Identifier
Created
Classification
Origin
04NASSAU341
2004-02-18 22:01:00
UNCLASSIFIED
Embassy Nassau
Cable title:  

TOURISM UPDATE FOR 2003

Tags:  EINV BEXP ETRD BF 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 NASSAU 000341 

SIPDIS

STATE FOR WHA/CAR/D.OCONNOR,
USDOC FOR ITA/TD/OETCA/BUSBY,
3134/USFCS/IO/WH/MANN, AND
4322/ITA/IEP/WH/OMCB/MBROOKS

E.O.12958: N/A
TAGS: EINV BEXP ETRD BF
SUBJECT: TOURISM UPDATE FOR 2003


UNCLAS SECTION 01 OF 02 NASSAU 000341

SIPDIS

STATE FOR WHA/CAR/D.OCONNOR,
USDOC FOR ITA/TD/OETCA/BUSBY,
3134/USFCS/IO/WH/MANN, AND
4322/ITA/IEP/WH/OMCB/MBROOKS

E.O.12958: N/A
TAGS: EINV BEXP ETRD BF
SUBJECT: TOURISM UPDATE FOR 2003



1. SUMMARY. Led by cruise ship arrivals, particularly to
the Family Islands, overall tourism arrivals to The Bahamas
increased in 2003 for the fifth consecutive year. However,
there was a downturn in hotel room revenues and arrivals to
Grand Bahama also declined slightly. After highly
contentious negotiations, the tourism industry recently
concluded a major a 5-year contract for tourism workers.
The Ministry held the first annual National Tourism
Conference in an effort to inform tourism officials about
changes in the industry and to strategize on keeping The
Bahamas competitive. END SUMMARY.

--------------
TOURISM YEAR END 2003 STATISTICS
--------------


2. In 2003, tourism arrivals for the entire Bahamas
increased to 4,594,042 up from 4,405,971 in 2002. However,
hotel room revenues for the entire Bahamas fell by 4.8
percent in 2003 compared to 2002 levels, dropping to 317
million dollars from 333 million dollars in 2002.


3. Overall average daily room rates for 2003 increased by
5.1 percent to 163.97 dollars over 155.97 dollars in 2002.
The average room occupancy level stood at 59.6 percent for
2003 compared to a 62 percent for 2002.


4. The Nassau/Paradise Island hotel industry represented
268 million of overall room revenues for the first 11 months
in 2003, with an average daily room rate of 187.68 dollars
and an average occupancy level of 66.7 percent. Both
figures fell short of 2002 levels.


5. In 2003, Grand Bahama generated 35 million dollars in
room revenues, with an average daily room rate of 83.95
dollars -- an increase of 3.1 percent over 81.46 dollars in

2002. The average occupancy level for 2003 stood at 48.5
percent -- a decrease of 6.3 percent over 2002 levels.


6. Room revenues in the Family Islands fell 10.1 percent
from 15 million dollars in 2002 to 13 million dollars in

2003. Average room rates stood at 160.74 dollars, only a
slight decrease over the 2002 level. Occupancy levels
increased slightly to 35.3 percent.

-------------- --------------
CHALLENGES AND OPPORTUNITIES FACING THE TOURISM INDUSTRY
-------------- --------------


7. The Ministry of Tourism held its first Annual Bahamas

Tourism Conference during the week of January 26 to discuss
challenges and opportunities facing the tourism industry.
The Director General of Tourism Vincent Vanderpool-Wallace
said that the Ministry's target is to attract five million
visitors to The Bahamas, and increase tourism spending to 2
billion dollars per year by 2005. Some of the challenges
facing The Bahamas that he discussed include: the relatively
high cost of flights to The Bahamas; attracting the best and
brightest Bahamian talents into the industry, and increasing
hotel occupancy. The Ministry also has to tackle the many
complaints by visitors about the high price of the
destination; uncleanliness of the islands, and the request
for more guided tours.


8. A special guest speaker at the conference, marketing
expert Dr. Peter Yesawich, conference attendees of schemes
that would make The Bahamas seem "fresh" to American
travelers. He noted that revamping the Nassau International
Airport is only the first step The Bahamas must take in
order to keep its product "fresh." Yesawich said that there
is a growing interest among Americans for family vacations
and weekend travel, which is a good market for The Bahamas
to target. He also suggested that The Bahamas reach out to
weekday vacationers. Instead of complaining about "slow
months" in the tourism industry, he suggested that the
country build a convention center. He further stated that
The Bahamas should exceed visitor expectations through
exceptional experience and service and fortify and sustain
visitor arrivals through marketing and promotion. He
emphasized that most Americans are looking for something
different when searching for travel destinations and that
The Bahamas should promote diversity by highlighting its
uniqueness and combining it into the visitor's experience.

--------------
HOTEL UNION CONTRACT SIGNED
--------------


9. After 16 months of contentious negotiations, leaders of
the Bahamas Employers Association, The Bahamas Hotel and
Allied Workers Union and the Minister of Labor finally
signed a 17 million dollar, five-year industrial agreement
for hotel union employees on January 29. The contract
provides for an across-the-board increase in salaries for
hotel workers retroactive to January 7, 2003, and is valid
to January 7, 2008. The 16-month contract negotiations have
been the longest in the history of negotiations between the
two bodies. Additionally, the extended negotiation process
resulted in a targeted "slowdown" during the December visit
of South African President Tabo Mbeki, which caused great
embarrassment to Prime Minister Perry Christie.


10. As a result of the long negotiation period and the
labor unrest experienced during this time, the Prime
Minister announced plans to review labor laws in order to
avoid future disruptions in the tourism sector, which
generates 40-60 percent of GDP. The government is
considering the Barbados Protocol Four as a model. The
Protocol is aimed at ensuring the resolution of industrial
issues without causing disruption to the economy.


11. Hotel Union President Pat Bain has, however, stated
that the union resents the position taken by the government
regarding changes to the labor laws and said that such
changes would be met with "strong and endless" resistance.
Bain further stated that whoever is entertaining such a
thought is moving in the wrong direction. Mr. Bain noted
that the union believes that all laws should be progressive
and not regressive, nor should laws be changed as a reaction
to unions exercising their legal right. He stressed that
labor laws should not be made without consultation with all
social partners.

-------------- --------------
ATLANTIS - THE ANCHOR FOR THE BAHAMIAN TOURISM INDUSTRY
-------------- --------------


12. Kerzner International's Atlantis Resort continues to be
the anchor for the Bahamian tourism industry. Kerzner
reported a net income of 3.0 million dollars for the 2003
fourth quarter, compared to a net income of 0.9 million
dollars for the same period in 2002. Adjusted net income
for the quarter was 4.8 million dollars compared to 4.4
million dollars in 2002. Adjusted net income per share for
the quarter was 0.16 dollars as compared to 0.15 dollars
achieved in 2002. Butch Kerzner, Chief Executive Officer of
the company, said that in 2003 they combined strong earnings
performance with major future growth initiatives. During
the 2003 fourth quarter, Atlantis achieved an average
occupancy rate of 73 percent with a 218 dollar average daily
room rate, compared to an average occupancy of 72 percent
and average daily room rate of 216 dollars during the same
period in 2002. The company expects its average room rate
to increase this year by an additional 3 percent for
selected visitors. The high occupancy levels it is
currently experiencing bode well for this prediction.


13. COMMENT: The tourism industry is expected to remain
stable, but sluggish throughout the year. The Ministry of
Tourism has much work to do, however, to maintain its
competitive edge in the industry. Given the slow pace that
the government is moving to launch plans for the
refurbishment of Nassau International Airport, it is
unlikely this major project will be completed in order to
coincide with the scheduled completion of Atlantis Phase III
by the end of 2005, unless Kerzner also delays his project
start date. END COMMENT.

Witajewski