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WEDNESDAY, JUNE 30, 2021
$5.00 Briland hotelier: ‘Will bubble pop?’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A PROMINENT Briland hotelier yesterday said tourism operators “don’t know whether a bubble is going to pop” with resorts continuing to enjoy “unheard of” bookings for the summer months. Benjamin Simmons, proprietor of The Other Side and Ocean View properties, told Tribune Business that the popular tourist destination was “jammed” with visitor activity as his boutique hotels currently remain on pace to produce an 85-90 percent occupancy rate for June. Describing such rates as “pretty much unheard of” pre-COVID-19, he added: “We’re above pre-COVID comparatives. We still don’t know whether a bubble is going to pop, or whether demand will be sustained based on people being at home for a year-and-ahalf, day dreaming about destinations and realising The Bahamas and the Out Islands are close. “Or is this a fundamental shift in tourism demand where we have a very large number of people looking for small destinations or low-density products? It’s a probably a mix of everything. We would definitely be in this above trend demand for this period.” Mr Simmons continued: “Most properties expect a drop-off in the summer months, but everybody in the island is saying that they’re jammed. We’re just full. We’re seeing it with dinner reservations. Getting a dinner reservation the week of your stay was almost unheard of. You could walk into a restaurant and find a spot no problem. “You cannot do that at present. You have to reserve your dining. Pretty much everybody on the island is saying they’re full. We’re very grateful, but we wait for the other show to drop.” Mr Simmons said the visitor booking window remains much-changed, with most visitors tending to confirm about two weeks out from their arrival, thus making long-term planning extremely difficult. While his Harbour Island property will again by running in the 90 percent occupancy range for July, he explained that this was largely due to a block booking from one family that had always spent three weeks of the month in Briland for the past 25 years. “For August the first two weeks look completely dead, but that has been the pattern and everyone is making short-term booking decisions,” Mr Simmons said. “Two weeks is about when people are committing to their decision to come. “August is traditionally when we get our European clientele, and that is still a bit uncertain because people are still anxious about whether the UK will open up despite British Airways’ return..... We’re just crossing our fingers and hoping we get to the end of the year without more lockdowns and that kind of stuff.” Dionisio D’Aguilar, minister of tourism and aviation, in a briefing on the proposed public-private partnerships for six Family Island airports earlier this week, described the Family Islands as the fastestgrowing and most resilient segment of the Bahamian tourism industry. He said: “Tourism has been impacted by the COVID-19 pandemic, but we are roaring back
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‘I want us in best COVID categories’
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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FULLY vaccinated Bahamas is the only way to fully revive tourism and achieve a Cabinet minister’s goal of “always being in the best category” for COVID-19 travel advisories. Dionisio D’Aguilar, minister of tourism and aviation, told Tribune Business the continued vaccination hesitancy among many Bahamians meant the country runs “an increased risk” of suffering “a spike” in COVID-19 infections that could cause major visitor source markets to warn against travel to the country. With COVID-19 travel warnings remaining a challenge for this nation, the
DIONISIO D’AGUILAR minister said he was especially concerned to keep The Bahamas’ ranking with the US Centres for Disease Control and Prevention (CDC) as high as possible given that this was the indicator believed
THE government has “rolled over and played” dead by permitting Hutchison Whampoa to dump all its loss-making assets on the Bahamian taxpayer, a prominent attorney argued yesterday. Carey Leonard, the former Grand Bahama Port Authority (GBPA) inhouse counsel, told Tribune Business that the extent of Grand Bahama International Airport’s operating losses over the past twoand-a-half years was further evidence that the Hong Kong-based conglomerate had retained its “jewels in the crown” while offloading liabilities it no longer wished to retain. Having sold the Grand Lucayan to the government for $65m in early September 2018, Hutchison Whampoa has now completed its second disposal
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• Taxpayer ‘saddled’ with Hutchison/Port ‘loss maker’ • Yet former owners retaining ‘jewels in the crown’ • Ex-GBPA attorney: Harbour ‘missed opportunity’
CAREY LEONARD by handing Freeport’s main aviation gateway over to the government via a deal structure that Mr Leonard described as “potentially fatal” to hopes of fulfilling the city’s potential as a transshipment, distribution and logistics hub. He reiterated his previous argument that the government should have purchased
Freeport Harbour Company, the airport’s parent, by compulsory acquisition if needed from 50/50 owners, Hutchison and the Grand Bahama Port Authority’s Port Group Ltd, along with the 741-acre Sea Air Business Centre (SABC). Without these two assets, Mr Leonard suggested that Dionisio D’Aguilar, minister of tourism and aviation, will struggle to fulfill his ambitions for transforming Grand Bahama International Airport into an aviation cargo hub and profit centre that stands in stark contrast to the $13.3m worth of operating losses incurred from 2019 onwards. Voicing surprise at the $200m price tag for the “comprehensive
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
redevelopment” of Grand Bahama International Airport, and suggesting that this might include the required investment to develop a cargo hub, he told this newspaper: “I’m sure that includes the cargo centre and everything like that. “Because the government has decided not to compulsorily acquire the harbour and the Sea Air Business Centre, you can forget that cargo thing. That’s the very reason I suggested the government buy Freeport Harbour Company. I wonder how much profit the Harbour Company had last year, even with the airport?”
and ending up on these lists like the CDCs” that advise against travel to The Bahamas. “By more and more people getting fully vaccinated, it reduces the possibility that you end up on these lists,” he reiterated. “There’s a lot of hesitancy out there, and a substantial amount of hesitancy increases the risk of cases spiking, and increases the possibility that we will end up on these lists, impacting tourism. There are travellers, mostly groups, that look at this sort of thing and make decisions based on it.
GB airport: Govt ‘rolled over and played dead’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
Nearly $50m loans fall into delinquency ALMOST $50m worth of loans became delinquent during May 2021 as COVID-19 payment deferrals continued to expire, the Central Bank of The Bahamas has revealed. The regulator, in its monthly economic assessment for May, disclosed that the $49.8m increase in nonperforming loans that were 90 days or more past due was offset somewhat by an $11.2m reduction in shortterm arrears. This is credit between 31-90 days past due, and this helped keep the net increase in troubled loans to $38.6m. “Banks’ credit quality indicators weakened in May, largely attributed to growth in non-performing loans (NPLs), amid continued unwinding of loan payment deferral schemes that were introduced as a result of the COVID- 19 pandemic. Specifically, total private sector arrears rose by $38.6m (five percent) to $818.6m, while the accompanying ratio firmed by 72 basis points to 14.72 percent,” the Central Bank said. “Contributing to this outturn, non-performing loans expanded by $49.8m (10.5 percent) to $526.4m, corresponding with a 91 basis points rise in the attendant ratio to 9.5 percent, with increases in the NPL rates for consumer loans by 1.5 percentage points to 8.3 percent; commercial loans by 1.2 percentage points to 5.7 percent; and for mortgages, by 0.3 percentage points to 11.6 percent. “In contrast, shortterm arrears contracted by $11.2m (3.7 percent) to $292.3m, while the associated ratio narrowed by 19 basis points to 5.3 percent.” Breaking this down, the Central Bank added: “An analysis by loan category revealed that the growth in arrears was led by commercial loan delinquencies, which expanded by $19.4m (32.1 percent) to $79.6m, as both the short and longterm segments rose by $9m (38.9 percent) and $10.4m (28 percent), respectively. “Similarly, mortgage arrears advanced by $12.6m (2.7 percent) to $477.3m, owing to an accumulation
• Minister: Vaccine hesitancy runs ‘increased risk’ • Tourism threat if leads to more travel warnings • But UK ‘amber’ status ‘not proving devastating’ to substantially influence where group/meeting planners send their clients. With The Bahamas last week failing to make the UK’s so-called “green list” of overseas travel destinations from where the latter’s citizens will not have to quarantine upon their return home, Mr D’Aguilar told this newspaper: “This is the whole reason ad nauseam why we’re trying to persuade as many Bahamians as possible to get vaccinated. “If you don’t get vaccinated, you run the risk of the number of positive COVID-19 cases increasing
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Central Bank signals reserves past danger By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Clearing Banks Association’s chairman yesterday said he is “not jumping through hoops just yet” despite the Central Bank’s actions signalling the post-COVID recovery is on “an upward trend”. Kenrick Brathwaite told Tribune Business that the regulator’s reimposition of the $5m “ceiling” limit on commercial banks’ open foreign exchange transactions indicated that the pandemic’s threat to the external reserves and one:one US dollar peg had subsided somewhat as tourism inflows start to pick-up. The relaxation, which was imposed as part of a fourstrong package to safeguard the external reserves in May 2020, forced commercial banks to supply larger quantities of foreign exchange from their own resources as opposed to relying on the Central Bank to replenish them, thereby reducing pressure on the very foundations of the fixed US dollar exchange rate peg. The “ceiling’s” return
• Reimposes $5m forex ‘ceiling’ after 14 months • Indicates better handle on currency flows as tourism opens • Clearing Banks chief: ‘Not jumping through hoops yet’
THE CENTRAL BANK OF THE BAHAMAS will likely be interpreted by many observers as a sign the Central Bank believes the worst of the external reserves pressures, due to tourism’s and the wider economy’s shutdown for much of 2020, has passed. “I met with the governor [John Rolle] and he basically indicated that to me,” Mr Brathwaite said. “He
thinks that the danger portion has already gone, and we’re almost out of the woods with regard to any possible deterioration of our foreign reserves, and that’s why he’s done that. He didn’t see that we were in that danger stretch and he would have to restrict these kinds of things. “We had a meeting with
him, the CBA, last week. The protection the Central Bank did for the foreign reserves, and suspension of the investment currency market for a while, those things did have a positive effect.” The external reserves stood at $2.38bn at end-May 2021, although they have been boosted by the proceeds of the Government’s foreign currency borrowing. Mr Brathwaite said that based on the meeting with the governor, the restrictions on investment currency market activities - and the buying of foreign real estate and securities by Bahamians and locallydomiciled vehicles - will be “next” to be relaxed by the Central Bank “in the not too distant future”. Mr Rolle had previously told this newspaper that the Central Bank will “be able to provide a clear signal” by the 2021 third
quarter on when it will ease restrictions preventing Bahamians from making up to $100m per year in overseas investments via this facility. Other measures imposed by the Central Bank, which combined saved an estimated $500m in external reserves, included a bar on dividend repatriations by the Canadian-owned commercial banks and the National Insurance Board (NIB) liquidating its overseas investment holdings. The dividend restriction has already been relaxed, and this week’s move means two of the four measures have now been lifted. Mr Brathwaite, meanwhile, who is also Bank of The Bahamas’ managing director, told Tribune Business that “the upswing and uptick looks very significant” when it came to the economy’s gathering postpandemic revival although it has yet to stem the level of banking industry loan arrears amid the wait for all tourism sector workers to be recalled.
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