Monthly Economic and Financial Developments (MEFD) December 2021
Published: Monday January 31st, 2022
Domestic Economic Developments
Overview
The graudal pace of recovery in the domestic economy was sustained during the review month, despite the growing presence of the highly transmissable omicron strain of COVID-19. Tourism output further strengthened underpinned by seasonal gains in the high value-added air segment and the modest uptick in sea traffic, as vaccination efforts progressed in the major source markets. Monetary developments reflected a moderation in the growth in liquidity, though attibuted to an expansion in the deposit base, which outpaced the rise in domestic credit. However, external reserves decreased during the review month, owing primarily to seasonal net foreign currency outflows through the public sector.
Real Sector
Tourism
Preliminary evidence suggested that monthly tourism output indicators maintained their positive trajectory, despite ongoing globally imposed travel restrictions, related to the COVID-19 pandemic.
The most recent data provided by the Ministry of Tourism (MOT) showed that total visitor arrivals by first port of entry expanded to 383,706 in November, from 13,381 in the corresponding period of 2020. Leading this development, air arrivals rose to 90,228, from 11,272 in the previous year—constituting 85.8% of the air passengers registered in the comparative 2019 period. Further, as the cruise industry continued to revive, sea traffic recovered to 293,478 passengers, compared to a volume of just 2,109 in the prior year, when voyages were suspended. Disaggregated by major market, total arrivals to New Providence strengthened to 184,204 in November from a mere 5,684 in the corresponding period last year. Contributing to this outturn, the air and sea segments amounted to 68,826 and 115,378 passengers, respectively. Likewise, foreign arrivals to Grand Bahama increased to 11,396, from 900 a year earlier, as air and sea arrivals measured 2,039 and 9,357, respectively. Further, the Family Islands attracted 188,106 visitors in November, vis-à-vis 6,797 in the prior year, owing to improvements in the air and sea segments to 19,363 and 168,743 arrivals, respectively.
On a year-to-date basis, total arrivals still fell by 9.7%, but was notably lower than the 73.1% decline registered in the same 11 months of 2020. Leading this outturn, air arrivals grew by 97.8%, a reversal from the 74.5% falloff recorded in the previous year, as all major markets registered gains during the review period. However, the cruise segment accumulated a 40.1% decline in sea traffic—due to a later onset of resumed business than for onshore resorts. This was still moderated from the 72.6% contraction in 2020.
The most recent data provided by the Nassau Airport Development Company Limited (NAD) revealed that total departures—net of domestic passengers—rose to 98,305 in December, from 21,040 in the corresponding month of 2020. In particular, U.S. departures increased to 83,115 from 16,009 in the prior year, while non-U.S. departures advanced to 15,190 from 5,031 a year earlier. On a year-to-date basis, total outward bound traffic moved higher by 80.0%, following a decline of 74.2% in 2020. Underlying this outcome, U.S. departures grew by 99.2%, after a 75.2% falloff in the previous year. Further, the decline in non-U.S. departures slowed to 13.7% from 64.4% in the previous year.
Positive trends were also mirrored in the vacation rental market, as the demand for short-term rentals accelerated. The latest data from AirDNA revealed that, in December total room nights sold rose more than two-fold to 124,096, from 50,692 in the comparative 2020 period. Reflective of this outcome, both entire place and hotel comparable listings increased to 52.4% and 49.3%, respectively, from 31.9% and 31.0% in the corresponding period last year. As depicted in Graph 1, price indicators strengthened year-over-year, as the average daily rate (ADR) for hotel comparable listings firmed by 11.6% to $181.14 and for entire place listings, by 7.2% to $508.33.
On a year-to-date basis, vacation rental room nights sold grew by 62.8%, occasioned by respective gains in bookings for entire place and hotel comparable listings, by 64.8% and by 47.4%. Further, ADR for hotel comparable and entire place listings increased by 12.8% and by 16.2%, respectively.
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