Monthly Economic and Financial Developments (MEFD) July 2020
Published: Monday August 31st, 2020
Domestic Economic Developments
Overview
Domestic economic developments for the month of July continued to be dominated by the Novel Coronavirus (COVID-19) pandemic. Tourism remained largely offline, adversely impacted by globally imposed travel restrictions, which resulted in the high value-added air segment and sea traffic grounding to a halt. However, the restart of foreign investment-led projects and post hurricane reconstruction work provided some stimulus to the construction sector. Meanwhile, both the decrease in foreign exchange purchases and the contracted volume of electronic payments transactions, underscored the significant reduction in domestic consumption expenditures during the review period. In the monetary sector, the growth in bank liquidity slowed, as the rise in domestic credit, mainly to the public sector, outweighed gains in the deposit base. Further, external reserves contracted during the review month, largely reflecting the falloff in foreign currency inflows from real sector activities.
Real Sector
Tourism
Tourism sector activity remained contracted during the month of June, as travel restrictions, related to the COVID-19 pandemic largely eliminated both air and sea arrivals.
As the border was partially re-opened to international travellers by private aviation and boat on June 15, preliminary data provided by the Ministry of Tourism (MOT) revealed that total foreign arrivals for the month of June reached 3,935, relative to the 18.8% increase to 641,410 a year earlier. Specifically, sea arrivals totaled 2,230, in contrast to the 22.9% expansion to 473,018 in June 2019. Similarly, air arrivals were just 1,705, in comparison to an 8.7% growth to 168,392 in the previous year.
A breakdown by major port of entry showed that total visitors to New Providence reduced to a mere 1,032, vis-à-vis a 20.5% increase to 333,519 in the preceding year, with sea and air visitors amounting to 549 and 483, respectively.
Similarly, total arrivals to the Family Islands declined to 2,359, relative to the 20.1% improvement to 239,952 last year, underpinned by air and sea arrivals falling to 1,148 and 1,211, respectively. Further, visitors to Grand Bahama decreased to 544, after a 7.4% gain to 67,939 in the prior year, as the sea and air visitors amounted to a muted 470 and 74, respectively.
During the first half of the year, total arrivals contracted by 56.1%, a turnaround from a 14.1% expansion recorded in the same period of 2019, reflecting reductions of 64.4% in air traffic, and 53.3% in sea passengers.
As the borders officially re-opened to commercial air traffic on July 1, the most recent data provided by the Nassau Airport Development Company Limited (NAD) showed that total international departures amounted to just 8,933 during the review month, in comparison to the 10.3% improvement, to 171,320 in the same period of 2019. On a year-to-date basis, aggregate departures contracted by 63.7%, a reversal from the 17.8% expansion during the corresponding period last year. Underlying this development, the U.S. segment reduced by 64.8%, overturning the 19.3% increase in the preceding year. Similarly, the non-U.S. segment decreased by 56.3%, vis-à-vis an 8.9% gain in 2019.
With regard to the vacation rental market, data provided by AirDNA for the month of July revealed a 54.2% decline in total room nights sold, vis-à-vis the same period last year, underpinned by contractions of 54.9% and 45.8% in bookings for entire place listings and hotel comparable listings, respectively. Pricing indicators varied, as the average daily room rate (ADR) for entire place listings firmed by 9.1% to $457.68, while the ADR for hotel comparable listings declined by 1.6% to $149.05. On a year-to-date basis, total room nights sold reduced by 41.8%, as bookings for entire place listings fell by 43.2%, while bookings for hotel comparable listings were lowered by 28.0%. Pricing indicators were mixed, as ADR for hotel comparable listings decreased by 1.6% to $154.95, while the ADR for entire place listings rose by 2.2% to $412.52.
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