Monthly Economic Financial Development (MEFD) October 2021
Published: Monday November 29th, 2021
Domestic Economic Developments
Overview
The domestic economy continued a gradual pace of recovery during the month of October, despite the ongoing spread of the Novel Coronavirus (COVID-19). Tourism output maintained its strengthening, undergirded by gains in the high value-added air segment and uptick in sea traffic, reflecting sustained progress in vaccination efforts, both locally and internationally. Monetary developments registered a decrease in bank liquidity, owing to an expansion in domestic credit, which contrasted with a reduction in the deposit base. Similarly, external reserves declined during the review month, largely attributed to seasonal net foreign currency outflows through the public sector.
Real Sector
Tourism
Tourism metrics indicated that the sector’s monthly output continued to gradually recover, although some challenges persisted, due to ongoing globally imposed travel restrictions related to the COVID-19. Further, support for the vacation rental market was provided by domestic demand.
The most recent data provided by the Ministry of Tourism (MOT) showed that total visitor arrivals, by first port of entry, strengthened to 158,660 in September, from 5,016 in the corresponding period of 2020. Leading this development, air arrivals rose to 43,348, from just 3,154 in the previous year—constituting 80.1% of the air passengers registered in 2019. In addition, sea traffic increased to 115,312, relative to a volume of 1,862 a year earlier. Disaggregated by major market, total arrivals to New Providence grew to 79,880 from a mere 1,128 in the preceding year. Contributing to this outturn, the air and sea segments measured 34,821 and 45,059, respectively. Further, total traffic to Grand Bahama advanced to 5,902, vis-à-vis just 231 a year earlier, as air and sea arrivals amounted to 1,151 and 4,751, respectively. Foreign arrivals to the Family Islands rebounded to 72,878, extending the volume of 3,657 in the prior year, owing to improvements in the air and sea segments, to 7,376 and 65,502, respectively.
On a year-to-date basis, total arrivals fell by 45.6%, decelerating from the 68.0% decline registered in 2020. Underlying this outturn, air arrivals recovered by 67.1%, a reversal from the 72.3% reduction in the previous year, as all major markets registered positive movements during the review period. However, sluggish performance persisted in the cruise segment, evidenced by a 76.3% decline in sea traffic, relative to 2020’s contraction of 66.6% (Table 1).
The most recent data provided by the Nassau Airport Development Company Limited (NAD) revealed that total departures—net of domestic passengers—rose to 58,857 in October, from a modest 4,794 in the corresponding month of 2020. In particular, U.S. departures recovered to 51,941 from 3,629 in the prior year, while non-U.S. departures increased to 6,916, from 1,165. On a year-to-date basis, outward bound traffic expanded by 50.6%, following a decline of 70.0% last year. Underpinning this outturn, U.S. departures grew by 67.2%, a turnaround from a 72.7% falloff in the previous year. In addition, the decline in non U.S. departures slowed to 44.3%, from 64.8% in the comparative period of 2020.
In the vacation rental market, the latest data from AirDNA revealed that improvements persisted in the short-term rental market. During October, total room nights sold more than doubled to 71,234 from 26,656 in the comparative 2020 period. Reflective of this outcome, occupancy rates moved higher for entire place listings and hotel comparable listings to 44.7% and 42.4% from 29.1% and 30.6%, respectively, a year earlier. As depicted in Graph 1, price indicators improved year-over-year, as the average daily room rate (ADR) increased for entire place listings and hotel comparable, by 25.4% and by 17.4%, to $462.78 and $168.65, respectively.
On a year-to-date basis, total room nights sold firmed by 50.3%, reflecting respective gains in bookings for entire place and hotel comparable listings, of 52.5% and 32.8%.
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