Capital backs Bahamas: ‘Get past’ 7.2m record

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CRAIG “TONY” GOMEZ

• Nation among Caribbean tops for tourism investment

• Baker Tilly chief asserts: ‘Financiers are on our side’

• Nation joint-top for banks; second among non-banks

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas was yesterday urged to quickly “get past” pre-COVID’s record 7.2m visitor arrivals after this nation ranked among the top Caribbean destinations which tourism investment capital is most bullish on.

Craig A. ‘Tony’ Gomez, the Baker Tilly Gomez managing partner, told Tribune Business that The Bahamas “certainly has the financiers on our side” after bank lenders ranked it joint-top among Caribbean nations they have most confidence in when it comes to tourism project lending.

The accounting firm’s Caribbean Hospitality Financing Survey 2022, released at the recent Caribbean Resort and Hotel Investment Summit, also revealed that The Bahamas ranked second in the region among so-called non-bank lenders when it came to their confidence in the tourism sector’s prospects and financing new resort and other developments.

Around 14 percent of such lenders, the likes of private equity funds and family offices, cited The Bahamas as the Caribbean location they were most bullish on. This nation ranked second only to Turks & Caicos, which was the front-runner by some way in attracting 33 percent of non-bank preferences, and was the only other country to make it into double digits.

As for conventional bank financiers, The Bahamas was one of seven Caribbean nations that each attracted 10 percent of the vote for the tourism investment destination they were most bullish on. “The Bahamas ranks very highly for financing for touristic, hospitality and leisure industry projects,” Mr Gomez told this newspaper of the survey results. “Financiers are pretty high on The Bahamas. We are second for non-banks on financing...

“I think it’s very favourable but, more so, it’s encouraging. There are some things we’ve still got to do. We’ve got to promote The Bahamas. We’ve got to break the visitor numbers we attained before COVID-19. I think that was 7.2m. We’ve got to get past that.

“We’ve got to make sure we get past those numbers as we need to grow our destination. We certainly have the financiers on our side. The prospects are good. We just have to see how attractive they are to local and international business persons.”

Lenders interviewed by Baker Tilly for its survey cited The Bahamas’ US proximity and one:one exchange rate peg with the US dollar as key factors in why they were so positive on this nation’s investment prospects. One said: “Bahamas and Turks & Caicos proximity to the US and US dollar currency.” Another added: “Anguilla, Turks & Caicos and The Bahamas - knowledge of the markets and growth prospects.”

The findings provide a sound platform for the central element in the Government’s post-COVID economic and fiscal revival plan, which is heavily focused on attracting greater levels of foreign direct investment (FDI) to stimulate activity, job creation, tax revenues and foreign exchange earnings.

Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA), told Tribune Business of the Baker Tilly findings: “Not having had sight of the report, it sounds like an excellent recommendation and of confidence in the destination of The Bahamas.”

The Bahamas attracted 7.2m total visitors in the last pre-pandemic year of 2019, some 1.8m of whom were higher-spending stopover visitors. However, Mr Gomez said that to turn investor/lender confidence into reality it still has to work on several issues within its control in an economic climate dominated by soaring inflation, surging global oil costs and post-COVID supply chain backlogs and bottlenecks.

With the threat from catastrophic storms also ever-present following the Atlantic hurricane season’s start, Baker Tilly’s Bahamian managing partner said controlling crime and ensuring visitors become repeat customers via world-class experiences during their vacations were critical for sustainable success.

And, with the COVID-19 pandemic starting to ease, Mr Gomez said it was vital that The Bahamas “reduce the paperwork” needed to enter and leave the country now that entry testing for vaccinated travellers and the Health Travel Visa have been eliminated.

Having encountered this as a frequent traveller himself, he acknowledged the deterrent effect it has for international travellers. “What we have to do as a country is come up with an automated way for travellers to fill out their travel card electronically while in the US, so that by the time they appear in The Bahamas their Immigration forms are completed online,” Mr Gomez said. “We build the data and take out the paperwork for persons to travel to The Bahamas.”

He added, though, that The Bahamas’ proximity to the market responsible for generating 90 percent of its visitors, the US, and location far from current war zones, potentially gave it a further competitive advantage at a time when travellers were still somewhat reluctant to undertake expensive long-haul travel due to the cost involved and potential safety concerns.

“People want to travel to safe destinations, and find the Caribbean attractive and The Bahamas even more so, because they are close to home,” Mr Gomez said. “Although these are inflationary times for bank and non-bank lenders, these entities still have an abundance of cash and are looking for opportunities to spend, and spend outside the stock market and stock exchanges. What is number one? Real estate.”

Despite concerns about the ease of doing business in The Bahamas locally, he added that the extensive legal, accounting and banking industries already present in this nation “open the door wide” for potential tourism industry lenders. And,l while COVID-19 restrictions had made travel difficult, most persons had learned to adapt.

“There’s a pent-up demand. Many travellers want to get out of home, and feel it’s time to go on the road. While inflation will take its toll, as it often does in times like this, all we see is a number of things are going to happen with pent-up demand and people wanting to leave now,” Mr Gomez said.

The Baker Tilly survey revealed that total confidence among Caribbean tourism lenders is at an all-time high. With optimism for 2022 hitting a new record for a survey that began in 2009, the report said: “Furthermore, 88 percent of our non-bank respondents intend to make new investments in Caribbean tourism projects over the next 12 months.

“Fifty percent say their deal flow and pipeline is stronger than before COVID. Eighty percent of banks have a deal pipeline that is at similar levels to before COVID or stronger than before COVID.”