TOURISM LEVELS DROP IN BAHAMAS FOLLOWING ECONOMIC

UNCLAS NASSAU 000765 STATE FOR WHA/CAR E.O. 12958: N/A TAGS: ECON ELAB BF SUBJECT: TOURISM LEVELS DROP IN BAHAMAS FOLLOWING ECONOMIC DOWNTURN IN U.S. ¶1. Summary: Tourist numbers in The Bahamas have decreased following the recent economic downturn in the U.S. Newly released visitor arrival numbers show a 9.6% drop in overall numbers for the first half of 2008. The economy of The Bahamas is dependent on tourism, which accounts for nearly 70% of the work force. Hotels are reporting low occupancy rates, many below 35 percent. As a result several have had to reduce staffing hours or lay off employees. Local media report that this downturn in the tourism sector is the &true category six hurricane8 for The Bahamas. End summary. -------------- Significant Drop in Tourist Arrivals -------------- ¶2. Recently released visitor arrival numbers from the Ministry of Tourism and Aviation show a 6% drop in visitor numbers in July and a 9.6% drop in overall numbers for the first half of 2008. Tourist numbers traditionally drop during the months of September and October but this year is lower than average due to the three hurricanes that passed through the Caribbean region in September and the economic downturn in the U.S. In addition, travel from The Bahamas to the U.S. has declined by 30% according to the Department of Commerce. This decline can also be attributed to the recent economic downturn in the U.S ¶3. Hotels have reported low occupancy rates and some are unable to continue operating at current staff levels. Occupancy at The British Colonial Hilton has dropped 8 percent from 2007 levels; overall occupancy rates in Nassau have dropped 21 percent. Many resorts have cut back work hours for each employee to two or three days a week so that workers can remain on staff and receive a minimal paycheck. Cruise ships, which make up a large portion of the tourist market, are also reporting low occupancy levels. The hotel industry blames the economic downturn in the U.S. for the fall in tourism, saying American citizens are not planning vacations when they are worried about retirement funds. Despite the increase in numbers of European and Latin American travelers to The Bahamas this year, the nation is still dependent upon the millions of U.S. citizens who visit every year. -------------- -------------- Ministry Challenges Service Industry to Raise Standards -------------- -------------- ¶4. Director General of the Ministry of Tourism and Aviation, Vernice Walkine, publicly pushed tourism sector employees to provide better service to the fewer tourists still coming to The Bahamas. Walkine also made the politically incorrect assertion that service quality would be higher if hotel jobs were given to third country nationals. It is clear the GCOB is nervous about the future of the economy and is encouraging Bahamian citizens to take responsibility for their part in providing tourists to the island a quality experience that will encourage repeat visits. SIEGEL