By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian tourism faces “critical challenges” to achieving its projected 4.5 percent annual growth rate over the next decade through 2034 due to multiple workforce and infrastructure-related impediments.

The Inter-American Development Bank (IDB), unveiling a $330,000 project where the cost will be split 50/50 between itself and the Government, disclosed that - while tourism’s contribution to Bahamian gross domestic product (GDP) is forecast to grow by more than $3bn or over 50 percent during the ten years to 2034 - there are numerous impediments to the sector and country realising this potential.

Climate change, cost competitiveness and changing visitor demographics and demand were just some of the hurdles identified by the IDB which, in conjunction with the Ministry of Tourism, Investments and Aviation, will study “inbound tourism” flows across The Bahamas’ major island destinations to help determine where infrastructure and workforce development resources need to be concentrated.

“Tourism is the cornerstone of The Bahamas’ economy, significantly contributing to GDP, employment and foreign exchange earnings,” an IDB paper seen by Tribune Business states. “In 2024, the sector’s total economic contribution is estimated at $6.1bn (43.8 percent of GDP), with projections rising to $9.2bn (60.8 percent of GDP) by 2034.

“The industry is also a major employer, with 131,300 tourism-related jobs expected by 2034, reinforcing its impact on economic stability and workforce development. With a compound annual growth rate (CAGR) of 4.5 percent from 2024 to 2034, the sector is set for steady expansion, driving higher visitor spending, economic contributions and industry growth.

“This sustained momentum will strengthen The Bahamas’ global competitiveness, solidifying its position as a premier travel destination. However, the sector faces critical challenges, including shifting visitor demand, infrastructure and workforce constraints, climate vulnerabilities and the need for enhanced competitiveness to ensure long-term sustainability.”

Acknowledging the Ministry of Tourism’s strategy to develop all 16 inhabited Bahamian islands as brands or destinations in their own right, each appealing to different market niches, the IDB paper added: “To address these challenges, the Bahamian government has designated 16 distinct island destinations, each with unique tourism assets, market compositions and development characteristics.

“This strategic approach aims to diversify the tourism product, attract high-value visitor segments and enhance The Bahamas’ resilience as a globally competitive destination. By leveraging the strengths of each island, the Government seeks to optimise infrastructure investments, elevate service standards and create sustainable economic linkages that drive long-term sectoral growth.”

The Bahamas’ recent growth, especially in the past two years, has been driven almost exclusively by lower-spending and yielding cruise passengers while stopover or land-based visitor numbers have remained stagnant. The Government has blamed this on a shortage of hotel room inventory, or capacity, and is seeking to double or increase this number by 15,000 - an effort that may take some time to achieve.

“The Northern Bahamas islands - comprising Grand Bahama, New Providence, Bimini, Berry Islands, Abaco, Eleuthera and Andros - are particularly strategic due to their economic significance, exposure to external shocks and untapped potential for sustainable growth. While these islands serve as key tourism hubs, they face infrastructure gaps, climate risks and destination management challenges,” the IDB paper said.

“Given their geographic and climate similarities, proximity to major markets and established infrastructure, the region presents an ideal setting for comparative tourism assessments. A comprehensive diagnostic is crucial to generate actionable insights that will drive evidence-based policy decisions, strategic planning and targeted interventions to enhance competitiveness, sustainability and resilience.

“The findings will directly inform infrastructure investments, workforce development, climate adaptation measures and tourism diversification strategies. These insights will contribute to the development of a sustainable tourism and climate-resilient strategy for the Northern Bahamas, supporting long-term, inclusive growth and enhanced resilience across the region.”

Besides studying “current and projected visitor demand, demographics, accessibility and expenditure patterns across key and emerging niche markets”, including visitor preferences, the IDB said the project will also focus on developing a sustainable tourism and climate resilience strategy.

“The general objective.... is to enhance the competitiveness, sustainability and resilience of tourism in The Bahamas by conducting a comprehensive diagnostic of inbound tourism across the Northern Bahamas and developing a strategic framework for sustainable tourism growth and climate resilience,” the IDB paper reiterated. 

“The specific objectives are to evaluate tourism competitiveness by analysing visitor demand, demographics, spending patterns, niche markets and accessibility to inform strategic planning, and develop a sustainable tourism and climate resilience strategy that integrates product development, infrastructure, cultural assets, workforce capacity and climate adaptation measures to enhance long-term sustainability.”