By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Stopover tourism arrivals fell by 2.5 percent during March 2025, and finished down 3.3 percent for the year’s first quarter, amid headwinds from growing global economic uncertainty and a later Easter.

The Central Bank of The Bahamas, unveiling its monthly economic developments report for April 2025, said tourism industry numbers - albeit still healthy - expanded at a “tempered pace” during the 2025 first quarter due to the relative softness of stopover tourism ahead of the global economic shock created by Donald Trump’s early April tariff announcement.

March was also up against tough 2024 comparatives, as the same month last year was boosted by the peak Easter weekend holiday, which this year fell in April. However, US departures through Lynden Pindling International Airport (LPIA) - excluding Bahamians and resident travellers - fell by 2.6 percent to 500,000 for the year to-end April in a possible sign of the impact from economic uncertainty.

“Indications are that the domestic economy’s growth momentum through April slowed in comparison to the same period in the previous year, with economic indicators still normalising closer to their expected medium-term potential. Tourism output, while at healthy levels, grew at an estimated tempered pace as a result of the capacity constraints within the high value-added stopover segment,” the Central Bank said.

“However, the healthy expansion in the cruise segment was sustained. Official data from the Ministry of Tourism revealed that total arrivals grew by 7.1 percent to 1.2m visitors in March 2025, compared to 1.1m in the comparative 2024 period. Driving this outcome, sea arrivals increased by 9.2 percent to one million. However, air arrivals declined by 2.5 percent to 200,000.”

The notion that the decline in stopover arrivals, albeit mild, is a result of supply-side issues and a lack of sufficient hotel and vacation rental inventory to meet demand, has been challenged by some industry observers suggesting that the drop-off is due to the economic headwinds created by Mr Trump’s tariffs as well as greater competition from the lower-cost cruise sector.

The Central Bank, though, added of March: “Disaggregated by major port of entry, total visitors to New Providence advanced by 12.5 percent to 600,000 vis-à-vis the same period in 2024, as the 18.8 percent boost in sea passengers to 500,000 outweighed the 3.6 percent decrease in air traffic to 100,000.

“In the Family Islands, total arrivals increased by 4.1 percent to 600,000 relative to the previous year, with sea visitors higher by 4.6 percent at 500,000 in contrast to the 1.2 percent fall-off in air arrivals to 45,275. Conversely, total visitors to Grand Bahama reduced to 46,504 from 55,606 last year. Contributing, sea arrivals contracted by 20.2 percent to 38,895, outstripping the 11.2 percent gain in air passengers to 7,609.”

As for the 2025 first quarter as a whole, the Central Bank said: “On a year-to-date basis, total arrivals expanded by 9 percent to 3.3m visitors owing largely to an 11.4 percent rise in sea passengers to 2.8 million. However, air traffic fell by 3.3 percent to 500,000

“The most recent data provided by the Nassau Airport Development Company (NAD) showed that total departures - net of domestic passengers - increased by 2.5 percent to 200,000 in April compared to the same period of last year.

“Specifically, US departures [from LPIA] grew by 1.1 percent to 132,980. Likewise, non-US international departures advanced by 12 percent to 22,432. On a year-to-date basis, total outbound traffic declined by 2 percent to 600,000. Notably, US departures fell by 2.6 percent to 500,000, although non-US international departures rose by 1 percent to 100,000.”

Turning to vacation rentals, the Central Bank said: “In the short-term vacation rental market, data provided by AirDNA indicated that in April total room nights sold expanded by 23.2 percent to 78,193 relative to the comparative 2024 period. The average daily room rate (ADR) for entire place listings grew by 8.9 percent to $580.21 vis-à-vis the preceding year, and by 3.1 percent to $193.30 for hotel comparable listings.

“In addition, occupancy rates for entire place listings increased to 52 percent from 46.3 percent a year earlier. Similarly, hotel comparable listings firmed to 48.9 percent from 45.4 percent in the preceding year. On a year-to-date basis, total room night sales improved by 12 percent, and the average daily rates on entire place and hotel comparable listings by 8.2 percent and 4.2 percent, respectively.”

Looking further out, the Central Bank said: “Projections are that the pace of growth in the domestic economy will moderate in 2025, as the economy continues to approach its expected medium-term trajectory.

“Underpinning this outcome, the tourism sector is expected to continue to register tempered growth, owing to the moderate gains in the stopover tourism segment, although cruise activity is estimated to remain buoyant - albeit a less dominant weight in earnings estimates.

“In addition, further economic stimulation is expected from the construction sector, due to new and ongoing foreign investment projects, which mainly target onshore cruise attractions. Nevertheless, downside risks to the outlook have risen, attributed to higher tariffs on international trade, and uncertainties regarding the future direction of trade policies in the US and other major economies,” the Central Bank added.

“These uncertainties have the cumulative potential to hinder global economic growth and dampen tourism demand. Other exogenous risks to the outlook remain, linked to geopolitical tensions and elevated global oil prices.”