Central Bank: Hotel room revenue, occupancy rate decline in Nov.
Guardian Business Reporter
Published: Dec 28, 2012
Hotel room revenue in Nassau and Paradise Island for November dropped by 4.1 percent year-on-year according to the most recent Central Bank report, with the occupancy rate decreasing to 60.6 percent.
The figures were revealed in the Central Bank’s Monthly Economic Financial Developments (MEFD) report for November 2012, which attributed the decline to hurricane conditions that affected travel.
“Indications are that the tourism sector was negatively affected by the impact of Hurricane Sandy on the eastern coast of the United States, which disrupted travel itineraries and offset the benefits arising from the hosting of two annual international sports events in New Providence,” the report said. “Overall, hotel room revenue, based on a sample of properties in New Providence and Paradise Island, declined by 4.1 percent in November over the previous year. There was a 3.3 percentage point decrease in the occupancy rate to 60.6 percent, which outstripped the 1.2 percent hike in the average daily room rate (ADR) to $203.57.”
The decline in room revenue and the occupancy rate was not felt during the third quarter. According to the Central Bank’s Quarterly Economic Review for September 2012, room profits grew by 1.6 percent during the quarter. The increase was credited to elevated wedding and group business. The average hotel room occupancy rate was higher compared to the corresponding period last year, rising to 68.9 percent from 63.9 percent. Hotel occupancy taxes for the quarter grew by 23.9 percent, which translated into a $1.8 million receipt.
The MEFD report noted that hotel activity year-to-date surpassed 2011’s performance according to the Central Bank, with total room revenue increasing by 4.5 percent and average occupancy rates at 69.2 percent compared to 64.5 percent a year earlier. However, the average daily room rate went down by 3.2 percent to $225.77 – which also dropped by 6.3 percent to $205.55 in the third quarter.
The report further noted that growth in the tourism sector is expected to continue which should result in improved hotel traffic, but the status of the United States economy will be a key factor.
“The modest improvement in the domestic economy noted during the year is expected to continue into 2013, supported by steady gains in tourism output, based on the ongoing recovery in the key group segment of the market, alongside foreign-investment led construction sector activity,” the report said. “However, the outlook remains subject to a number of downside risks, arising mainly from the United States economy, where the implementation of fiscal austerity measures could restrict that country’s economic growth in the near-term.”