Monthly Economic and Financial Developments (MEFD) May 2022
Published: Monday July 4th, 2022
News
Domestic Economic Developments
Overview
Preliminary indications are that the domestic economy sustained its recovery trajectory during the month of May, given continued international adjustments to the Novel Coronavirus (COVID-19). Tourism output strengthened, supported by further rebound in the high value-added air segment and the seasonal recovery in sea traffic, as vaccination efforts progressed and the further relaxation of COVID-19 restrictions in some of the major source markets. On the fiscal front, Government’s budgetary operations for the first nine months of FY2021/22 revealed a significant narrowing in the deficit, as the growth in total revenue outpaced the rise in aggregate expenditure. Monetary developments for the month of May revealed an expansion in bank liquidity, as the acceleration in the deposit base, outpaced the rise in domestic credit. However, external reserves contracted, owing primarily to net foreign currency outflows through the public sector.
Real Sector
Tourism
Tourism metrics for the month of May, revealed that the sector’s output indicators continued to rebound, as major source markets further relaxed COVID-19 restrictions.
Official data provided by the Ministry of Tourism (MOT) showed that total visitor arrivals by first port of entry advanced to 586,574 in April, compared to 68,791 visitors in the comparative period of 2021. Leading this outturn, air traffic increased to 145,471, from just 60,305 in the prior year—restoring 85.0% of the volumes recorded in 2019. In addition, sea passengers grew to 441,103, from 8,486 visitors in the previous year, when voyages were suspended.
A breakdown by major port of entry revealed that, arrivals to New Providence recovered to 293,182 in April, from a modest 41,358 in the corresponding period of 2021. Contributing to this development, air traffic reached 109,880, while sea passengers totalled 183,302. Likewise, foreign arrivals to Grand Bahama amounted to 29,782 vis-à-vis 2,690 a year earlier, with the air and sea components comprising 4,459 and 25,323, respectively. Further, visitors to the Family Islands recovered to 263,610 from 24,743 in the prior year, as the air and sea segments rose to 31,132 and 232,478, respectively.
On a year-to-date basis, total arrivals rebounded to 1,933,351, compared to 184,685 in the corresponding 2021 period, when a decline of 89.1% was registered. Underlying this outturn, the air segment rose to 466,896 passengers, a reversal from a 53.1% contraction in the preceding year, reflecting a rise in traffic to all major markets. Similarly, sea arrivals increased to 1,466,455 visitors, following a decrease of 98.4% in 2021.
The most recent data provided by the Nassau Airport Development Company Limited (NAD) indicated that for the month of May, total departures—net of domestic passengers—rose to 112,493 from 55,662 in the same month of 2021. In particular, U.S. departures expanded to 94,467 from 54,362 in the prior year, while non-U.S. departures amounted to 18,026, vis-à-vis 1,300 in the previous year. On a year-to-date basis, total outbound traffic nearly tripled to 512,640, from 174,680 passengers in the preceding year, when a 53.0% contraction occurred. Supporting this outturn, U.S. departures recovered to 436,672 visitors, a reversal from the 46.3% falloff in 2021. Correspondingly, non-U.S. departures grew to 75,968, a shift from the 87.0% reduction in the corresponding period last year.
As it relates to the short-term vacation rental market, data provided by AirDNA mirrored these positive trends. In particular, during the month of May, total room nights sold advanced to 136,311, from 98,387 in the comparative 2021 period. Underlying this outturn, occupancy rates for both entire place and hotel comparable listings firmed to 54.7% and 51.7%, respectively, from 51.9% and 48.6% a year earlier. Further, as depicted in Graph 1, price indicators showed that year-over-year, the average daily room rate (ADR) for entire place appreciated by 5.6% to $518.75 and hotel comparable listings, by 8.6% to $192.69.
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