Nassau Paradise Island Hotel Performance Analysis

(BIS) - According to preliminary statistics released by the hotel industry and The Bahamas Ministry of Tourism, the 14 major New Providence hotels recorded a 50.2% occupancy rate for October. This compared to 43.2% in 2008. However, this is distorted by the temporary closure of 379 rooms at RIU. Exclude RIU from the 2008 figures and the 2008 September occupancy rate falls to 41.5%. The closure of RUI also distorts the room nights sold picture even more. Room nights sold increased by 2.7% overall, 12.7% when excluding RIU from 2008. However, an eighteen dollars decrease in the average daily room rate1 (ADR) wiped out any gain in hotel room revenue expected from such an increase in room nights sold. In fact, room revenue fell 7.4% in October, - 5.3% excluding RIU from the mix.

For October 2009, the ADR was $167.25 compared to $185.59 last year. October saw available room nights decreased by 11.6%.

Nine of the 13 reporting properties recorded October increases in room revenues that ranged from hardly any increase at all to several properties reporting solid revenue if not substantial growth .  Where decreases in room revenue occurred, it was in all cases double digit. 

Looking at the performance for the year, hotel occupancy stood at 62.3% compared to 66.2% last year. The ADR was $225.44 while January to October last year saw $249.82. Hotel revenue fell 20.4% with 12 of the 14 hotels reporting losses for the year so far. Hotel room nights sold decreased by 11.8%.

The latest preliminary air arrivals to the end of September, released by the Department of Statistics and the Ministry of Tourism for New Providence showed a 8.2% decrease or 65,940 fewer foreign air arrivals than in 2008.

Despite the mixed results, October performance indicators demonstrate a second consecutive month of either marginal improvements or single digit declines. While this is a welcome change of course, any small improvements in occupancy and arrivals continue to be significantly offset by low ADR and RevPAR  as a result of a strong push by hotels to increase market share through value-added promotions.  This suggests that with a gradual global recovery as is now being widely predicted, hotels will continue to be challenged, needing to pay close attention to maintaining operational efficiency while aggressively marketing themselves and the destination to maximize revenue.