, some hotels reported seeing little difference in occupancy levels. So while some hotels were reporting record numbers, others were experiencing dismal results. In an Aug. 12 article, Jeremy McVean, president of The BHA expressed concern over what he called growing disparities in performance between different hotels. He noted that while the BHA was delighted by the fact that some member properties were weathering the bad times well, he implored that attention be given to properties that were not fairing as well. “We must also keep an eye fixed on the other properties that comprise the larger part of the nation’s hotel sector.”
The BHA president continued that the average hotel in the country were barely able to maintain occupancy levels of 20 to 30 per cent.
The year got even leaner for hoteliers as they prepared for the third quarter, traditionally a slow period in the hotel industry. The Guardian interviewed four major hotel operators in New Providence in early September and received very dismal responses for projected occupancy figures for September and October. When the actual results for September came out a month later, most of the conservative projections proved accurate.
September’s results showed that five of the major hotels on New Providence and Paradise Island had occupancy levels of less than 30 per cent. The South Ocean Golf and Beach Resort had the most disappointing results compounding an already difficult year for the hotel which had recently announced that due to the poor performance of the hotel over the years, it had to lay off 50 per cent of employees and close 100 guest rooms.
Around this time, the British Colonial Hilton, a sister property to South Ocean, received intense scrutiny after a report was leaked to the press outlining that since the hotel’s inception, it has produce minimal returns for its investors and recently posted accumulated deficits of $34 million.
In an interview with The Guardian a few days after the information in the report was made public, Michael Hooper, general manager at the Hilton said that the information that some hotels were not making a profit should stir concern within an economy heavily dependent on tourist dollars. He noted that news of this nature could prevent the entrance of new investors. “If they see existing investors having a hard time then they might say: I’m not sure this is the place I want to invest my money,” he said in that interview.
With the advent of Thanksgiving, hotel news got better. Several hotels in New Providence and Grand Bahama interviewed by The Guardian immediately before Thanksgiving reported positive occupancy projections ranging from 89 to 99 per cent. Also reporting positive occupancy projections was the newly opened Four Seasons Resort at Emerald Bay, Exuma. The hotel, which opened in November added 400 new jobs to the Bahamian economy.
Although the winter season appeared rosy according to projections by the majority of hotels, the initial positive projections now appear uncertain as 11 hotel properties on New Providence and Paradise Island are currently engaged in tense negotiations with the Bahamas Hotel Employers Association.
By Martella Matthews, The Nassau Guardian
